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Australian trade surplus hits record high in June as ABS reveals lithium boom

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Adrian LoweThe West Australian
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Lump iron ore exports increased 13.2 per cent in June.
Camera IconLump iron ore exports increased 13.2 per cent in June. Credit: Ian Waldie/Bloomberg

Australia’s national trade surplus has surged to another record high on the back of strong iron ore, minerals and coal shipments in an “astonishing” result.

The $55.6 billion in exports over the month of June drove the national trade surplus to a fresh record high of $17.7b, fresh data from the Australian Bureau of Statistics on Thursday showed.

Total exports were above market expectations but some experts warned the strong results may not last, with a peak appearing near.

“Australia’s golden run of trade windfalls has been underpinned by sales of coal, iron ore and LNG. But our biggest buyer, China, has been trying to limit its reliance on coal imports, and its steel output is expected to weaken this year,” ANZ economist Madeline Dunk said.

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“Given this and the fact that commodity prices appear to have peaked, we think the trade surplus will soon start to slide.”

Commonwealth Bank senior economist Belinda Allen said the numbers were “at an astonishingly high level” and exports would continue to be supported by higher commodity prices and strong overseas demand.

“The strength of household spending, particularly as interest rates rise and the housing market slows will also be an important factor for import demand as will the price of refined petrol,” she said.

The ABS also outlined how lithium concentrate exports had surged 1189 per cent, or $1.07b, over the past year — WA accounting for more than 99 per cent of the country’s exports every month since January last year.

A strong majority of Australian lithium is exported to China — in June, it totalled $1.13b in value.

Minerals Council chief executive Tania Constable said new records were set for coal, up 188 per cent year-on-year, aluminium and bauxite, up 20 per cent, and copper, up 8 per cent.

“This export and tax performance should not be taken for granted,” she said. “Ongoing success for the industry and the community will heavily depend on a comprehensive policy environment that supports all businesses.”

Over June, the export of lump iron ore increased 13.2 per cent, and fines iron ore by 2.9 per cent. But the value of exported lump iron ore slipped 1.1 per cent — fines increased 1.5 per cent.

The value of lump iron ore exported to Vietnam increased 17.1 per cent month-on-month and by 0.7 per cent to South Korea, but to Indonesia fell 10.1 per cent, 2.1 per cent to China and 0.9 per cent to Taiwan.

Fines value exported to Vietnam fell 13.8 per cent but was up 12.4 per cent to Taiwan, 7.7 per cent to Japan and 1.2 per cent to China.

Gold exports grew 64 per cent to $3.6b, a $1.4b increase.

Westpac senior economist Andrew Hanlan said the total exports figure exceeded expectations by about $3b.

“Weakness was centred on a pull-back in civil aircraft, as well as softness in car imports which continue to be disrupted by supply chain issues,” he said.

“Excluding these two items, there was underlying strength in imports, up by 2 per cent, likely a mix of higher prices and rising volumes, to meet expanding domestic demand.”

Resources minister Madeleine King said the data showed the national economic significance of the resources sector.

“This data highlights in particular how Australia has become a world leader in the supply of critical minerals,” she said.

“In the future, we will play an even greater role to provide processed critical mineral products to our trading partners.”

Perth-based Ms King said the decarbonisation of the global economy meant Australia’s critical minerals were vital for clean energy technology.

“It is a rare opportunity for our nation to be a critical partner for the net zero emissions goals of so many of our allies and trading partners,” she said.

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