Value context and insight. lkm@koreatimes.co.kr
Automobile, battery, ship exports to lead growth in H2: industry ministry
Stacked containers at Busan Port, July 2. Yonhap
By Lee Kyung-min
Chip exports to rebound in October
By Lee Kyung-min
Exports of automobiles, rechargeable batteries and ships will lead the growth of Korea's economy, while outbound shipments of semiconductors will rebound in October, the industry ministry said, Tuesday.
The production of home appliances, bio-health products and displays is also expected to recover, helping Korea's exports register a surplus in the fourth quarter.
In its economic outlook and policy direction reports, the Ministry of Trade, Industry and Energy said sales of eco-friendly cars and sport utility vehicles (SUVs) will increase in the second half of this year, while shipbuilders should be able to win enough orders to generate profits for the next few years.
The ministry expects the pace and strength of Korea's export growth to be determined largely by how fast China resumes imports of Korean-made chips.
“The country's trade conditions will be able to find a solid footing as early as September, provided that both market conditions for the chip industry and exports to China show concrete improvements,” a ministry official said.
Rechargeable batteries are expected to continue generating strong sales in the years to come, as illustrated by backlog orders of 775 trillion won ($599 billion) as of 2022.
Semiconductors, which account for about a fifth of Korea's export revenues, are expected to log a surplus after October, buoyed by easing oversupply conditions starting in the third quarter due to production cuts by local chip titans, including Samsung Electronics.
Semiconductor exports in the first six months of this year stood at $43.21 billion, down 37.4 percent year-on-year, to become the chief contributor to the overall export downtrend.
Also fanning the optimistic outlook is an earlier-than-expected recovery of U.S. consumer sentiment translating into a rebound in exports of Korean home appliances, displays and bio-health products.
Home appliance exports are projected at $4 billion in the second half, down 8 percent from a year ago.
Display sales are expected to pick up, ending the sluggish performance seen during the first six months due to industry-wide production cuts prompted by a decrease in demand for mobile phones and TVs.
The second-half recovery in demand will be underpinned largely by the popularity of high-end organic light-emitting diode (OLED) TVs and screens.
Bio-health product exports will display growth momentum, powered by the launch of new biosimilar products and the expansion of contract manufacturing organization (CMO) businesses and related products.
But it remains to be seen whether these developments will lead to a meaningful increase in exports to offset months of weak sales of vaccines and diagnostic kits.
Korea registered a trade surplus of $1.13 billion in June, ending a 15-month trade deficit. Powering the upbeat performance was a slower-than-expected decrease in exports of semiconductors, coupled with stabilizing global energy prices translating into a decrease in fuel import costs.