The bad news is that the weather’s been bad. The good news is that earnings for some commodity exports are up anyway. Is there any stopping the resources boom? Not even Mother Nature can rain on this parade.
Cyclone activity in the northwest and in New South Wales did dampen export volumes and earnings for some commodities in the most recent quarter. “Earnings from mineral resources fell by 5.5% compared with the previous quarter to $25.5 billion,” according to new figures from ABARE. Export earnings from iron ore pellets fell by 12% to AU$3.5 billion. Alumina fell by 17% to AU$1.4 billion. Zinc fell by 18% to AU$1 billion and copper by 10% to AU$1.5 billion.
It wasn’t all bad news, though. “Earnings from refined gold were up $161 million (7%) to $2.5 billion, nickel exports rose by $150 million (7%) to $2.2 billion, and aluminum increased by $62 million (5%) to $1.4 billion.” ABARE also said that world prices for mineral commodities were up 21% in the last year, while energy commodities were down by 12%.
There aren’t going to be too many quarters where energy prices decline worldwide, we predict. That number surprised us. But any temporary dip in energy or base metals prices must look like a giant buying opportunity to the new breed of mega-funds, which includes China’s State Foreign Exchange Investment Corporation and the countries of the Gulf Cooperation Council (GCC, the cashed up oil-barons of the Middle East).
Markets and Money