China Slowdown also Affects Indian Iron Ore Exports
By Vittorio Hernandez | September 10, 2012 11:03 AM EST
It is not only Australia that has been negatively affected by the slowdown in the Chinese economy which resulted in a drop in iron ore prices in the world market.
India, the world's third-largest supplier of iron ore, also experienced a more than 40 per cent drop in iron ore exports for the June quarter, Bloomberg reports.
For the first quarter of the fiscal year, iron ore exports plummeted to 12.11 million tonnes worth 52.36 billion rupees, data from the Ministry of Finance said. In comparison to the previous quarter, India exported 57.35 million tonnes of iron ore.
The report also blamed the 30 per cent export duty imposed by the Indian government which made iron ore from the Asian giant less attractive compared with those from Brazil or Australia. As a result, Indian miners were selling the commodity at low profits or loss as prices went down 36 per cent to less than $90 a tonne.
Due to the continuous fall of commodity prices, Australia logged its seventh consecutive trade deficit in July to $556 million from $227 million in June, according to the Australian Bureau of Statistics.
Reports said that Aussie exports dipped 3 per cent from June, imports went down by 1 per cent and the value of metal-ore and minerals exports went down 3 per cent.
Experts said the continuous decline in iron ore would also create a large hole in Australia's economic which expected just a small budget surplus based on a $150 per tonne price of iron ore price in the international market when the federal budget was made in April.
The budget surplus was also promised on China expanding at 8.5 per cent for 2012, down actually Beijing's 9.2 per cent growth rate in 2011.
On Wednesday, iron ore price on the spot market plummeted by 41 per cent to a three-year record-low of $86.70 per tonne.
"The period of super-sized trade surpluses driven by rising export values has well and truly passed. The recent performance of spot commodity prices like iron ore suggests any return to those surpluses remains some way off," The Australian quoted Deutsche Bank chief economist Adam Boyton.
TD Securities head of Asia-Pacific Research Annette Beacher, in a note to clients, said that due to the fact the imports would likely remain elevated because of high resource investment there is little chance for a return to a budget surplus until 2013. She said for the rest of 2012, trade balance would likely be stuck in deficit and net exports would drag Australia's gross domestic product growth rate.
To contact the editor, e-mail:
Most Popular Slideshows
- In Photos, Typhoon Rammasun Blasts the Philippines
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- Australian Stock Market Report – Midday July 23, 2014
- Australian Stock Market Report –Midday July 22, 2014
- Major European & U.S. Airlines Cancel Flights to Israel after Rocket Attack on Tel Aviv Airport
- BHP Billiton Goads Abbott Government to Also Repeal Mining Tax Law
- Australian Stock Market Report – Morning July 23, 2014
- Samsung Galaxy Note 4 Apps Leak Online, Five Fresh Features to Expect from the Android Smartphone
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Google Nexus 8 Release Date Soon Along with 2 More HTC Android Tablets – Reports
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- Upcoming iPad Mini 3 Could be 30% Thinner and Likely be Called iPad Mini Air; Apple Q3 Results Show 9% Decrease in iPad Sales