Iron Ore, Coal Boosting Australia Economy
Australia’s economy is likely to stay upbeat after the country on Friday reported a surprise A$1.243 billion ($912 billion) trade surplus in November—the first in almost three years—as bulk commodity exports beat the market forecast of A$500 million deficit seen by analysts polled by Reuters.
Boosting the economy was a sustained rally in iron ore and coal prices, which surged in 2016 due to demand from China after it cut excess capacity and on expectations from US president-elect Donald Trump’s massive fiscal stimulus plan, CNBC reported.
According to the Australian Bureau of Statistics, exports jumped 8% from a month ago to A$30 billion that sent figures bucking analysts’ expectations. Imports were unchanged from October.
Broker CommSec Equities’ analyst Savanth Sebastian said he expected surprise surpluses to continue for the next few months on support from commodities and weakness in the Australian dollar relative to the greenback.
Other than strong iron ore and coal prices, there will also be a lift in exports from mid to late 2017 as mega liquefied natural gas projects come online, he said.
“The outlook is relatively upbeat in the medium-term for the Australian economy,” Sebastian said.
The services industry was doing well too, with robust tourism figures supporting overall trade numbers, he added. Government figures showed tourism-related services credits rose A$24 million or 1% to A$4.05 billion from October.
This will likely lead to positive fourth quarter GDP numbers after the “anomaly” of a 0.5% contraction in the third quarter, he said. The country will also likely miss a technical recession, which is typically defined as two quarters of quarterly contraction.
While the stronger dollar will weigh on commodities, which is traded internationally in the greenback, a weaker Australian dollar will also help with exports from Down Under in general.
source: Financial Tribune
Top News
Glencore in talks to sell Philippine copper smelting unit
Rasul Khalife Soltani, Secretary of the Iranian Steel Producers Association on the sidelines of the 1403 Steel Symposium:
Mobarakeh steel is producing green steel through scrap recycling
Norilsk Nickel plans to sell all it produces in 2025
Volkswagen buys 9.9% of Patriot Battery Metals for $48 million
India’s record gold import said to be due to calculation error
Sibanye raises $500m via metals streaming deal with Franco-Nevada
Norge Mining acquires Europe’s largest natural graphite producer
Mercuria partners with Zambia on metals trading venture
Aluminum price falls to one-month low in wider commodity slump
Lure of Anglo’s copper mines could test BHP’s spending resolve
Copper giant Peru foresees another production plateau in 2025
Iron ore price weakens as Australia flags return to sub-$100 prices
Nickel price hits 4-year low as gloom offsets potential Indonesia cuts
Mercuria partners with Zambia on metals trading venture
Sibanye raises $500m via metals streaming deal with Franco-Nevada
Triple Flag to acquire royalty on Tres Quebradas lithium project
Volkswagen buys 9.9% of Patriot Battery Metals for $48 million
Aluminum price falls to one-month low in wider commodity slump
India’s record gold import said to be due to calculation error
Lure of Anglo’s copper mines could test BHP’s spending resolve
Iron ore price weakens as Australia flags return to sub-$100 prices
Nickel price hits 4-year low as gloom offsets potential Indonesia cuts
Sibanye raises $500m via metals streaming deal with Franco-Nevada
Triple Flag to acquire royalty on Tres Quebradas lithium project
Volkswagen buys 9.9% of Patriot Battery Metals for $48 million
Aluminum price falls to one-month low in wider commodity slump
India’s record gold import said to be due to calculation error
Glencore in talks to sell Philippine copper smelting unit
