Australia’s key commodity prices continued to rip higher in January, according to the RBA’s Commodity Price Index released late Wednesday afternoon.
Based on preliminary estimates, the RBA said prices jumped by 5.5% in SDR terms, following an even larger 8.8% gain in December.
That left the index up 55.7% from a year earlier, thanks largely to ballooning iron ore and coking coal prices, Australia’s largest commodity exports by dollar value.
The SDR, or special drawing right, is a basket of currencies that includes the US dollar, Japanese yen, euro, UK pound and Chinese renminbi.
In Australian dollar terms, the index rose by a smaller 4.1%, thanks to renewed strength in the Australian dollar, leaving the index up 43.6% from a year earlier.
As can be seen in the chart below, supplied by the RBA, after plummeting for the best part of five years, the price of Australian commodity exports have skyrocketed over the past year, led by bulk commodities which surged by an amazing 101%.
Thank you very much, China!
While the index continued to ratchet higher in January, the RBA says its preliminary estimates for iron ore, coking coal, thermal coal and LNG export prices are based off recent export price movements.
That was in stark contrast to the performance of these commodities in spot markets, which skidded by 6.8% in January in SDR terms.
That suggests that if there are to be any revisions to the data, they’ll almost certainly be to the downside.
Still, even with the potential downward revision, recent strength in commodity prices could see Australia potentially post its largest trade surplus on record when the ABS releases its international trade report for December on Thursday.
For those interested, this table from the RBA shows the weights currently being used to calculate the commodity price index.