As expected the trade surplus has plunged as a result of the impact of Cyclone Debbie on coal exports from Queensland in April, underlining the warning that second quarter GDP growth will take a whack from weak exports volumes.
Exports fell 8% thanks to the impact of Cyclone Debbie, compared with the 2% gain reported for March.
Data from the Australian Bureau of Statistics yesterday revealed that the trade surplus fell to the lowest point in six months to $555 million (seasonally adjusted), a massive of $2,614 million fall on the surplus in March 2017 of $3.169 billion (up from the originally reported $3.107 bullion).
The February trade surplus was again revised up to an all time record of $3.737 billion from last month’s estimate of $3.657 billion and the originally reported $3.574 billion.
The decline was largely due to a reduction in exports, with imports off 1% against the 2% fall in March.
The ABS data shows the fall April was driven in large part by the drop coal, coke and briquettes exports, fell 45% in seasonally adjusted terms, or $2.521 billion.
Spot iron ore was flat at $US55.36 a tonne overnight Thursday, the lowest level since July last year. The spot price touched $US94.86 in February but has lost 30% since.
After diving 60% in March, coal shipments from Queensland’s three main coal ports jumped 130% last month as shippers caught up on the backlog. in May.
The April disruptions were concentrated in higher value hard coking coal with a 65% plunge in volumes (Queensland is the major producer of this commodity) against a far more modest 5% dip in volumes of thermal coal.
It comes as Port Hedland iron ore shipments continue to gain momentum, rising 4% in May from April, and 12% over the year to 44.1 million tonnes.
But exports to China did even better – they were up 9% from April to 38.002 million tonnes (and 21% from March) and nearly 20% from May, 2016’s 31.660 million tonnes.
Iron ore prices fell sharply in May – down almost 20% for some grades so it looks as though Chinese steel mills took advantage of the big fall to load up on extra supplies.
In fact exports to China in April and May jumped 12.6% from January and February this year and heading to top the 100 million tonne mark for the quarter ending June 30.
That won’t completely offset the lower coal tonnages (will May see a big fall as well in coal exports?), but it will more than help. Total iron ore exports are up a similar amount as well.
