S. Korea's trade surplus widens to record high in July

(ATTN: RECASTS headline, lead; UPDATES with additional details in paras 6, 11-13) SEOUL, Aug. 1 (Yonhap) -- South Korea's trade surplus widened sharply in July from the previous month to a new record high as exports grew at a faster pace than imports, the government said Monday. The country's trade surplus reached US$7.2 billion last month, compared with a surplus of $3.3 billion in June, according to the Ministry of Knowledge Economy. The figure for July also marks a 44.4 percent spike from $5 billion in July 2010. Exports surged 27.3 percent on-year to a new monthly high of $51.4 billion last month with imports rising 24.8 percent to $44.2 billion. "With the strong economic recoveries of emerging markets, shipments of products such as steel and petrochemical and petroleum goods led the export growth," the ministry said. Shipments of petroleum products spiked 89.2 percent on-year in July with exports of steel products rising 72.5 percent. Exports of semiconductors, on the other hand, fell 14.9 percent from $4.62 billion in July 2010 to $3.93 billion on a price drop. The average price of dynamic random access memory or DRAM chips fell from $2.59 per unit in July 2010 to $0.92 last month, according to the ministry. Exports to developing countries, such as the 10 member nations of the Association of Southeast Asian Nations (ASEAN), rose 34.5 percent from the same period last year while exports to developed countries, including the United States, only inched up 4.0 percent, according to the ministry. Exports to the European Union (EU) dropped 8.7 percent from a year earlier although the Korea-EU free trade agreement was implemented at the start of last month. But shipments of key export items to the world's single largest economy continued to rapidly increase, it said. Exports of automobiles to EU countries jumped 106.7 percent on-year with shipments of petroleum products also rising 32.9 percent. Imports grew largely on increased energy consumption and high energy prices. The amount of money spent on petroleum imports reached $8.68 billion, up 67.6 percent from $5.18 billion in July 2010. The country's imports of natural gas also rose 45.5 percent on-year to $2.11 billion last month, according to the ministry. Such large increases in exports and imports seemed to contradict the ministry's earlier forecast that both would slow down from the first half of the year, when the country's exports rose 24.4 percent on-year and imports grew 26.6 percent. A ministry official said the large exports and trade surplus recorded in July will likely be a one-time occasion. "We believe the $7.2 billion surplus in July was exceptional. Basically, there were a few factors that enabled such results, such as an increase in exports of ships, prompted by advance shipments by shipbuilders ahead of the summer vacation season in August," Han Jin-hyun, director of trade-investment policies, said during a press briefing.