A sudden slump in iron ore prices and shipments may point to Australia's export boom hitting its peak.
While the July trade surplus was still a robust $7.2 billion — only bettered by the $8 billion reported in June — the heavy reliance on iron ore to Australia's export effort suggests the recent months' performances may be about as good as it gets in the medium term.
A bounce in LNG (+5 per cent) and the always volatile gold (+66 per cent) exports rescued the surplus from a sharper fall and offset a pick-up in imports.
"Looking ahead, given iron ore's weighting in the aggregate export basket and the recent fall in prices, it seems like June's outcome is likely to be a high-water mark for the external sector," JP Morgan's Tom Kennedy said.
"This has obvious implications for the balance of payments and is central to our view that the return to current account surplus in 2Q will prove temporary."
It was a view echoed by ANZ's economics team.
"We think we have likely reached the peak in trade surpluses," ANZ's Hayden Dimes and David Plank said in a research note.
"We still anticipate strong surpluses from here but expect their size to decline as key commodity prices, like iron ore, stabilise at lower, though still elevated, levels.