Soaring Coal Exports Takes Australia’s Trade Surplus to Record $16 Billion in May

A container ship is pushed to its berth by a tug at the Port of Melbourne, Australia, on June 6, 2018. William West/AFP via Getty Images

Australia’s trade surplus hit a record $16 billion (US$10.9 billion) in May following a hike in coal exports.

The surplus went up by $2.7 billion compared to the previous month and far exceeded market expectations by around $10.5 billion.

Data from the Australian Bureau of Statistics showed that exports grew by around $5 billion—or 9.5 percent—to a total value of $58.4 billion during the month.

This was fuelled by significant increases in shipments of coal, coke and briquettes (up 22.1 percent), and other mineral fuels (up 5.3 percent).

In addition, total goods exports were up 10 percent compared to April, while total service exports also climbed 4.8 percent.

Meanwhile, imports increased $2.3 billion—or 5.8 percent—to $42.4 billion, driven by fuels and lubricants (up 22.9 percent), non-industrial transport equipment (up 18.5 percent), and machinery and industrial equipment (up 6.5 percent).

Room to Grow for Tourism Market

Taylor Nugent, an economist at National Australia Bank, said while economists had expected sharp rises in coal and liquefied natural gas exports, the surplus still came as a surprise due to an upward revision to the April balance.

This picture taken shows a bucket-wheel dumping soil and sand removed from another area of a coal mine in Newcastle, Australia, on Nov. 5, 2021. Saeed Khan/AFP via Getty Images

There was also a rebound in travel exports, with tourism related activity rising 10.1 percent. Yet tourism levels in May was still below pre-COVID-19 pandemic figures.

“So far, the increase in the value of tourism-related exports (inbound travel) has outpaced the lift in tourism-related imports (outbound travel),” Nugent said.

According to Capital Economics’ Marcel Thieliant, Australia’s growth figures could increase by as much as two percentage points due to the rise in net exports—one of the largest contributions to Australia’s economy.

“While the reopening of the border seems to have provided a bigger boost to services exports than to imports so far, that should change as more Australians make holidays overseas,” he said.

Among Australia’s trading partners, China was overwhelmingly the largest export market for merchandise in May, followed by Japan, and Korea.

Although Australia’s exports to China went up by 7.4 percent to $172.9 billion in the 12 months to May, imports from China also rose sharply by 13.2 percent to a record $99.3 billion during the period.