Graph 6  An important factor underpinning this positive outlook is the lift in Australia’s terms of trade, which are expected to regain their peak of a couple of years ago. This would bring them back to around the very high level they reached in the early 1950s when wool prices spiked at the time of the Korean War (Graph 7).
Over the past six months, the prices of most commodities have increased, although it is the prices of iron ore and coking coal that have risen particularly strongly. These commodities share the common feature that they are inputs into the production of steel.