Australia’s trade surplus narrows as iron ore exports slide

Australia’s monthly trade surplus narrowed more than expected in April — while still remaining healthy — as exports of iron ore and other metals declined and imports advanced.

The windfall was A$11.2 billion ($7.5 billion), coming in below estimates for a A$13.7 billion gain, Australian Bureau of Statistics data showed Thursday. Overall exports fell 5%, while imports rose 2% in the month.

Australia has posted monthly trade surpluses since January 2018, underpinned by sales of iron ore and natural gas to the rising economies of the Asia-Pacific region. The export windfall has bolstered the country’s fiscal position, with its budget set to return to surplus for the first time in 15 years.

Demand for Australian goods has been driven by top trading partner China with its strong appetite for iron ore and coal. Trade in some other commodities such as barley and wine that had been banned following a political dispute between Beijing and Canberra are likely to resume in the months ahead as ties thaw. 

Today’s report showed the value of metal ores and minerals — which includes iron ore — tumbled 10.4% in the month, while other mineral fuels — which covers liquefied natural gas — gained 1.9%.

Travel exports surged 13.8%, implying a rebound in tourism and international students that began earlier this year is continuing.

Imports increased following a jump in civil aircraft and “confidentialized items,” the report showed. Australians have also continued to take advantage of the reopening of borders to head overseas.