The volume of Australian exports, moreover, has so far held up remarkably well, especially compared with those of some other countries (Table 1). Even people who were relatively optimistic, as I was, have been a bit surprised by this strength.
Part of the relative strength may reflect supply-side factors: a larger wheat crop in 2008 and the commencement of operation of an additional LNG compression train have both added to supply. There are, however, some particularly interesting developments in the pattern of demand for coal and iron ore. A large proportion of Australian iron ore goes to China and very little goes to Europe.