In seasonally adjusted terms, the surplus in August came in at $989 million — up 22 per cent from the $808 million reported in July.

Overall, exports grew by 1 per cent to $32.2 billion, while imports were flat at $31.2 billion.

However, it was a surge in shipments and a recovery in price of iron ore, particularly for the top quality fines, that drove the improved performance.

The value of iron ore fines exports grew by 19 per cent on the back of a 7 per cent increase in volume and prices going up by 11 per cent over the month.

Shipments to China alone rose by 25 per cent, or more than $700 million. However, coal exports slipped (-3 per cent), as did LNG which saw volumes and prices both down 1 per cent.

Rural exports also went backwards with the value of wool shipments down 4 per cent.

The iron ore mini-boom may well have peaked with prices tumbling more then 10 per cent in September as Chinese authorities imposed strict environmental controls ahead of winter, including cutting steelmaking production by up to 25 per cent in key industrial zones.

JP Morgan’s Tom Kennedy said the pick-up in export volumes suggested trade would add to gross domestic product (GDP) growth in the third quarter after the drag caused by bad weather and floods earlier in the year.

The import side of the ledger supports the view that households have abruptly cut back on spending, with consumption goods (-3.7 per cent) and capital goods (-2.4 per cent) both experiencing large declines.

“The weakness in consumption goods imports is consistent with the recent slump in the monthly retail sales reports, and our view that the recent strength in the labour market data (hours worked and employment) is not an accurate reflection of how Australia’s household sector is positioned,” Mr Kennedy said.
Source: Abc.net.au