Trade Balance Turns Surplus in June After 16 Months... Lowest Export Decline This Year

June Export-Import Trends
Trade Surplus of 1.1 Billion USD
Exports at 54.24 Billion USD...6% Decrease Compared to Same Period Last Year

Last month, the trade balance turned to a surplus for the first time in 16 months. The export decline rate compared to the previous year also dropped to the lowest level this year.

On the 1st, the Ministry of Trade, Industry and Energy announced the 'June 2023 Export-Import Trends' report containing these details.

According to the report, June exports decreased by 6.0% year-on-year to $54.24 billion, imports fell by 11.7% to $53.11 billion, and the trade balance recorded a surplus of $1.13 billion.

June exports declined due to delayed recovery in the semiconductor industry and a reverse base effect from last June’s record-high export performance for the month ($57.7 billion). However, the export decline rate was the lowest so far this year: ▲January -16.4% ▲February -7.7% ▲March -13.8% ▲April -14.4% ▲May -15.2%.

By product category, exports increased in seven items including automobiles (+58.3%), general machinery (+8.1%), ships (+98.6%), and secondary batteries (+16.3%). Automobile exports have shown strong performance exceeding $6 billion since March, achieving the highest half-year export record ever. Semiconductor (-28.0%), petroleum products (-40.9%), and petrochemicals (-22.0%) exports declined in June due to price drops compared to the previous year. However, semiconductors, Korea’s largest export item, recorded the highest export value this year at $8.9 billion.

By region, June exports to the European Union (EU), the Middle East, and Latin America turned positive, supported by increased exports of automobiles and general machinery. Exports to the United States in June ($9.6 billion) remained flat due to a reverse base effect from last June’s strong export performance ($9.8 billion, the highest for June). Exports to China and ASEAN decreased in June due to falling semiconductor prices and reduced imports from China and Vietnam (the largest trading partner within ASEAN). However, exports to China remained above $10 billion for the second consecutive month in June. The export decline rate improved slightly from -21.1% in May to -19.0% in June.

June imports decreased by 11.7%, driven by reduced energy imports such as crude oil (-28.6%), gas (-0.3%), and coal (-45.5%), resulting in an overall energy import decline of -27.3%. Imports of semiconductors and steel also continued to decline.

The trade balance recorded a surplus of $1.1 billion in June, marking the first surplus in 16 months since February last year.

An official from the Ministry of Trade, Industry and Energy stated, "The government will continue this trade surplus trend and accelerate efforts to expand exports and promote energy saving and efficiency improvements to achieve a positive export turnaround in the second half of the year. We will also provide customized support for export companies, especially small and medium-sized enterprises facing difficulties, to reach the goal of 100,000 export companies."