Available now, the April edition of Efic’s World Risk Developments examines the impacts of Cyclone Debbie on coking coal exports; questions whether stronger world trade growth will boost Australian commodity producers; and looks at the potential for US trade policy diversification.
Coking coal prices have doubled in the last few weeks driven by supply disruptions in Queensland due to tropical Cyclone Debbie. Cassandra Winzenried, Chief Economist at Efic says that industry estimates suggest about 12Mt of coking coal could be affected, with China likely to look at other markets to fill the supply shortfall.
Meanwhile, robust industrial activity is providing the impetus for stronger global trade, which should support Australia’s commodity exports. “When you strip out the impact of volatile commodity prices, trade volumes growth has improved significantly,” says Winzenried. “This is supported by robust manufacturing output in both advanced and emerging economies.”
Winzenried points out that Australia’s export receipts are growing at double digit pace, led by stronger resource exports. “Upbeat sentiment data suggests the improving global trade trends should continue over the coming months.”
Meanwhile, in the USA, the Treasury has told Congress that China does not meet the criteria for currency manipulation. “Specifically, China does not meet Treasury’s third benchmark, which is repeated purchases of foreign currency that amount to more than 2% of GDP,” says Winzenried.
Other nations covered in this month’s edition of World Risk Developments include Turkey, Thailand, South Africa, Iran, and Vietnam.
The April 2017 edition of World Risk Developments is available via the Efic website.
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