S Korea swings to c/a surplus in Feb, petrochemicals rebound

29 March 2012 05:50  [Source: ICIS news]

By Samuel Wong and Nurluqman Suratman

South Korea’s overall exports rose in FebruarySINGAPORE (ICIS)--South Korea swung to a current account surplus of $640m (€480) in February this year, as key exports – including petrochemicals – grew amid higher shipments to the eurozone, the country’s central bank said on Thursday.

This compares with a revised deficit of $970m in January this year, according to the Bank of Korea (BOK).

However, the February 2012 current account surplus was a 43.4% drop from the $1.13bn surplus seen a year earlier, according to the central bank.

The current account measures an economy’s trade in goods, services, tourism and investment with the rest of the world.

South Korea’s overall exports rose by 22.7% year on year to $47.2bn in the first 20 days of February, buoyed by the surge in outbound shipments of automobiles and steel which rose 60.2% and 44% respectively, according to data from the Ministry of Knowledge Economy (MKE).

Outbound shipments to the EU rose by 30.4% year on year in the first twenty days of February, compared with a 39.7% drop in same period a month earlier, it said.

South Korea’s total imports rose by 23.6% year on year to $45bn in the first twenty days of February, resulting in a trade balance of $2.2bn, data from the MKE showed.

This compares with a trade deficit of $2bn in January this year and a surplus of $2.1bn in February 2011, according to the MKE.

South Korea’s petrochemical exports rose by 8.9% year on year to $3.8bn in the first 20 days of February, while overseas shipments of petroleum products surged by 41.9% to $4.5bn, it said.

This compares with the 3% year-on-year fall in outbound petrochemical shipments in the first 20 days of January on the back of the reduction of working days because of the Chinese Lunar New Year holiday as well as weaker demand from the eurozone.

Despite the rebound in petrochemical exports in February, petrochemical exports are expected to show slower growth in the months ahead amid an expected slowdown in demand from primary export destination China, analysts said.

“South Korea’s petrochemical export sector is likely to slow down for the time being as we expect the Chinese market to maintain a lower growth rate for at least the next two months,” said Lee Sung-Kwon, senior vice president and chief economist at Seoul-based Shinhan Investment.

Earlier in March, Premier Wen Jiabao said the Chinese government expects its economy to grow at a lower rate of 7.5% from 8% previously.

On a volume basis, the country’s exports of most major petrochemical products showed an increase in February, according to data from the Korea International Trade Association (KITA).

On a year-on-year basis, South Korea’s outbound shipments of propylene more than doubled to 96,627 tonnes, while exports of ethylene grew by 39.9%. (please see table below)

For aromatics, exports of benzene increased by 15%, while shipments of toluene grew by 32.6% year on year to 104,299 tonnes, the data showed.

Paraxylene (PX) exports surged by 85% compared to the same period the prior year, it showed.

South Korea’s current account is expected to deteriorate in March with the trade balance likely to be negatively affected by a $10 increase in imported crude oil prices, Singapore-based DBS Group Research said in a note.

“The customs statistics for the first 20 days of March have reported a trade deficit of $2.5bn, although a surplus is expected for the whole month of March based on both the consensus and official forecasts,” it added.

EXPORTS (in metric tonnes)



Source: KITA

PRODUCT

February  '12

February '11

YoY Difference

% Change YoY

Ethylene

59,431

42,504

16,927.00

39.82

Benzene

128,288

111,521

16,767.00

15.03

Polypropylene

74,096

53,848

20,248.00

37.60

Polyethylene

98,719

81,946

16,773.00

20.47

LLDPE

37,478

36,328

1,150.00

3.17

LDPE

28,485

16,995

11,490.00

67.61

HDPE

98,719

81,946

16,773.00

20.47

Toluene

104,299

78,663

25,636.00

32.59

Propylene

96,627

39,951

56,676.00

141.86

Butadiene Rubber

28,677

24,892

3,785.00

15.21

Buta-1,3-diene and isoprene

24,547

24,708

161.00

0.65

Styrene

77,065

120,393

43,328.00

35.99

Paraxylene

185,530

100,286

85,244.00

85.00

PET

72,001

59,635

12,366.00

20.74

Mixed Xylene Isomers

31,035

54,241

23,206.00

42.78

PTA

314,155

277,472

36,683.00

13.22

MMA

5,286

2,369

2,917.00

123.13

PMMA

11,519

6,616

4,903.00

74.11

Orthoxylene

7,755

4,901

2,854.00

58.23

Expansible polystyrene

15,462

10,785

4,677.00

43.37

Acrylonitrile

18,808

13,817

4,991.00

36.12

Polycarbonate

34,807

26,125

8,682.00

33.23

Ethyl Acetate

229

1,517

1,288.00

84.90

Vinyl Acetate Monomer

4,612

8,187

3,575.00

43.67

Paraffin Wax (slack wax and scale wax)

835

764

71.00

9.29

P-wax with less than 0.75%

126

235

109.00

46.38

PVC (not mixed with other substances)

62,156

44,354

17,802.00

40.14

PVC (non-plasticised)

192

105

87.00

82.86

PVC (plasticised)

2,312

1,688

624.00

36.97

($1 = €0.75)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections


By: Nurluqman Suratman



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