MNI ANALYSIS: Australia Q2 Trade Likely To Solidly Add to GDP

--June Trade Surplus Biggest Since May 2017

--LNG Exports Shine in June

By Sophia Rodrigues

     SYDNEY (MNI) - Australia's trade balance recorded the biggest surplus since

May last year as exports rose 3% on-month and imports fell 1%, thus pointing to

solid contribution from net exports to Q2 GDP.

     Data published by the Australian Bureau of Statistics Thursday showed the

trade balance recorded a surplus of A$1.87 billion in June, more than twice MNI

median forecast for a surplus of A$800 million. The surplus was the biggest

since A$2.17 surplus in May last year.

     The outcome followed a small downward revision to May surplus but also a

small upward revision in April surplus. Taking revisions in to account, the

total surplus in Q2 was A$3.19 billion, very close to A$3.36 billion in Q1. 

     In June, exports rose 3% m/m due to 2%, or A$542 million, rise in non-rural

goods. Metal ores and minerals export rose 1%, other manufactures rose 6% and

other non-rural goods rose 15%. Rural goods exports rose 5% or A$181 million.

     Imports fell 1% m/m mainly due to a 4%, or A$400 million, drop in

intermediate goods and a 15%, or A$112 million, decline in non-monetary gold,

partly offset by a 5%, or A$313 million, rise in capital goods import.

     In original terms, exports rose for five of the six key commodities, with

LNG an outperformer in June. LNG exports rose 14% or A$414 million as quantities

rose 15% but unit values fell 1%.

     Thermal coal exports also performed well, rising A$226 million or 12%,

owing to a 12% rise in quantities.

     Iron ore fines, on the other hand, fell 3% or A$117 million because of a 2%

decline in quantities.

     Below is table on international trade data for June:

                                         June                              May

------------------------------------------------------------------------------

                                      (in A$)                          (in A$)

                          Seasonally Adjusted              Seasonally Adjusted

Trade Balance                       +1.87 bln  +725 mln(revised from +827 mln)

MNI Median     +800 mln (Range +175 to +1300)

Exports                             36.44 bln                        35.53 bln

Imports                                 34.57                        34.80 bln

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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