While Australia may have just recorded its largest trade deficit on record in April, things are starting to look up for its largest goods export.
Spot iron ore, having fallen to a low of $US47.08 back on April 2 of this year, rallied hard again on Thursday.
According to pricing from Metal Bulletin, the spot price for 62% fines rose $US1.44, or 2.3%, to $US64.77 a tonne, taking the total gain from this year’s low to 37.6%.
Despite the two-month rally, year to date the commodity is still down 9.1%.
In an indication that Australia’s trade position may improve modestly in the months ahead, exports from Port Hedland, Australia’s largest iron ore loading port, rose to a record 38.002 million in May. From a year earlier that represents an increase of 5.4%, an improvement on the 1.6% pace recorded in the 12-months to April.
While stagnant global steel production and increasing seaborne supply suggest prices should remain under pressure, for the moment, the trend looks to be higher.