SYDNEY – Australia’s exports to China surged to record highs in March as the Asian giant sucked in more iron for its steel industry and lowered barriers to thermal coal shipments amid thawing diplomatic relations.
Data out on Thursday showed exports of Australian goods to China hit A$19 billion ($12.71 billion) in March, a rise of 31 percent from a year earlier and pipping the previous peak from mid-2021.
The jump helped lift Australia’s total trade surplus to its second-highest on record at A$15.3 billion, a boon to mining profits and tax receipts.
Export volumes of iron ore lumps and iron ore fines to China jumped 24.3 percent and 17.7 percent respectively from a month earlier, data from Australian Bureau of Statistics showed.
Shipments of thermal coal to China surged 125 percent by volume in March from February, offsetting a drop in exports to Japan.
Beijing effectively ended an unofficial ban on Australian coal in January, allowing customs clearance for the first time since 2020 when it launched trade curbs on a series of Australian products as ties froze in the early days of COVID.
Following a leaders meeting late last year, China and Australia agreed last month to resolve a World Trade Organization dispute over Chinese barley tariffs within three months.
However, reviving trade is proving more challenging than stopping it in the first place, Reuters reported.
More than three years since China first blocked a range of Australian imports in a political dispute, restrictions are easing, but reviving trade is proving more challenging than stopping it in the first place.
A leaders meeting late last year set off a thaw in relations that saw China relax restrictions on coal in January. But three months on, in March, coal imports were still a third the 2016-2019 average.
Bureaucratic inertia meant word took weeks to filter to Chinese customs officials, say traders, who had to visit eight government departments to sort permits. In February, Australia was still not in the import license computer system, say buyers.
The economics have also worsened. Australian miners have found new customers in the interim and no longer offer concessional prices on coking coal. Meanwhile, cheaper imports from Russia and Mongolia have taken market share in China. – Reuters