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Trade Surplus of Parts and Materials Reaches Record High

According to trends in exports and imports of parts and materials (in terms of customs clearance) in the first half of 2013 released last week by the Ministry of Trade, Industry and Energy, exports of parts and materials in the first half increased by 5.2 percent year-on-year to reach USD 130 billion.

This was a record high for exports of parts and materials in the first half of the year. It accounted for 47 percent of total industrial exports (USD 276.7 billion) over the same period.

Imports of parts and materials in the first half of the year grew to USD 81.7 billion, showing a 1.5 percent growth. The trade balance showed a record high surplus of USD 48.3 billion.

The trade balance of parts and materials reached a surplus of more than USD 20 billion for nine consecutive months. In the second quarter, Korea reached a quarterly surplus of more than USD 25 billion for the first time.

Exports of electronic components (12.8 percent), electrical parts (17.9 percent), transportation equipment components (4.2 percent) and nonmetallic minerals (45.4 percent) increased substantially, whereas those of primary metals (-15.4 percent) and oil products (-0.8 percent) decreased.

Electronic components (USD 19.8 billion), transportation equipment components (USD 10.5 billion), compounds and chemical products (USD 8.5 billion) and electronic device exports (USD 4.03 billion) reached a trade surplus, while nonmetallic mineral exports (USD -1.34 billion) continued to show a deficit.

In terms of region, the intensity of parts and materials imports and exports had eased.

Parts and materials exports to Japan showed a trade deficit of USD 10.35 billion, however the trade deficit is continuously decreasing with the slowed imports of the shipbuilding and automobile industries and a drop in import prices due to a low yen.

Korea’s dependency on exports to Japan reached its lowest level, 21.0 percent, showing an improvement in parts and materials trade structure.

The trade surplus from exports to China stood at USD 22.27 billion, and export intensity eased from last year’s 34.1 percent to 33.9 percent in the first half of the year.

Exports to the Middle East showed a trade surplus in most industries, except for nonmetallic minerals, backed by plant facility expansions. Exports to Southeast Asian nations (19.4 percent) and Central and South America (12.7 percent) also showed strong growth.

A MOTIE official noted that negative factors, including the United States’ exit strategy and a possibility of the Chinese economy’s hard landing, exist in the second half. However, he added that MOTIE has forecast Korea will reach a trade surplus of more than USD 90 billion for two consecutive years with increased exports due to a stronger yen, reduced inventories in the Chinese market and improved IT and ship industries.

The Korean government plans to establish the third basic plan for parts and materials industry development in the second half of this year.

Source Text

Source: Newsis (July 18, 2013)

** This article was translated from the Korean.

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