Australia’s trade surplus in March hit a record $10.6 billion, with exports jumping as China reopened after restrictions due to the COVID-19 pandemic.

A solid growth in mineral exports in March after Chinese factories reopened following the coronavirus shutdown has driven Australia’s trade surplus to a record $10.6 billion, in seasonally adjusted terms.

The result was also helped by lower imports due to coronavirus-affected global supply chains.

The result bettered market expectations, with analysts having forecast a median surplus of about $6 billion.

The economy had recorded a trade surplus of $3.86 billion in February.

Exports of goods and services in March rose 15 per cent to $42.4 billion, data from the Australian Bureau of Statistics showed on Thursday.

The gains were led by iron ore exports, which jumped by nearly a third.

Exports of coal (up 6.0 per cent), liquefied natural gas (up 10 per cent) also recorded solid gains and gold exports more than trebled to $2.5 billion.

But exports of travel and transport services registered a sharp drop as COVID-19 related border restrictions shut down international travel.

Overall imports of goods and services were down 4.0 per cent to $31.8 billion.

This was mainly contributed by a waning demand for capital goods and industrial supplies as local business closures and a shutdown in China affected supply chains.

Analysts expect Chinese demand for iron ore and coal to continue in coming months.

“We expect metals exports to be well supported in coming months by continued demand, particularly from China, given an expected ramp up in infrastructure investment,” HSBC economists Paul Bloxham and Daniel Smith said in a note.

They also expect both services exports and imports to continue falling sharply, given the closed borders and restrictions on people’s movements. However, lower foreign visitors to Australia will be offset by a sharp fall in Australians travelling abroad.

The trade numbers could also have some bearing on Australia’s March quarter GDP, economists say.

“Today’s data indicate both real exports and imports declined 5.0 per cent in the March quarter, suggesting net trade will be neutral for GDP growth at the start of the year. This outcome is a little weaker than we had expected,” JP Morgan economist Tom Kennedy said.

The Australian dollar has largely remained unaffected by the local data and was trading at 64.19 US cents by 1415 AEST.

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