---
title: "Coal drives Australia’s trade surplus to record high"
description: "Australia’s economy has posted monthly trade windfalls for almost four and a half years, underpinned by sales of iron ore and coal, mainly to China."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2022-07-07-coal-drives-australias-trade-surplus-to-record-high/"
published: "2022-07-07T06:03:32"
lang: "en-ZA"
word_count: 324
---

# Coal drives Australia’s trade surplus to record high

> Australia’s economy has posted monthly trade windfalls for almost four and a half years, underpinned by sales of iron ore and coal, mainly to China.

By Bloomberg · Published 7 July 2022, 08:03 SAST

## Content

Australia’s trade surplus skyrocketed to a record high in May, driven by stronger prices of its key export – coal – while imports surged too in a sign of solid domestic demand.

The surplus widened to A$15.97-billion (R182.7-billion), easily surpassing economists’ forecast of A$10.8 billion, Australian Bureau of Statistics [data showed](https://www.abs.gov.au/statistics/economy/international-trade/international-trade-goods-and-services-australia/may-2022) on Thursday. Exports jumped 9.5%, while imports climbed 5.8%.

Earnings from coal rose 20%, boosting overall resources export receipts by 12% with gains also seen in gold, liquefied natural gas and iron ore. Meanwhile, holidaymakers pushed up services exports.

Australia’s economy has posted monthly trade windfalls for almost four and a half years, underpinned by sales of iron ore and coal, mainly to China. Australia is also a key exporter of LNG, prices for which had surged, along with commodities like wheat amid fears of supply disruption from the ongoing war in Ukraine.

[Australia sees commodities boom lifting exports to fresh record](https://www.bloomberg.com/news/articles/2022-07-03/australia-sees-commodities-boom-lifting-exports-to-fresh-record)

Today’s figures suggest exports propped up Australia’s economic growth in the second quarter. The figures will also be welcomed by new Treasurer Jim Chalmers, who has signaled a path to fiscal consolidation to help lower public debt. Chalmers will release his first budget in October.

Already, the government’s fiscal position is looking in a better shape. According to calculations by Commonwealth Bank of Australia last week, the deficit for the year to May 2022 now stands at $A33.4 billion, which is $A27.1 billion below the previous estimate in March.

There are questions over the sustainability of this golden run, however, with commodity prices in free fall this week over fears of a global recession as central banks hike interest rates.

Iron ore, a key steel-making ingredient, is languishing near its year-to-date low and is down by a third from its March peak of $166 a ton. Gold is near a nine-month low, while China signalled this month its coal imports will likely be subdued for the rest of the year. **BM**