Exports in South Korea hit a record USD 51.4bn in July

Exports surprised to the upside in July, despite a stronger KRW and external uncertainties. Exports jumped to USD 51.4bn in July from USD 47.8bn in June, setting a new monthly record high. On a y/y basis, export growth rose sharply to 27.3% in July from 13.6% in June, much higher than market expectations of 17.1% and our forecast of 11.8%.

Exports of ships led the strength in overall exports, rising sharply to USD 6.2bn from USD 4.1bn prior. But exports in other key non-tech sectors such as steel, oil refinery products and auto parts were also strong, resulting in further growth of exports excluding ships to USD 45.2bn from USD 43.7bn prior.

Meanwhile, we saw further weakness in high-tech sectors, with y/y growth of semiconductors and LCD exports falling by 14.9% and 20.3%, respectively.

Imports were relatively stable, edging down to USD 44.2bn in July from USD 44.9bn in June. On a y/y basis, import growth moderated to 24.8% from 27.5%. Energy imports rose to USD 14.2bn from USD 13.9bn, thanks to higher commodity prices.

Consumer-goods imports also were strong, while capital-goods imports were weak. The trade surplus hit a record high in July, widening sharply to USD 7.2bn from USD 2.8bn in June, which strongly supports the KRW.