Australia’s goods trade balance (the trade balance excluding services) rebounded to $7.1 billion in October, broadly in line with market expectations. The increase was driven by a rebound in iron ore export values, which more than offset ongoing declines in coal and LNG export values.
Iron ore exports rebounded in October

Source: Goldman Sachs, ABS
Iron ore is Australia’s largest and most valuable commodity export, with export earnings in 2021-2022 of $133 billion. Iron ore mining is estimated to directly employ over 43,000 Australians. While iron ore contributes tremendously to the Australian economy, the economy is in turn extremely dependent on iron ore.
The iron ore industry contributed nearly 20% of total company tax paid across the whole of Australia — about $15 billion last year — and that excludes state-based royalties of around $7 billion. Analysis of Australian company tax paid by BHP, Rio Tinto, Fortescue, Hancock Prospecting and Mineral Resources reveal these 5 companies paid out a combined $15.4 billion in tax last year.
China buys more than 80% of Australia’s iron ore exports. Australia has the largest known iron ore reserves in the world, with almost all of them concentrated in the Pilbara. Australia produces half of the world’s iron ore exports.
Iron ore is the source of primary iron for the world’s iron and steel industries. It is therefore essential for the production of steel, which in turn is essential to maintain a strong industrial base. Almost all (98%) iron ore is used in steelmaking.
Iron ore price chart over 5 years

Source: Trading Economics
China is key to price movements in the iron ore market, with investment in infrastructure projects, building and construction activity and the real estate sector being significant iron ore price levers.
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