Iron ore drives 29 percent trade surplus surge

5-Nov-2018

Australia’s trade surplus surged 29 per cent to $3.017 billion in September, helped by rising export prices for iron ore, minerals and fuel.

The balance on goods and services increased $675 million up from August’s revised $2.34 billion, according to seasonally adjusted data released on Thursday by the Australian Bureau of Statistics.

Analysts, working on the basis of a $1.6 billion August surplus initially recorded by the ABS, had expected a slight rise to $1.7 billion.

The Australian dollar spiked on the release of the data, rising from US70.90¢ to US71.12¢ at 9.20am.

Westpac senior economist Andrew Hanlan said a one per cent drop in imports was the surprising factor.

“We had expected imports to rise modestly on higher prices associated with the lower Australian dollar,” he said in a note.

“We assess that the improved trade position was due almost entirely to a lift in the terms of trade, up by a little more than one per cent, we estimate, on higher commodity prices.”

Total goods and services exports for September were up $283 million, or one per cent, to $37.496 billion

Good commodity prices helped metal ores and minerals contribute an extra $551 million, or 7 per cent, for the month, while fuel exports rose by 6 per cent, or $270 million.

Sheepskin and wool exports rose by 12 per cent to $428 million, helping to push rural exports up $33 million to $4.211 billion

However, total coal exports dropped 3 per cent, or $141 million, while LNG exports were down 2 per cent or $85 million.

There was also a $525 million, or 26 per cent, trend decline in exports of non-monetary gold.

Travel service exports added an extra $96 million for September, up one per cent to $5.376 billion

Meanwhile, total import costs dropped $392 million, or one per cent, to $34.479 billion, with declines in machinery, industrial and farm supply imports.

Import costs rose for iron and steel, fuel and lubricants, plastics, and processed industrial supplies, as well as food and beverages, electrical items, clothing and footwear, and toys, books and leisure goods.

Freight service costs also jumped.

Source: THE WEST AUSTRALIAN