Clever Trevor
Good news for the Top End, as it looks as though the very threatening Cyclone Trevor is set to be downgraded to a tropical low for the Northern Territory.
There was no such luck over at Port Hedland, though, where the severe Cyclone Veronica has already led to the shutdown of the iron ore exporting ports of Port Hedland, Ashburton, and Dampier, with all anchorages and harbours cleared.
Expected to move along midway between Karratha and Port Hedland on Sunday, authorities have warned that the Cyclone poses "the biggest risk to the region in a decade" (ABC News).
The ports shutdown was announced a couple of days ago on March 22, so the end of the first quarter of calendar year 2019 will see some negative impacts on iron ore cargo tonnages shipped...and therefore on GDP growth.
Iron ore has delivered a thunderous boom to the budget bottom line this year, but this enormous windfall has largely been driven by price rather than volumes, and all the more so since the closure of the Vale mine in Brazil after a truly terrifying tailings dam disaster over there.
And since it's volumes that feed into GDP, iron ore exports may now struggle to add anything to GDP in the first quarter of 2019.
This is in spite a record February tonnage exported in 2019 (partly driven by Cape Lambert and the Port of Dampier) as the Vale closure fed through.
In total, a sum of ~67Mt of iron ore exports were reported for February.
The partials suggest that GDP growth for the March quarter will likely be pretty soft anyway, but this Cyclone disruption will just shave a bit more off.
The Reserve Bank will already need to revise down its growth forecasts, which is adding further pressure to cut interest rates.
