And has the big slump in Australia’s terms of trade steadied?
The Reserve Bank’s Commodity Price Index for July suggests that could be the case.
After sharp falls for most of this year, the index, in Australian dollar terms steadied last month.
That was after a big fall in May and June.
The RBA said that in Australian dollar terms, "the index is estimated to have been broadly unchanged in July, following a decrease of 3.8 per cent (revised) in June."
That revised June fall was a sharp improvement on the 4.9% original estimated.
The bank said that during the month the prices of wheat and coal fell, while the prices of aluminium, beef and veal and the estimated price of iron ore rose (as it did to $US100 a tonne by some indicator prices).
The bank again pointed out that ”as indicated in previous releases, preliminary estimates for iron ore, coking coal and thermal coal export prices are being used for recent months, based on market information."
These are firmed up each month as more information comes to hand.
The iron ore price is being complicated by the continuing negotiating impasse between Chinese steel mills and producers like Rio Tinto and BHP Billiton.
It’s only preliminary estimates for July, but the way the revisions have been going in the past few months, the next monthly report could reveal a small rise in the index, would be the first time in around 9 months.
The rising value of the Australian dollar however could trim some of the gains coming from price rises like copper (which hit a 10 month high on Monday night, our time) and the higher prices for iron ore and oil and LNG.
