AUSTRALIA DATA
The merchandise trade data is nominal and so are impacted by moves in commodity prices which have fallen for at least 4 of the last 6 months for key commodity exports, which is also likely to weigh on government revenues. Iron ore unit values were higher in May supporting overall export growth of 2.8% m/m but coal and LNG prices fell. It also helped boost exports to China, which had been soft.
- Exports to China returned to positive territory rising 0.3% y/y in May up from -5.1% due to iron ore. Shipments to Korea were also robust rising 18.8% y/y driven by coal. But they remain weak to Japan -23.6% y/y and India -4.5% y/y and turned negative to the US at -12% y/y. But with China accounting for 36% of 2023 Australian exports and the US only 3.7%, the former is significantly more important.
Export values by country y/y%
Source: MNI - Market News/ABS
- Volumes of key commodity exports rose in May but only iron ore and thermal coal prices increased. Iron ore volumes rose in double digits on the month after falling in April boosted by shipments to China and Japan. While prices have been down in 4 of the last 6 months, volume growth tends to be followed by a decline.
- Coal was more mixed with volumes of semi-soft and thermal coal rising helped by Korea, but hard coking falling. Again a positive tends to be followed by a negative the next month. Prices were lower for hard and semi-soft but rose for thermal, which had seen declines in 5 of the last 6 months.
- LNG shipments continue to face headwinds from lower global prices. May volumes rose 1.3% m/m and there have only been two declines in the last 6 months, but unit values fell 3.2%, the fourth straight drop.
Commodity export values y/y%
Source: MNI - Market News/ABS
310 words