S Korea July petrochemical exports rise 18.5%, overall shipments up 13.9%

SINGAPORE (ICIS)–South Korea’s petrochemical exports rose by 18.5% year on year by value to $4.19 billion in July, supporting the overall growth in total shipments abroad, official data showed on Thursday.

The country’s total exports rose by 13.9% year on year to $57.5 billion in July, following a revised 5.1% gain in June, the Ministry of Trade, Industry and Energy (MOTIE) said in a statement.

South Korea’s export growth streak has now reached 10 months, but a rebound in imports has trimmed the trade surplus, potentially weighing on GDP growth in the current quarter.

South Korea’s economy posted a slower Q2 annualized growth of 2.3% compared with the 3.3% pace set in the preceding quarter amid sluggish domestic consumption.

Imports were up by 10.5% at $53.9 billion, reversing the 7.5% drop in June, resulting in a July trade surplus of around $3.6 billion.

South Korea’s trade balance from January to July ballooned by $51.2 billion, hitting a record high not seen since 2018.

Exports to China reached $11.4 billion in July, a 14.9% year-on-year increase and the highest in 21 months, driven by growing demand for semiconductors, wireless communication devices, and other IT items as the industry’s recovery continues.

This marks the fifth consecutive month that exports to China have exceeded $10 billion.

As a result, South Korea’s total exports to China from January to July this year reached $74.8 billion, a 6.7% increase and the highest among all export destinations for the period.

The country’s exports to the US set a new record for July at $10.2 billion, a 9.3% increase.

South Korea’s exports to southeast Asia reached $9.9 billion in July, a 12.1% increase, driven by strong demand for major export items such as IT products, petroleum products, and petrochemicals.

This marks the fourth consecutive month of growth in exports to ASEAN nations.

Exports to India increased by 13.4% to $1.6 billion, while those to the Middle East jumped by 50.6% to $2.2 billion for the second consecutive month and exports to Japan rose by 10.1% to $2.6 billion.

South Korea’s energy imports in July rose by 11.9% year on year to $10.9 billion, fueled by a 16.1% increase in crude oil shipments and a 23.8% rise in gas imports.

MANUFACTURING DIPS
Separately, the S&P Global South Korea manufacturing purchasing managers’ index (PMI) released on Thursday declined from 52.0 in June to 51.4 in July, indicating a slowdown in the sector.

Although output and new orders continued to grow, rates of expansion eased to their lowest levels in three months.

A surge in new product launches drove up orders, particularly from overseas clients, as domestic demand remained sluggish.

Consequently, new export orders continued to grow for the seventh consecutive month, fueled by robust demand from southeast Asia, the US and Japan.

“Together with today’s weaker-than-expected exports and softened business surveys, we are wary of a possible moderation in exports in the near future,” Dutch banking and financial information services provider ING said in a note.

“However, export details – by product and by destination – are quite encouraging so far, thus it is still too early to conclude that export momentum is trending down.”