Natural Resources Imports to Exceed $100 Bil.
By Lee Hyo-sik
Staff Reporter
South Korea has been paying more year after year to import crude oil and other raw materials as prices have increased fast on tight global supply and surging demand from developing countries. If the trend continues at the current pace, the world's 13th largest economy is projected to end up paying over $100 billion for the first time this year to meet its energy and mineral needs.
According to the Ministry of Industry, Commerce and Energy Sunday, the country spent $85.7 billion to bring in oil and other natural resources in the first 10 months of the year, up 6.5 percent from the same period last year.
High prices of crude oil and other raw materials make goods and services more expensive, chipping away at corporate profits and reducing private consumption.
The ministry expects the amount to surpass $100 billion by the end of the year as oil prices will continue to head upward on rising demand for heating oil during the winter. In 2006, Korea imported natural resources worth $97.3 billion.
This year, imports of petroleum-based ingredients and minerals have increased at a faster pace than those of crude oil and natural gas.
Businesses and consumers are expected to pay more for oil and other raw materials next year and beyond as prices will likely continue to increase at a fast pace on rising demand from China and other emerging economies, on top of tight global supply.
The Korea Institute for Industrial Economics & Trade projected that Dubai crude will hover between $75 and $80 per barrel next year. ``International oil prices have jumped sharply this year as demand from China and other developing countries rises, while the oil supply has remained unchanged across the globe. Also, the weak dollar and speculative forces have further pushed up prices.''
But it said international crude oil prices will not go up as fast as they have this year, adding that prices will still remain high for the foreseeable future.