Korea swings to trade surplus in June; decline in exports eases

Containers are stacked to be shipped at Busan Port, June 12. Yonhap

Korea reported a trade surplus in June for the first time in 16 months, but its outbound shipments fell for the ninth consecutive month due mainly to weak demand for semiconductors, the industry ministry said Saturday.

Outbound shipments fell 6 percent year-on-year to $54.24 billion last month, according to the data compiled by the Ministry of Trade, Industry and Energy.

The decline came as exports of semiconductors, the country's key export item, sank 28 percent on falling demand and a drop in chip prices.

But June saw the smallest export decline so far this year, possibly indicating that the country's exports may rebound in the second half of the year.

The nation's outbound shipments sank 15.2 percent in May following a 14.4 percent decline the previous month.

Exports have marked a year-on-year drop since October last year amid aggressive monetary tightening by major economies to curb high inflation and an economic slowdown. It is also the first time since 2020 that exports have declined for nine months in a row.

Imports fell 11.7 percent to $53.11 billion in June, as energy imports went down 27.3 percent, the ministry said. Korea depends on imports for most of its energy needs.

Accordingly, the country logged a trade surplus of $1.13 billion last month, ending a 15-month shortfall.

Imports exceeded exports in Korea from March 2022 through May 2023 on high energy prices, and it is the longest trade deficit the country has suffered since 1997.

The accumulated trade deficit in the January-June period came to $26.21 billion, the data showed.

By sector, exports of chips dropped 28 percent, with the country's chip sales logging a year-on-year decline since last August.

But exports by value in June reached the highest monthly level of $8.9 billion so far this year, according to the data.

Exports of petroleum products and petrochemicals also dived 40.9 percent and 22 percent, respectively, in June on falling prices.

But car exports spiked 58.3 percent, and global sales of ships soared 98.6 percent ― overseas shipments of secondary batteries also climbed 16.3 percent.

By destination, shipments to China, the country's top trading partner, fell 19 percent on a global economic slowdown, though the shipments surpassed the $10 billion level for the second month in a row.

Korea releases its full monthly export data on the first day of every following month. (Yonhap)