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South Korea's Trade Surplus: Analyzing July's Export Decline

Photo by CHUTTERSNAP / Unsplash

Seoul, South Korea - The Ministry of Trade, Industry and Energy (MOTIE) reported that South Korea's exports totaled $50.3 billion in July, down 16.5% from a year earlier.

Imports fell 25.4% to $48.7 billion. This resulted in a trade surplus of $1.6 billion for the month.

Why it matters:

The figures highlight the country's ability to maintain a trade surplus despite challenges in key export sectors.

The Key Points

  • Semiconductor Sector: There was a 33.6% decline in semiconductor exports, driven by a 41.7% decline in memory chip exports. Declining DRAM and NAND prices and the comparison to last July's significant $11.2 billion exports contributed to this trend.
  • Energy Imports: South Korea's imports fell, with significant declines in crude oil (down 46%), natural gas (down 51%), and electricity (down 47%).
  • Automobile Exports: The automotive sector posted a 15% increase in exports, continuing its 13th month of growth. In particular, there was notable demand for high-value vehicles such as environmentally friendly cars and SUVs in North America and Europe.
  • Tech & Display: Display exports decreased by 4.6% due to reduced domestic LCD production and slower demand for mobile OLEDs. Computer exports, including personal computers and laptops, also fell 33.4%.

The Big Picture:

There were regional differences in export performance. In the U.S. and EU, exports of automobiles and machinery increased.

However, price declines in semiconductors and petroleum products weighed on overall export figures. U.S. exports remained above the $9.0 billion mark for the fifth month, driven by demand for automobiles and machinery.

Meanwhile, exports to ASEAN and China declined, linked to the performance of the semiconductor industry and movements in oil prices.

Amidst these dynamics, areas such as the Middle East showed increased demand for Korean automobiles and machinery. At the same time, shipbuilding faced challenges, with a 30.9 percent drop in orders from the previous July.