Surplus hiding in plain sight
I wrote here many times last year about why the numbers showed that a trade surplus was in the post, thanks to a combination of the indicative higher prices negotiated on Newcastle coal contracts and a softer dollar.
As usual, the gloomers said it couldn't happen, but in fact within a few short weeks, here we are.
Not only was the previous month's initial estimated deficit revised down from $1.5 billion to $1.1 billion, in November the balance swung massively back into surplus to the tune of $1.243 billion.
Exports increased by 8.4 per cent in November, with more substantial gains likely to come in the months ahead according the Reserve Bank's Index of Commodity Prices.
In fact, there will be some massive increases to the coking coal prices used by the ABS over the next few reports.
Notably, this was the first surplus for Australia's international trade in 32 months.
This will be a significant boost to nominal GDP in the fourth quarter, and the narrowing current account deficit will in turn help to ease the pressure on Australia's AAA-rating.
Here comes LNG
Although gold export values declined in the month, there were substantial gains for iron ore (+$545 million) and coal (+$851 million) export values, with iron ore export volumes shipped from the Port of Port Hedland going on to record a record high 43.94 million tonnes of ore in December too.
What few people seemed to notice was that LNG exports also racked up a record $1.9 billion of exports in the month, with the oil price rebounding just in time for exports from Gladstone in Queensland to ramp up.
Furthermore, there were significant gains in rural goods exports in November.
Australia's LNG exports are forecast by Treasury to triple between 2015 and 2021, which will deliver a significant boost to both real and nominal GDP.
Meanwhile the services sector continues to worm its way back, driven by a record number of tourist visitors to Australia in 2016.
Trade balances improve in resources states
Monthly exports to China notched up their best month since the first quarter of 2014.
Exports of LNG from the Port of Gladstone continued to ramp up to 1.64 million tonnes in November from 1.42 million in October, with most of that gas heading to China, Korea, Japan, and Singapore.
With coal prices soaring too, Queensland saw its merchandise export values explode by more than $1 billion to hit their highest level since all the way back in 2008, at the peak of previous coal price bubble.
These figures will feed their way through into the annual totals in due course.
This was also another better month for Western Australia, while Queensland recorded its strongest surplus in merchandise trade since way back in June 2010.
Of course, New South Wales and Victoria account for most of Australia's services exports.
Amazing news to kick off 2017, following on from hugely positive readings for both services and manufacturing PMI, with plenty more from where this came from in the next few months too.