Source : https://www.argusmedia.com/en/news/2230031-australia-posts-record-trade-surplus-with-china-in-may
Australia reported a record trade surplus with China in May driven by higher iron ore export receipts, despite trade and political relations between the two countries deteriorating over the past 18 months.
China accounted for 39pc of Australia total exports of A$42.23bn ($32.77bn) in May, well above Australia's second-largest trading partner Japan that accounted for almost 10pc, according to trade data from the Australian Bureau of Statistics (ABS).
The export receipts were driven by another record for iron ore export revenues of almost 40pc of all of the country's exports in May. The iron ore export receipts were 17.5pc above the previous record of A$14.12bn in March.
China accounts for around 80pc of Australia's iron ore exports. This implies that iron ore receipts from China were about A$13.27bn or 31pc or all of Australia's export revenue in May and around 80pc of the A$16.48bn in export receipts Australia received from China in May.
The A$9.7bn trade surplus with China exceeded the previous record trade surplus with the world's largest steel producer of A$8.5bn in June 2019.
Iron ore has remained immune from the list of Australian exports, which includes thermal coal, subject to extra scrutiny from Beijing. China suspended its main economic talks with Australia in May following a move by Canberra in April to end potential infrastructure deals between the Victorian state government and Beijing.
China has few options in finding alternative iron ore suppliers to Australia, which is the world largest exporter of iron ore.
Combined export receipts from iron ore, LNG thermal and coking coal and metal ore rose to a record high of A$25.08bnin May, 10.8pc above the previous record of A$22.63bn in April, which in turn was revised down slightly from the original estimate of A$22.94bn, and above the A$18.31bn recorded in May 2020.
The Australian government's commodity forecaster Office of the Chief Economist this week forecast export receipts from energy and minerals to rise to more than A$310bn in 2020-21, up from the previous forecast of A$296bn made in March. Around 48pc of the total energy and mineral exports receipts will come from iron ore over 2020-21.
Australia's iron ore receipts in the first 10 months of the 2020-21 fiscal year to 30 June rose by 45pc to A$134.30bn from A$92.68bn in the same period a year earlier.
By Kevin Morrison