'Aiming for a "V-shaped rebound"... Chinese export companies show vitality'

[Asia Economy Reporter Park So-yeon] As the Chinese economy has successfully achieved a 'V-shaped recovery' overcoming the shock of the novel coronavirus infection (COVID-19), exports to China by Korean companies producing intermediate materials such as chemicals and steel are also showing signs of recovery.

According to the Korea International Trade Association on the 20th, Korea's export value to China in June increased by 9.6% compared to the same period last year. This contrasts with the overall export value, which decreased by 10.9% during the same period. The rebound in exports to China was led by intermediate material companies in sectors such as chemicals, steel, and semiconductors. Looking at the major export items to China in June, exports of basic petrochemical feedstocks (70.5%), semiconductor equipment (55.3%), steel plates (54.8%), and synthetic resins (36.6%) increased significantly.

The domestic market in China, centered on electronic products, grew positively, supported by economic stimulus measures and revenge consumption following COVID-19. In particular, in the petrochemical industry, exports of general-purpose chemical products used in processing high-performance plastics increased significantly. A chemical industry official said, "Production of home appliances such as air conditioners, air purifiers, and TVs, which had been halted due to COVID-19, saw additional demand for previously unfulfilled quantities, leading to a significant increase in exports of basic materials like ABS." Exports of computers (61.0%) and soap and toothpaste (34.3%) also increased as remote work and hygiene consumption rose due to COVID-19.

The domestic steel industry is also actively responding. This is because the Chinese automobile market is showing a clear recovery trend. According to the China Association of Automobile Manufacturers, automobile production in China in June was 2.325 million units, and sales were 2.3 million units, increasing by 6.3% and 4.8% respectively compared to the previous month. POSCO completed a five-month refurbishment of the No. 3 blast furnace at the Gwangyang Steelworks and started operations this month. A POSCO official said, "The Gwangyang No. 3 blast furnace mainly produces automotive steel sheets," adding, "We expect demand for automotive steel sheets to increase again in the third quarter of this year, and we are restarting the Gwangyang No. 3 blast furnace, which has been improved in scale and performance, to match this timing." Hyundai Steel also said, "The mood in the Chinese market improved in the second quarter compared to the first quarter," and "We expect automobile production to gradually increase in the future and plan to actively respond accordingly."