Chinese investment. Other sectors are also at threat: in a normal year, Australia exports $12bn a year to China in education, through Chinese students travelling to study at Australian colleges and universities, but the sector has been shut down by coronavirus travel restrictions and now faces an uncertain future. Iron ore is the first commodity to break $100 billion in a boom year for commodity exports, with the commodity also breaking its monthly record in December 2020 at $12.6 billion. But the Communist power's plans to reduce carbon emissions threatens that. Exports of Iron Ore & Concentrates in Australia increased to 12572 AUD Million in December from 10297 AUD Million in November of 2020. It’s been dubbed the “Pilbara killer”, due to the flood of high-quality ore, better than what BHP and Rio Tinto dig up in Western Australia, that will be unleashed on the market when it finally gets going. The main drivers were increases to metalliferous ores, cereals and coal. “Removing over 60% of supply to China would send prices for the remainder of the ore skyrocketing, in turn hurting China’s steel industry. Figures from the Australian Bureau of Statistics showed the country's trade surplus contracted to A$5 billion (S$5.14 billion) in November, from A$6.6 billion the month before. Sales of rural goods jumped by 18% to AUD 4.15 billion, boosted by cereal grains and cereal preparations (75%) and other rural (8%). China is the largest purchaser of Australian debt. Trading Economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators, exchange rates, government bond yields, stock indexes and commodity prices. Thanks to iron ore, Australia is China’s sixth-biggest source of imports. “Fiscal stimulus in China typically involves spending on infrastructure spending on real estate, all which is kind of high-intensity steel demand.”. The country imported 1.17 billion tonnes of the steelmaking raw material last year, compared with 1.07 billion tonnes in 2019, according to the statistics released on Thursday January 14. The ABS said this increase was driven by a rebound in quantity and prices, with China paying roughly 9 per cent more per tonne of iron ore in December than in November. Exports of goods and services from Australia rose by 3 percent month-over-month to a nine-month high of AUD 37.27 billion in December 2020, as foreign demand improved in the wake of coronavirus disruptions. “Australia provides a reliable and relatively cheap source of iron ore,” he said. Exports of goods and services to China are about 7% of Australia’s gross domestic product, and iron ore is the single-biggest category. Australia’s second-largest export sector, services, accounts for nearly three quarters of our economy and more than four out of five Australian jobs. Australian iron ore export strength is offsetting weakness elsewhere Australia Bureau of Statistics, Bloomberg Australia's monthly exports to China, 3-month moving average On Friday it struck again, delivering what trade minister Simon Birmingham described as a “devastating blow” to Australia’s wine industry by imposing tariffs of up to 212% on wine it claims is being dumped in China. But while analysts might think an iron ore bypass is unlikely, the consequences would be catastrophic. Any restrictions on Australian iron ore sales to China would “send shockwaves through the market”, says analyst Julien Hall of S&P Global Platts. Metalliferous ore exports rose $2.8bn or 22 per cent, and 82 per cent of that was iron ore, which rose $2.2bn or 21 per cent to $12.5bn. Chinese demand for Australian iron ore exports surged by 21 per cent in December alone despite the trade war. Download historical data for 20 million indicators using your browser. New data by the Australian Bureau of Statistics (ABS) has revealed record high export revenue from iron-ore, gold and copper in 2020. While China is Australia’s biggest trade partner in both exports and imports, Australia is a lot less important to China. Analysts warn any restrictions on Australian sales to China would ‘send shockwaves through the market’, First published on Tue 1 Dec 2020 19.39 EST. In the meantime, Australian ore also faces the challenge of increasing production from Brazil, which is struggling with Covid-19 at the same time as its mining industry tries to recover from tailings dam collapses that have killed hundreds of people and left mine operators nervous to dig ore in heavy rain. Langcake said the situation had deteriorated since last week, when BIS Oxford Economics put out a note saying restrictions on iron ore imports to China were unlikely. year and continues an expansion in exports that commenced five years ago. Australia Exports of Iron Ore & Concentrates. The site has a troubled history – it’s mired in corruption allegations dating back almost a decade – and will require billions of dollars to develop, a task that includes building a 700km train line to get the ore to port. “We believe it makes economic sense to build an infrastructure system that can be shared,” Rio’s head of minerals, Bold Baatar, told the Wall Street Journal in