MNI DATA PREVIEW: Australia Trade Data May Get Iron Ore Boost

By Lachlan Colquhoun

     SYDNEY (MNI) - The Australian Bureau of Statistics will publish Trade

Balance data for February on Wednesday April 3. Here are five factors to look

for in the release .

     Can the export boom continue? 

     The January result was a surprise surplus of A$4.5 billion, the second

largest result on record after the A$4.7 billion posted in December 2016. The

market is not expecting the surplus to rise tomorrow, but is prepared to be

surprised particularly given the strength of iron ore prices.

     Gold glittering. 

     The value of gold exports was the standout feature in January, almost

tripling to reach A$2.2 billion and comprising more than 50% of the export

increase.

     China problem.

     While the overall value of metal ores and coal exports went up, mineral

exports to China fell sharply in January. Iron ore exports to China fell 20% and

coking coal was down 12%. The coal sector in particular is expected to suffer

from falling Chinese demand, and this could flow through to tomorrow's result.

     Iron ore surge. 

     Supply issues to China are, conversely, playing into a spike in iron ore

prices, with some lower grades at five year highs, while higher grades are back

at multi year peaks hit in February. With Brazilian production still disrupted,

producers in Western Australia are continuing to benefit.

     Imports rose, despite everything. 

     The weaker Australian dollar did not impact on imports in January, which

increased by A$1.1 billion. Expenditure on capital equipment is encouraging, but

with retail sales and consumer sentiment weak imports in some categories may

begin to fall off.

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

[TOPICS: MAUPR$,M$A$$$,M$L$$$,M$U$$$]