South Korea Trade Surplus Smallest in 7 Months
South Korea’s trade surplus plunged to USD 1.72 billion in August 2019 from USD 6.82 billion in the same month a year earlier, a preliminary data showed. This was the smallest trade surplus since January, with exports falling much more than imports.
9/2/2019 9:15:06 AM
Exports tumbled 13.6 percent year-on-year to USD 44.20 billion in August, in line with market expectations and following a 11 percent fall in the prior month. This marked the ninth straight month of yearly decline in overseas sales, amid deteriorating external conditions, including the US-China trade dispute and Japan’s tighter restrictions on exports to South Korea. Exports of semiconductors, petrochemicals, and petroleum products decreased while those of secondary batteries, agricultural products and fisheries, and cosmetics increased.
Chip exports, which account for about 20 percent of the country's total exports, dropped 30.7 percent, to USD 8.0 billion as prices for DRAM and NAND products continued to decline compared to last year and international companies adjusted their inventories. Outbound shipments of petrochemicals dropped 19.2 percent to USD 3.5 billion, amid falling prices and demand for oil. Exports of petroleum products moved down 14.1 percent to USD 3.7 billion, due to a base effect, lower oil prices, and an increasing number of refineries in Asia.
Meanwhile, exports of secondary batteries grew 3.6 percent to USD 632 million. Batteries for high power products such as power tools and wireless vacuum cleaners were in greater demand. More batteries were sold for second-generation electric cars. Sales of energy storage systems (ESS) for electricity and industry were robust in North America. Outbound shipments of agricultural products and fisheries moved up 5.7 percent to USD 704 million, thanks to rising demand for agricultural products (up 8.2 percent), livestock products (up 11.3 percent), fisheries (up 2.3 percent), and forest products (up 6.6 percent). Those of cosmetics inched up 1.1 percent to USD 519 million on the back of greater sales of deodorants, perfume, face washes, and foundation makeup products.
Among major trade partners, exports to China went down 21.3 percent mostly because of decreased sales of semiconductors, petrochemicals, wireless communications devices, and steel products; and those to the Central and South America inched down 18.3 percent largely due to lower demand for auto parts, general machinery, steel products, and displays. Meanwhile, exports to the CIS gained 8.8 percent on the back of improved sales of general machinery, auto parts, and petrochemicals; and those to ASEAN were up 1.9 percent, amid increased shipments of petroleum products, ships, wireless communications devices, and auto parts.
Meantime, imports slumped 4.2 percent to USD 42.48 billion in August, compared to market consensus of a 4 percent fall and after a 2.7 percent drop in the preceding month.
Considering the first eight months of 2019, the trade surplus narrowed sharply to USD 23.16 billion from USD 44.81 billion in the corresponding period the prior year.