An interesting piece of information arising from yesterday’s Chinese data dump was the increase in imports from Australia, which grew by 10.9% in the month of August and by 2.9% over the year.
A chart tracking Chinese imports from Australia (in USD) against Australian exports to China (in AUD) is shown below:
Based on this chart, we might expect August’s international trade data – due for release by the Australian Bureau of Statistics next month – to show a nice bounce in exports to China, which seemingly contradicts the recent sharp deterioration in the iron ore price – Australia’s biggest export to China. Some mix of volume growth and contract pricing delaying price falls make this possible.
Looking forward, the situation will deteriorate.
Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.
