In July, inbound shipments increased by 16.2 percent year-on-year to USD 44.9 billion, faster than a 10.8 percent rise in a month earlier and compared to market estimates of a 16.6 percent growth.
Exports grew by 6.2 percent to USD 51.9 billion, compared to consensus of a 7 percent gain and recovering from a 0.2 percent fall in June. Sales went up for steel (34 percent); semiconductors (31.6 percent); petrochemical products (24.1 percent); and autoparts (7.2 percent). In contrast, outbound shipments declined for vehicles (-13.5 percent); and ships (-73.4 percent).
Among major trading partners, exports to China, South Korea’s largest trading partner, soared 27.3 percent, marking the 21st straight month of growth, driven by robust memory chip sales. In addition, sales to the US and Japan went up by 8.8 percent and 17.6 percent, respectively. Still, exports of cars to the US fell 2.6 percent while steel shipments tumbled 23.4 percent, reflecting import tariffs on steel. On the other hand, sales fell to the ASEAN countries (-1.6 percent) and India (-5.4 percent).
Considering the first seven months of 2018, the trade surplus narrowed sharply to USD 39.61 billion from USD 55.2 billion in the same period the prior year.
The trade tension between China and the US is expected to affect negatively South Korea's exports to China, its biggest trading partner and major buyer of South Korean intermediate goods.