Australian trade: Deficit returns

Research evidence excerpt

Australian trade: Deficit returns

J P M O R G A N Australia Economic Research

02 July 2026

Australia's nominal goods trade balance swung to a deficit of A$3.0bn in May, Australian and New Zealand Interest

deteriorating A$4.4bn over the month. The move was export-driven, with goods Rate Strategy

credits falling 6.9%m/m on a sharp pullback in non-monetary gold and a reversion Tom Ryan

in metal ore exports following April's strength. Imports rose a modest 2.6%m/m, (61-2) 9003-7632

driven largely by lumpy items in capital and consumption goods. thomas.f.ryan@jpmorgan.com

J.P. Morgan Securities Australia Limited

On the credits side, the export decline was concentrated in two areas. Non-

monetary gold fell sharply, down 35.0%m/m to A$4.5bn, outpacing the decline in

gold prices over the month and suggesting some softening in export volumes.

Metal ores and minerals pulled back 9.0%m/m (-A$1.3bn) after a particularly

strong April, with some of the prior strength likely reflecting a catch up in

shipments following weather-related disruptions. Iron ore unit values were weak

across both fines (-6.0%m/m) and lump (-0.8%m/m), though volume growth was

more resilient with fines up 10.2%m/m and lump edging up 1.4%m/m. LNG

volumes fell 7.6%m/m with unit values also declining 5.6%m/m. Coal was a

relative bright spot, rising 4.2%m/m with solid volume gains across hard coking

(+12.6%m/m) and thermal (+8.8%m/m) grades. Rural goods continued to firm

(+2.6%m/m), led by meat exports (+5.4%m/m), maintaining the strength seen over

the past year.

On the debits side, the modest headline increase masked underlying compositional

moves. Capital goods rose 8.2%m/m, driven by civil aircraft and confidentialised

items (+164.1%m/m, +A$658m) and telecommunications equipment (+35.4%m/