Rising exports to EU, Middle East cushion overall decline

Container boxes are stacked at a port in Incheon on Sunday. [NEWS1]

Increased exports to Europe and the Middle East led by automobile and machinery pared down the on-year decline in exports in the first half of this year.

Exports to the European Union rose 5.7 percent on year to $35.9 billion in the first six months, according to the Ministry of Trade, Industry and Energy on Monday. Exports to the EU reached an all-time high for the January-June period. Outbound shipments to the Middle East spiked 14.3 percent to $9.79 billion.

Cars and machines spearheaded the jumps in these regions. Car exports surged by 56.9 percent and machines by 8.6 percent.

Strong sales in high value-added electric and hybrid vehicles gave wings to car exports. The growth in auto exports to Europe outpaced the growth elsewhere in the world. The United States came in second at 54.2 percent.

European nations investing more in infrastructure development, and Korean battery makers, such as Samsung SDI and SK on, upping their production capacity at plants in Hungary played a role in machinery export’s climb.

Shipments to the Middle East logged increases throughout the first half, except in May.

Steel and automobile enjoyed solid gains at 44.6 percent and 39.4 percent, respectively, in the first six months. Machinery exports to the arid region grew by 24.3 percent, the highest among all other key regions.

Middle Eastern states actively investing in manufacturing facilities, and robust demand for Korean compact cars and sedans added to the boost.

The of exports for both cars and machines reached the highest amount for any January-June period on the back of these figures.

“The EV market is decent in Europe, and Korean companies expanding overseas investments in [countries such as] Hungary and Poland is leading to an increase in exports,” said Jang Sang-sik, head of trend analysis at Korea International Trade Association.

Machinery exports are on the rise, following plant constructions in the Middle East, where the economy is relatively stable and oil prices are low, Jang added.

These markets cushioned Korea’s plunging exports, which shrunk by 12.3 percent on year to $307.3 billion in the first half.

Exports to China — the largest market in the world — took a 26-percent nosedive from the previous year, while overseas sales to Southeast Asia dropped 20.4 percent and Latin America by 14.6 percent. Exports to the United States remained nearly flat with a 0.3-percent hike.

The accumulated trade deficit amounted to $26.3 billion between January and June, but there are signs of an upturn.

Korea’s trade balance logged surpluses for the first time in 16 months in June. Last month’s exports decreased by the smallest rate in eight months as well.

BY JUNG JONG-HOON [sohn.dongjoo@joongang.co.kr]