Australia posted a fresh record trade surplus as iron ore exports defied gravity to advance further. But this might be a peak given China’s clampdown on its steel industry has already sent ore prices tumbling.
The monthly windfall of exports over imports swelled to A$12.1 billion ($8.9 billion) in July, more than one-fifth higher than economists’ estimates. Shipments of iron ore advanced despite a more than 30% decline in the price since May; economists attributed that result in part to lags from contract pricing.
“Iron-ore exports have peaked, and will face downside risks in the coming months from lower prices and more subdued demand from China,” said Faraz Syed, a senior economist for Australia at Citigroup. “Consequently, we believe export growth could peak soon.”
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