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Friday, 8 June 2018

Trade surpluses keep rolling in

Tricks of the trade

The international trade balance came in at a preliminary surplus of $977 million in April 2018, making it 11 surpluses out of the past 12 months (the month of December being an anomalous deficit thanks to Cyclone Debbie's unwelcome disruption). 

The monthly result was down by $754 million from an upwardly revised $1.73 billion in March.

But you get these up and downs. 

And anyway, in spite of the weather-related blip the cumulative trade surplus over the past 18 months has been a thumping $22½ billion, so there's not exactly too much wrong with that. 


The resources boom, then, is beginning to bear fruit as the export phase ramps up.

Iron ore export values have remained solid, while in June coal prices are now being driven to multi-year highs in Asia, due to simultaneously strong demand from China, India, Japan, and South Korea. 

So there's a further windfall in the post for Australian mining revenues and royalties. 

Meanwhile services exports are running pretty hot too. 

Underpinning all of the above, gas exports are breaking records by the month, approaching $3 billion for the month of April alone as Gladstone LNG fires up.

There's plenty more where this came from, too, with Santos announcing a total of nearly $1½ billion dollars of further investment in Queensland LNG.


Despite a moderate 2.2 per cent monthly decline, exports were 11.3 per cent higher than a year earlier, with annual exports to China nudging back above $100 billion.

Thus a heady combination of bulk commodities, gold, and services exports have driven record high annual revenues over the past year. 


At the state level, Western Australia's trade balance has stabilised, and Queensland will now enjoy the LNG boost and a period of resurgent coal prices. 


Finally, inbound tourism services is zooming along with phenomenal strength - largely due to Chinese tourism - with credits notching another all-time high in April. 


Overall, while the domestic economy has been spluttering along a bit at times, there's plenty to cheer in terms of international trade right now.