Iron ore exports drive Australia’s record trade surplus with China in May

Australia has reported a record trade surplus with China in May, as iron ore exports continued to reach new highs despite ongoing trade and political tensions between the two countries.

China accounted for 39% of Australia’s total exports of A$42.23 billion in May, according to data from the Australian Bureau of Statistics (ABS). Iron ore was the primary driver of Australia’s export revenues in the month, accounting for nearly 40% of the total sum.

The May iron ore export receipts were 17.5% above the previous record of $14.12 billion in March. China regularly accounts for around 80% of Australia’s iron ore exports, which implies that iron ore receipts from China were about $13.27 billion or 31% of all of Australia’s export revenue.

The $9.7 billion trade surplus with China exceeded the previous record surplus with the world’s largest steel producer of $8.5 billion in June 2019.

Iron ore has remained immune from the list of Australian exports 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.

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 $310 billion in 2020-21. Around 48$ of the total energy and mineral exports receipts will come from iron ore over 2020-21.