It appears that a one-off payment could explain Australia’s record trade deficit blow-out.
Australia’s April trade data was a big miss on expectations with imports up 4% and exports down 6% the seasonally adjusted deficit of $3.888 billion is the largest on record. The previous record was set in February 2008 at $3.881 billion.
A significant component of the new record was a huge financial outflow from Western Australia to Korea for machinery or equipment.
This chart shows merchandise imports for Western Australia, and the spike is crazy.
This chart shows just merchandise imports from Korea to Western Australia, and makes it even more pronounced.
So what’s going on? As the mining investment boom winds down in Western Australia there aren’t a lot of big purchases happening. And this kind of data is susceptible to huge spikes beacuase of the nature of the large machinery needed for the kinds of industry at work in Western Australia.
But one operation ramping up is Gina Rinehart’s $10 billion Roy Hill project.
In March Gina Rinehart’s company Hancock Prospecting christened the first of 21 locomotives to arrive in Port Hedland. The first 14 of the 21 locomotives arrived in Western Australia in late January from General Electric’s base in Erie, Pennsylvania in the United States.
A spokesperson at Roy Hill confirmed it did take delivery of a locomotive in March but did not comment on whether there was a payment made to Korea.
The engineering arm of Korea’s Samsung C&T is the group leading construction of the mine. First ore is scheduled to be shipped from the project in September.
We’re not saying it was Roy Hill. But it wasn’t Rio.
Chevron is the other suspect and we’re reaching out to them.