October. They are involved in both ventures that have an interest in Simandou: a consortium led by Singaporean shipping and mining conglomerate Winning International Group that includes China’s Yantai Port Group has rights to half the development while the other half is controlled by a joint venture between Rio Tinto and a group of Chinese state-owned enterprises. | Hamish McDonald, More than 60 Australian coal-carrying ships kept waiting to unload off ports in China. The warning that China could turn to Africa to bypass Australian iron ore has in the past come from the country’s most hawkish English-language outlet, the Global Times, which has in the past few days been in the vanguard of the attack on Australia over allegations of wine dumping and references to the Brereton report on alleged war crimes by Australian special forces in Afghanistan. While the Pilbara iron ore deposits were known, such as the Mount Whaleback deposit discovered in 1957 by Stan Hilditch, it was not until 1960, when the Australian government lifted the embargo on iron ore exports that it had put in place because of concerns the mineral was in short supply, that mining began in earnest. Thanks to iron ore, Australia is China’s sixth-biggest source of imports, Department of Foreign Affairs and Trade statistics show. Exports of Iron Ore & Concentrates by Country, Australian Shares Close Near 12-Month Highs, Australia Building Permits Rise the Most in 3 Months, Australia Business Sentiment Soars in January, Australia Retail Sales Drop For First Time in 3 Months, Australia Posts Largest Trade Surplus in 6 Months, Australia Markit Services PMI Slows in January, Australia Holds Rates, Expands Bond Buying, Australia Job Ads Rise to Near 2-Year High, Australia Manufacturing PMI Hits Highest Since 2016, Uganda Holds Leaves Interest Rate Steady at 7%, Bulgaria CPI Falls for 1st Time Since 2016, Greece Consumer Prices Fall for 10th Straight Month, Russian Ruble Appreciates to 1-Month High, Eurozone Trade Surplus Widens in December, Eurozone Industrial Output Falls More than Forecast, Oil Hits 13-Month High on Middle East Tensions. Analysis: Amid rising trade tensions, Chinese interests are keen to develop a high-quality deposit in Guinea. Across China and around the clock, furnaces fuelled by Australian iron ore pump out the steel the country needs to build its way out of the coronavirus downturn. “Just two months after the ban, Australian metallurgical coal is now selling 60% cheaper than Canadian or US material of similar quality,” he said. But Australia buys just 1.9% of China’s exports, making it the country’s 13th-biggest market. But could China replace Australian iron ore with metal from somewhere else? Winning’s conglomerate claims to be willing to build the 700km of track needed to open the mine – and says it wants to do so by 2025. This has put pressure on Rio Tinto to move forward plans to dig into its half of the deposit and chip in to fund the railway so that it can use it. He said that once Simandou was up and running and pumping out 150m tonnes of iron a year, it “could become an alternative supply market for China, but it probably is unlikely to completely displace Pilbara iron ore exports”. Publish your articles and forecasts in our website. Australia unwilling to ‘give up ground’ as iron ore exports to China rise ... according to the National Bureau of Statistics. A worker inspects conveyer belts transporting iron ore at the Fortescue Solomon mine in the Pilbara region of Western Australia. Thanks to iron ore, Australia is China’s sixth-biggest source of imports, Department of Foreign Affairs and Trade statistics show. The Australian government had net positive bond holdings) a decade earlier in the 2006–07 fiscal year. The nation consumes about 1bn tonnes of iron ore a year, a little over 60% of which comes from Australia. China’s iron ore imports increased by 9.5% in 2020 in comparison with 2019, Chinese customs data shows. The mining sector injected $270 billion into the Australian economy last year, contributing to 62 … “Restrictions on Australian iron ore sales to China would send shockwaves through the market – likely altering trade flows, creating operational and cost-related challenges for Chinese steelmakers, while causing price dislocations for Australia versus non-Australian origins,” Hall said. The Trading Economics Application Programming Interface (API) provides direct access to our data. Overall, a $4.9 billion (16 per cent) increase in exports was recorded for December 2020 bringing total exports to $34.9 billion. Since then, things have become much worse. Iron ore adjustments are applied on an international merchandise trade basis at the Australian Harmonized Export Commodity Classification (AHECC) level. History. Part of the answer lies at a place called Simandou, deep in the interior of Guinea, in west Africa. The minerals and fuels sector made the greatest contribution to Australia’s exports in 2018-19. Does Australia really have to be so strident when it comes to China? “It would also force a flood of Australian iron ore to chase after less abundant, lower-priced, non-Chinese demand, naturally sending prices south.”