Record iron ore receipts lift Australian surplus

The record value of iron ore exports in March pushed Australia's goods trade surplus above A$8bn and more than offset the fall in the value of its coal exports from a year earlier with China's ban on Australian coal.

The value of Australian iron ore exports rose to a record A$14bn ($10.84bn) in March from A$11.38bn in February and from A$9.07bn a year earlier on higher volumes and prices. This trend is likely to continue into April as prices hit new highs yesterday and exports start to increase ahead of the end of the Australian fiscal year on 30 June and after the wet season in northern Western Australia.

The value of Australian iron ore exports were A$28.23bn higher during July-March compared with the same period a year earlier, more than offsetting the A$14.73bn fall in coal receipts over the same comparison, according to the Australian Bureau of Statistics (ABS). Australian coal receipts have been capped by Beijing's implementation of a ban on imports of Australian coal, forcing China to rely on other sources of coking coal, much of which is lower grade and requires more iron ore to produce steel.

The coal import ban is part of Beijing's plan to put pressure on Canberra to ease investment restrictions and to stop commenting on its policies on Hong Kong and minority peoples.

Iron ore was the only major mineral export category to increase in value over the fiscal year to date, with crude, oil products, LNG and non-ferrous metals all dropping during July-March compared with a year earlier. There are some signs of a recovery, with the value of Australia's LNG exports increasing in March compared when February, even when adjusting for the longer month.

The value of crude and product exports continued to drop with ageing fields in decline, but the value of petroleum imports increased by 21pc from the previous month and a year earlier to A$2.61bn as the closure of refineries lift product imports.

China still accounted for 37pc of Australia's total merchandise exports in March or A$13.42bn, which was up by 17pc from February's export receipts from China. The importance of China as a destination for Australia's exports is underlined when compared with the second-largest destination of Japan. It accounted for 11pc of Australia's goods exports or A$4.21bn in March, up from A$3.36bn in February.

By Jo Clarke