Iron ore price drop slows national trade surplus

Australia has recorded a drop in its monthly trade surplus to $5.9 billion, a figure which is attributed to the fall in iron ore prices throughout August.

The seasonally adjusted figure of just under $6 billion is down from the $7.2 billion surplus recorded in July, according to figures released by the Australian Bureau of Statistics.

It comes as export numbers fell $1.4 billion, representing a 3 per cent drop and imports fell just $137 million throughout the period.

Despite iron ore volumes increasing 15 per cent, its value dropped 12 per cent, as the commodity makes its gradual return to normality following a price surge to record highs earlier this year.

Thermal coal trade fell by $231 million or 11 per cent, with volumes down 18 per cent and unit values up eight per cent, as the global market continues its shift towards renewable resources.

This was reflected in the strength of liquefied natural gas trade which rose $362 million or nine per cent, as quantities lifted two per cent and the value of LNG surged up 7 per cent.

Global demand for hard coking coal also reinforced the healthy trade surplus figure, growing by $14 million as exports to steel-making countries in Asia continued to rise.

Exports to Japan were particularly strong, rising $122 million or 40 per cent while China continued its interest throughout August, rising $115 million or 15 per cent.

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