Figures out this week flesh out the dramatic impact of the floods and cyclones on Australia’s minerals sector in the three months to March.
The slump in production and exports blew a hole in the economy in the March quarter, helping to produce a 1.2% fall in growth.
Many commentators and journalists insist this was a 1.2% drop in the economy, but as Reserve Bank Governor Glenn Stevens said in Brisbane this week, the fall was due to a "supply" problem, not a problem with demand.
"Falls in coal and iron ore production more than fully explained the decline in measured economic output in the March quarter, which occurred not because demand slumped but because the economy’s capacity to supply output was temporarily curtailed," Mr Stevens said.
The country’s main resources forecaster, the Australian Bureau of Agricultural and Resource Economics and Science (ABARES), has detailed the extent of the supply slump in its March quarter Mineral Statistics publication.
ABARES said that the drop in production was large enough to turn a 9% rise in export prices in the quarter into a 10% fall in export earnings to $40.3 billion, as the graph below shows.
The data makes it clear that while attention has focused on coal and iron ore, a majority of mineral resources saw falls in export volumes in the quarter.
And production of mineral commodities decreased during the quarter, with around 70% of commodities recording decreases in production.
ABARES said, "Export unit returns for energy commodities increased by 8 per cent, reflecting higher prices for crude oil and higher export unit values for thermal and metallurgical coal.
"The index of metals and other minerals prices increased by 10 per cent, as a result of increases in the US dollar price of a range of base metals, gold and iron ore.
"However, compared with the March quarter 2010, the index of export unit returns was 32 per cent higher, as prices for energy minerals increased by 26 per cent and prices for metals and other minerals increased by 37 per cent.
"Higher export unit prices primarily reflected significant increases in the contract prices for bulk commodities compared with the March quarter 2010," the Bureau said.
During the quarter, the Australian dollar appreciated by 1.9%, which had a limited effect on export earnings.
The Bureau said there was a long line of commodities recording declines in export earnings in the March quarter 2011 from the previous quarter.
They included "refined silver, down $19 million (31 per cent) to $43 million; metallurgical coal, down $2.2 billion (29 per cent) to $5.4 billion; iron and steel, down $107 million (27 per cent) to $292 million; uranium oxide (U3O8), down $67 million (26 per cent) to $187 million; petroleum refinery products, down $24 million (23 per cent) to $80 million; lead, down $110 million (19 per cent) to $477 million; copper, down $335 million (15 per cent) to $1.9 billion; diamonds, down $15 million (14 per cent) to $93 million; thermal coal, down $462 million (13 per cent) to $3.0 billion; manganese ore and concentrate, down $56 million (13 per cent) to $384 million; and crude oil and other refinery feedstock, down $364 million (12 per cent) to $2.6 billion".
That’s a long list.
The Bureau said lower export values for uranium oxide and manganese ore and concentrate reflect both lower export volumes and export unit values.
"Export values for metallurgical coal, petroleum refinery products, iron and steel, thermal coal and crude oil and other refinery products declined during the quarter because of lower export volumes, which were only partly offset by increases in export unit values.
"Export values for refined silver declined as higher export unit values were more than offset by decreases in export volumes. Export values for lead and copper declined primarily as a result of lower export volumes," according to the Bureau.
ABARES said commodities recording significant increases in export earnings in the March quarter 2011 compared with the December quarter 2010 included "bauxite, up $15 million (34 per cent) to $59 million; nickel, up $162 million (18 per cent) to $1.1 billion; zinc, up $32 million (6 per cent) to $574 million; and aluminium (ingot metal), up $28 million (3 per cent) to $1.1 billion".
The export values for zinc and aluminium increased as higher export unit values more than compensated for lower export volumes.
"Higher export values for bauxite and nickel reflect increases in export volumes and export unit values," the Bureau said.
The Bureau’s figures showed that production of mineral and energy commodities declined in the March quarter 2011 compared with the December quarter 2010, with around 70% of commodities recording decreases in the quarter.
These included significant production declines for "nickel intermediate 35%, mined lead 35%, diamonds 27%, uranium oxide 24%, saleable black coal 22%, crude oil and condensate 17%, mined zinc 14%, refined gold 13%, mined nickel 13%, and iron ore and concentrate 10%.
"Nickel intermediate production decreased as a result of lower production at BHP Billiton’s Kalgoorlie refinery.
"Mined lead production decreased in the March quarter 2011 from the previous quarter, reflecting production losses from heavy rain in Queensland.
"Lower production of
