Crypto News: Supply Lines: Australia’s China dependence

Australia's trade surplus narrowed in March to the smallest in more than three years, reflecting household demand for imported consumer goods and a dip in the iron-ore price due to worries about China's outlook.

The monthly trade windfall of A$5 billion ($3.6 billion) came in well short of a forecast A$7.3 billion and was the smallest since November 2020, government data showed Thursday. Imports jumped 4.2% while exports edged up just 0.1%.

Stagnant overseas sales in March followed a 13% drop in the price of iron ore, Australia's biggest export. That came in response to mounting concern about the health of the economy in China, which buys three-quarters of global supply.

Iron ore's losses reversed in April due to stronger first-quarter GDP in China and it's now trading around $110 a ton. That will be a fillip for Australia's budget when it's handed down in less than two weeks as high export prices typically bring a fiscal windfall.

Australia's open, trading economy moves to the rhythms of its larger partners, meaning that China's health is quickly reflected in the performance Down Under.

On the other side, a 4% increase in imports of consumer goods highlights the economy's surprising resilience to 12-year high interest rates. While many Australians are complaining about the financial stretch — the nation has some of the highest household debt in the developed world — a tight labor market, sticky inflation and rising property prices all suggest otherwise.

Similar to the US, strong demand in Australia's economy combined with stubborn inflation point to the Reserve Bank keeping interest rates unchanged in the near term. The RBA will announce its policy decision on Tuesday.

Related Reading:

—Michael Heath in Sydney

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Returning to growth | Taiwan's factory activity expanded for the first time in two years, bolstering Asia's manufacturing heft as demand for the region's goods begins to firm up. The semiconductor powerhouse posted a manufacturing purchasing managers' index of 50.2 last month, up from 49.3 in March and posting its best result since April 2022, according to data published Thursday by S&P Global.

Maersk, a bellwether for global trade, said a strong start to the year has improved the outlook for container trade demand worldwide.
Rail workers demanding more rest time moved closer to a strike that would disrupt supply chains from Halifax to Vancouver and down through the Midwest to the Gulf of Mexico.
US factory activity contracted in April on declining demand while input prices rose at the fastest pace since inflation peaked in 2022.
Intel has committed $28 billion to build a chip fab in Ohio that, if all goes well, will credibly compete for contracts to manufacture semiconductors used in smartphones and in the training of next-generation artificial intelligence algorithms.
Microsoft will invest $1.7 billion to build out cloud computing and artificial intelligence infrastructure in Indonesia, betting on Southeast Asia's biggest economy to spur growth.
SK Hynix revealed that its capacity to make high-bandwidth memory chips is almost fully booked through next year, underscoring the intense demand for semiconductors essential to AI development.
Antoine Vagneur-Jones, the head of BloombergNEF's trade and supply chains team, explains how China is manufacturing clean energy technology at a breakneck pace — driving down prices on everything from solar panels to lithium ion batteries and causing a real headache for countries looking to onshore clean-tech equipment manufacturing.

Qatar Economic Forum: On May 14-16, join heads of state, global business leaders and technology innovators in Doha to identify solutions to the major issues driving global boardroom conversations. Learn more here.

Bloomberg is sponsoring the upcoming Gartner Supply Chain Symposium/Xpo 2024. To connect with top supply chain solution providers meeting in Barcelona, Spain, from June 10-12, click here for more information.

Chemical and international intermodal volumes are poised for growth this year in North America, but the potential strike from the Teamsters Canada Rail Conference poses a significant near-term risk to traffic, according to Bloomberg Intelligence.
The most significant upside surprise in the April ISM manufacturing report came in the prices-paid index, which posted its highest reading since June 2022. That's not a good sign for the Fed, according to Bloomberg Economics.
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