MNI DATA IMPACT: Australia Trade Surplus At Record High

By Lachlan Colquhoun

     SYDNEY (MNI) - Australia's trade balance rose to a seasonally adjusted

A$5.74 billion in May, an all-time high and a 19% increase on April. The trade

balance broke through the A$5 billion barrier in February and then receded

before surging again in May. The outcome beat forecasts, which pointed to a

surplus of around A$5.25 billion.

     Here are other key points from the release by the Australian Bureau of

Statistics.

Iron Ore shining bright 

Exports of iron ore were the single most important reason for the increase, up

by 13% to A$11 billion for the month, with exports to China increasing by A$1

billion.

China dependent 

In addition to booming sales of iron ore, exports to China of hard coking coal

used in steel production rose by 58% for the month. China accounted for more

than 25% of Australia's two-way trade in 2018, with Japan second at 10%. Few

nations have more to fear from an economic slowdown in China than Australia.

Two types of coal 

While exports of high quality coking coal increased, exports of thermal coal for

use in power generation fell by A$29 million. Higher exports to South Korea were

not enough to account for a sharp drop in exports to Japan.

Imports also higher 

The record trade balance came despite a 1% increase in imports, to A$35.8

billion in May. Increased imports of civil aircraft and plant and machinery

drove imports higher.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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