MNI DATA PREVIEW: Iron Ore to Underpin Australia Trade Data

By Lachlan Colquhoun

     SYDNEY (MNI) - The latest Australian Trade Balance data will be published

Tuesday. Here are five factors of interest to look for in tomorrow's release by

the Australian Bureau of Statistics.

Will the export boom continue?. 

February's trade balance vaulted to a record A$4.8 billion on the back of strong

iron ore exports, and represented a 10% increase y/y. That surprise result came

after a surplus of A$4.5 billion in January. The previous highest balance was

the A$4.7 billion surplus posted in December 2016. The market is expecting

another strong number tomorrow, but no new record.

Iron Ore continues to shine. 

The February export result was dominated by a A$958 million increase in exports

of metal ores and minerals, a category dominated by iron ore. Prices continue to

be high due to ongoing disruption from the Brazilian mine disaster in January,

and robust steel demand in China.

China's coal problem. 

The surge for iron ore In February was offset by a A$760 million drop in coal

exports, as processing delays at Chinese ports continued to drag. This issue

continues to linger, and Chinese buyers of thermal coal are reportedly switching

to other suppliers, which continue to deliver low export numbers for Australian

coal.

Thankyou to the $A. 

The Australian dollar continues to hover around US70 cents and has recently

fallen briefly through that barrier. An interest rate cut from the Reserve Bank

of Australia, which could come as early as tomorrow, would put more pressure on

the $A. The rate cut would be an admission that the economy needs stimulus, but

it would be good for exports.

Imports steady. 

The trade balance is being driven by an export boom, and not by any major slide

in exports. February imports were only 1% lower at A$35 billion.

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

[TOPICS: MALDS$,M$A$$$,M$L$$$]