AUSTRALIA DATA: Sharp Rise In Exports To US But Weak To Asia

Australia’s merchandise exports to the US rose to a record high in January to be up 257% y/y. It suggests that producers sent shipments to avoid any tariffs on Australian goods. At this stage they will only be impacted by those on aluminium, steel and copper due at the start of April. Exports to the US accounted for 4.6% of Australia’s total in 2024 and 0.9% of GDP, which is smaller than many other countries. Australia is more vulnerable to US trade policy indirectly through its exposure to China which accounted for 34.6% of exports.

• Exports to Asia were weak in January falling 19.7% y/y to China, 9.6% to both Japan and Korea and were also negative to India, Taiwan, Singapore, Indonesia and Malaysia. This is not good news as they are some of Australia’s largest export destinations.
• Along with the US, shipments to NZ and Germany rose on the year.
• Export volumes of key commodities were generally lower in January, while prices were higher for iron ore and coal. There were sharp declines in the quantity of iron ore shipped to China and Japan. This trend to China may continue as it wants to reduce its overproduction of steel.
• Coal export volumes were down on the month to China, Taiwan and Japan but also India and the Netherlands.
• LNG exporters had a difficult month with unit values down 3.7% and quantities shipped -5.3%. Asia has had a mild winter reducing its gas demand for heating.

Australia merchandise exports y/y%