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Korea's exports gain 15.6% in first half of 2022 2022-07-01

The Ministry of Trade, Industry and Energy announced on July 1 that Korea’s exports in the first half of 2022 increased 15.6 percent, reaching USD 350.3 billion.

Imports went up 26.2 percent to $360.6 billion, resulting in a trade deficit of $10.3 billion.

For the month of June, Korea’s exports amounted to $57.7 billion, expanding 5.4 percent from last year. Imports jumped 19.4 percent to $60.2 billion.

The trade balance stood at a deficit of $2.5 billion.

Exports hit the highest value for the month of June in history, despite less operating days compared to previous year and truckers’ strike. Daily exports climbed up 15.0 percent to $2.6 billion.

June marks the 20th consecutive month in Korea’s stride of positive growth, even in the face of prolonged Russia-Ukraine war, interest rate hikes, intensifying concerns for global economic downturn and the strong base effect of June 2021.

By item, semiconductors, petroleum products, steel, EVs and bio-health topped all past June records, whereas automobiles and general machinery suffered backlog issues and declined year-on-year.

In detail, semiconductors (up 10.7 percent) benefited from the rise of datacenter investments and robust demand for servers, recording 14 consecutive months of surpassing $10 billion in exports.

Computers (up 9.6 percent) suffered production cutbacks due to dwindling demand from China, but the damage was offset by local datacenter investments expanding in the U.S., as well as continued growth of corporate SSDs.

Steel (up 5.4 percent) enjoyed the higher unit prices from surging prices of raw materials like iron ore and coal, resulting in exports growth for 18 consecutive months, with increased exports for items like steel sheets and pipes in particular.

Petroleum products (up 81.7 percent) set a new record for all June exports as high oil prices (over $110 per barrel), high refinery margins, operation ratio and soaring recovery of travel demand and aviation fuel exports simultaneously contributed to the steep jump.

Bio-health (up 3.8 percent) increased in exports for the seventh consecutive month and hit historic highs as newly developed saliva-based COVID test kits and biosimilars did well in sales.

Petrochemicals (down 0.4 percent) dropped in exports as truckers’ strike and prolonged oversupply injured exports performance, which higher unit prices failed to offset.

Automobiles (down 2.7 percent) saw strong sales of eco-friendly cars and higher unit prices, but exports delays from truckers’ strikes and supply chain bottlenecks of auto chips parts led to an overall drop.

Ships (down 36.0 percent) were harshly impacted from lack of orders during both COVID and during times of price plummets.

Displays (down 5.9 percent) enjoyed the production scale-ups of high value-added mobile OLED panels and IT products, as well as expanded shipments of foldables and LTPOs (low-temperature polycrystalline oxide displays), but overall exports declined due to less LCD production and lower unit prices.

Home appliances (down 15.5 percent) saw continued demand for premium products worldwide, but uncertainties and backlogs from Russia sanctions and China’s lockdowns ended up in decreased exports year-on-year.

General machinery (down 11.7 percent) increased in terms of construction equipment, but exports delays and rising logistics prices from truckers’ strike affected overall exports.

Secondary batteries (down 2.6 percent) dropped by a small margin in June despite growing EV battery market and newly passed EU bill banning combustion engine cars (starting in 2035), mainly due to less operating days compared to June 2021 and China’s lockdowns impacting North America.

Textiles (down 9.2 percent) fell due to less operating days and backlog problems.

Car parts (down 3.8 percent) suffered from Russia-Ukraine war, automobile semiconductor supply chain risks and truckers’ strike, in spite of strong sales of finished cars in the U.S. and EU markets.

By region, June exports to ASEAN increased 16.7 percent, with semiconductors, petroleum products and steel at the helm.

Shipments to the U.S. (up 12.2 percent), Japan (2.2. percent), India (up 22.5 percent), GCC (up 8.1 percent) and EU (up 2.4 percent) also increased. However, shipments to China (down 0.8 percent), Latin America (down 8.3 percent) and CIS (down 44.6 percent) decreased mostly from global inflation impact and prolonged conflict.

The first half of 2022 overall, on the other hand, enjoyed better results.

All items grew in exports, with the sole exception of ships (down 30.5 percent).

Semiconductors (up 20.8 percent), petrochemicals (up 16.0 percent), petroleum products (up 89.3 percent), steel (up 26.9 percent), wireless communication devices (up 13.2 percent), displays (up 17.5 percent), computers (up 35.1 percent), bio-health (20.2 percent) posted double-digit growth.

Secondary batteries (up 9.1 percent), textiles (up 5.8 percent), home appliances (up 6.3 percent), and car parts (up 1.6 percent), and general machinery (up 1.1 percent) all showed positive growth.

Among the above, semiconductors, petrochemicals, petroleum products, steel, bio-health and secondary batteries achieved all-time highs in exports out of all first half performances.

By region, the first half of 2022 saw outbound shipments increase to all destinations, except for those to CIS (down 21.5 percent)

Shipments to China (up 6.9 percent), ASEAN (up 31.8 percent), U.S. (up 18.2 percent), EU (up 8.2 percent), Japan (up 12.0 percent), India (up 21.5 percent), GCC (up 20.2 percent) and Latin America (up 17.4 percent) all gained for the first half. Semiconductors, wireless communication devices, cars, steel and petroleum products mostly contributed to the expansion.

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