Trade surplus shoots higher in September on back of big jump in iron ore and mineral-fuel exports

The dollar has jumped after strong growth in iron ore exports helped push the trade surplus to above $3bn in September.

A container ship at Port of Melbourne. Picture: AFP

Australia posted a seasonally adjusted trade surplus of $3.017 billion in September, supported by strong growth in iron ore and mineral-fuel exports.

The value of exports rose by 1.0 per cent, while imports fell by 1.0 per cent, the Australian Bureau of Statistics said Thursday.

The figure is wider than analysts’ expectations of a surplus of $1.7bn.

The local dollar jumped on the release of the data, rising from US70.90c to US71.13.

The value of iron-ore exports rose by 7 per cent in September compared to August, while mineral-fuel exports increased by 6 per cent. However, some of these gains were eroded by a 3 per cent fall in coal exports.

Australia’s trade balance has been strong in 2018, supported by rising natural gas exports and a sharp fall in the Australian dollar.

The gas export boom follows a period of intense investment by companies including Chevron and Total that have long-term contracts to supply buyers in Asia.

The Reserve Bank of Australia recently pointed to the fact that with the Aussie dollar currently closer to US70c than US80c at the start of the year, it has become a tailwind for the economy.

With the emergence of liquefied natural gas as a major trade, Australia’s has broadened its exports beyond its prior heavy reliance on iron ore and coal.

Services are also a big contributor to the export picture, with a boom in foreign students swelling the education sector over the past decade.

Commodity prices have remained strong in 2018, helping to underpin several record monthly trade surpluses.

Dow Jones