Australia recorded its second-largest trade surplus in history in January thanks to surging prices of copper, gold exports plus solid prices for LNG, iron ore and resilient prices for some types of coal, plus alumina.
The surplus jumped to $4.56 billion, up $780 million from December.
Non-monetary gold exports rose $1.373 billion after being low for the closing months of 2018.
January’s total was the highest since more than $4.7 billion in December 2016, and because the figures are based on provisional pricing for commodities such as iron ore and coal (which are partially set by indexes), December’s figure could easily rise and top the $5 billion mark.
Iron ore prices jumped after the January 25 mine dam disaster in Brazil at a mine owned by vale, the big iron ore miner and exporter. While prices eased a little in February to remain flat over the 28 days, they have not fallen so far in March.
Exports rose to nearly $40 billion in the month – the first estimate was $39.937 billion – a rise of 5%. Imports rose 3.1% to $35.388 billion.
Economists say export volumes (which are important to the way GDP is worked out) fell by around 3% in January which will see another negative contribution to growth for this quarter if it continues into this month.
But it will help to boost nominal GDP, corporate earnings and taxation revenues. Remember nominal GDP rose to 5.5% in the December quarter, from 5.1% in the three months to December and a Myefo estimate of 4.7% for the June 30 financial year.
The Reserve Bank’s commodity price index rose to levels last seen in early 2011 in February, a sign the boomlet continues. Our terms of trade rose 3.1% in the final quarter of last year after a 0.8% rise in the September quarter.