. “So far, China-Australia relations have yet to reach the stage where their iron ore trade needs to be impacted, and we hope the situation doesn’t deteriorate further,” it said. - The Australia natural resources industry has produced revenue records for iron ore, gold and copper in 2020, according to the Australian Bureau of Statistics data. “There’s not a ton of leverage on the Australian side,” Langcake said. Exports of goods and services to China are about 7% of Australia’s gross domestic product, and iron ore is the single-biggest category, at about 40% of the $153bn in goods and services Australia sends to China every year, according to Department of Foreign Affairs and Trade figures. In the past six months, China has also banned imports of beef from four of Australia’s largest slaughterhouses, imposed an 80.5% tariff on barley, and suspending imports from two big producers, stepped up customs checks on food, leaving tons of lobster marooned in transit and stopped timber imports from Queensland. Coal, coke and briquettes are adjusted on a balance of payments basis in current price, original terms. And Australia’s $14bn-a-year coal trade has already been hit by a Chinese port go-slow that has left more than 60 ships sitting idle off the coast. “And this is also a time in China’s economic recovery in which steel demand is really high. Sean Langcake, a senior economist at BIS Oxford Economics, said Australia was currently better positioned to sell China ore than its main rival, Brazil. Based on the production of usable iron ore, Australia and Brazil are some of the largest iron producers in the world. The strong trade balance was driven by the highest ever exports of metalliferous ores – mainly iron ore – and cereals, ABS head of international statistics Katie Hutt said. With China’s ambitious Belt and Road project to build infrastructure around the world – and project state power – backing them up, Chinese firms have travelled to Africa in search of more iron ore. • This article was amended on 3 December 2020 to add a further quote from Julien Hall, which was mistakenly omitted from an earlier version. left more than 60 ships sitting idle off the coast, delivering what trade minister Simon Birmingham described as a “devastating blow”. Direct access to our calendar releases and historical data. Australia and Brazil, the world's two largest iron ore producers, remained China's top suppliers in 2020, but imports from India soared 88% as Chinese mills … “That kind of volume simply can’t be found elsewhere in the short-, medium- or even maybe long-term.”. There is substantial export to China of iron ore, wool and other raw materials, and over 120,000 Chinese students study in Australian schools and universities. Australia’s trade surplus reached a record $73bn in 2020, propelled by surging iron ore sales and a slump in demand for imported goods through the COVID-19 … Moreover, metalliferous ore exports to China alone grew by 25 per cent to $9.87 billion, accounting for 79 per cent of all Australian iron ore exports in December. On the most optimistic view, it is five years away from production – and some in the mining industry think 10 years a more likely timeframe. “With 868m tonnes shipped to China between January and September this year, Australia accounted for 62% of China’s imports,” he said. It allows API clients to download millions of rows of historical data, to query our real-time economic calendar, subscribe to updates and receive quotes for currencies, commodities, stocks and bonds. Australia’s export figures for the final month of a tumultuous past year confirmed that momentum slowed in some trade with China amid various restrictions, but unbarred exports remained strong and buoyed overall trade between the two countries, according to the final December trade data from the Australian Bureau of Statistics. Brazil is the second-largest source, providing about 20%. But iron ore remains essential to China’s development. In an editorial in June, the masthead admitted that shifting to other sources of iron would cause economic pain – but said that “it would be a big mistake for anyone to think that despite its dependence on iron ore China wouldn’t cut Australian imports”. However, analysts are sceptical that projects such as Simandou can replace Australian ore. Hall, the regional metals content director for Asia at S&P Global Platts, which closely monitors commodity markets, said it would be a difficult task. Metalliferous ores was up $2.8 billion (22 per cent), 82 per cent of which was iron ore, which was up $2.2 billion (21 per cent) to $12.5 billion. He said those coal ships sitting off China’s coast after an unofficial ban in October gave a hint of the potential pain. Exports of Iron Ore & Concentrates in Australia averaged 2282.68 AUD Million from 1988 until 2020, reaching an all time high of 12572 AUD Million in December of 2020 and a record low of 108 AUD Million in December of 1988. 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