Australia's trade deficit deepens as Chinese demand falls
Australia's trade balance has plunged further into deficit because of falling demand for minerals from China, its biggest export market, The Australian newspaper reported on Thursday.
Australia's sales to China have now fallen in five of the last six months and October's shipments of 3.1 billion Australian dollars (2.8 billion U.S. dollars) are now 25 percent below the peak reached in March.
The trade deficit jumped to 2.4 billion Australian dollars (2.2billion U.S. dollars) in October, which was the worst since March last year and one of the biggest on record.
Australian Trade Minister Simon Crean said the deficit was the result of weak exports, which fell 3.5 percent in the month, while imports were also 0.8 percent lower.
"This is another reminder that Australia is not immune from the global economic downturn," he said.
Strong demand from China in the first quarter of this year was one of the reasons Australia was able to avoid recession, alone among developed nations.
However, many of China's purchases at that time appeared to have been speculative stockpiling at a time of low prices and cheap credit.
"In the first half of the year, there was significant Chinese buying of all sorts of commodities as prices were at attractive levels from their perspective," Wilson HTM commodities analyst Keith Williams said.
"One would expect that they have eased off from these levels, having restocked and with prices having run up higher. There is not the same buying imperative."