HWANG & COMPANY, LTD.

T : +82-31-702-1397 

F : +82-31-706-1390 

E : hwangnco@hwangnco.com

H : www.hwangnco.com

KOREA REPORT - JUNE 2022.

TOP ISSUES.

SKorea’s ruling People Power Party (PPP) achieved landslide victory in local elections held on 1st, as its candidates prevailed in most of major cities and provinces to add support to recently inaugurated Yoon administration. The ruling party won 12 out of 17 metropolitan mayoral and provincial gubernatorial elections, winning majority for the first time since 2006. Read more…

SKorea successfully launched it’s first domestic rocket into orbit on 21st, a landmark step that opens new era of homegrown space technology. After spending eight months on improving technical problems that caused early shutdown of third-stage rocket engine, Nuri rocket (KSLV-II), weighing 200 mt, once again flew to outer space at Korea Aerospace Research Institute in Goheung, South Jeolla Province. Three-stage rocket reached its target orbit of 700 km, making SKorea seventh country in the world with indigenous capabilities to develop and launch satellite greater than 1 ton. The success is expected to boost nation’s space ambitions to land a lunar module on the moon by 2031. Starting from 2023 to 2027, SKorea plans to carry out Nuri Acceleration Project, which will send four additional rockets to space to boost reliability of Nuri space rocket and promote private enterprises that develop satellite projectiles. 

SKorea’s high inflation, which has led to a spike in consumer prices since latter half of 2021, is weakening purchasing power of households, as they spend large portion of their monthly disposable income on daily necessities, according to Finance Ministry on 7th. Consumer prices of groceries climbed by 4.1% on-year in first quarter, prices of food services, rose by 6.1% on-year. Prices for dining out surged by 7.4% on-year in May, the highest in 24 years. Read more…

SKorea posted trade deficit of $2.47 bil in June, extending its trade deficit for third consecutive month due to high global energy prices. Exports rose 5.4% on-year to $57.73 bil on solid demand for chips and petroleum products. Imports jumped 19.4% on-year to $60.2 bil on soaring global energy prices. Exports of semiconductors grew 10.7% to $12.35 bil and petroleum products spiked 81.7% to 5.48 bil in June. Steel products also saw increase of 5.4% on-year to $3.28 bil. But auto exports fell 2.7% on-year to $3.93 bil due mainly to truckers' strike and chip shortage, and petrochemicals inched down 0.4% to $4.58 bil.

SKorea's foreign reserves stood at $438.28 bil as of end June, down $9.43 bil on-month, falling by the largest amount in 13 years, as authorities unloaded the US dollar to help stem won's sharp weakness, according to Bank of Korea. Foreign securities came to $395.27 bil, down $6.23 bil on-month, accounting for 90.2% of total foreign reserves. Value of deposits fell $2.64 bil on-month to $19.23 billion. SKorea is world's ninth-largest holder of foreign reserves.

SKorea's consumer prices soared to 6.0% on-year in June, the fastest clip in nearly 24 years, due mainly to soaring energy costs, fanning expectations of a sharp rate in July, according to Statistics Korea. It marked the sharpest inflation rate since 6.8% jump in Nov 1998. Core inflation climbed 3.9% on-year, sharpest gain since Feb 2009. Prices of daily necessities, 141 items closely related to people's daily lives, such as food, clothing and housing, spiked 7.4% on-year, highest growth since Nov 1998.

Korean Big3 have posted achievement rates of over 70% in their yearly order targets. By company, KSOE was awarded 111 newbuilds worth $13.54 bil so far this year, filling 77.6% its 2022 order goal of $17.44 bil. SHI has 33 units worth $6.3 bil, showing 72% achievement in this year's order target $8.8 bil, while DSME saw 66.6% rate by winning 26 units worth $5.93 bil. In particular, there has been a flurry of profitable orders this month. SKorean shipbuilders have finally entered into formal contracts for Qatar's proposed mega-sized LNG carrier building project. 

HHI plans to set up a new repair shipyard on the site of Subic yard in the Philippines. According to industrial sources, new facility would be located on a portion of the yard formerly operated by HJ Shipbuilding and Construction (the former HanjinHIC). HHI plans to operate the facility for repair and maintenance of vessels which HHI builds for Armed Forces of the Philippines. Read more…

While there is rising interest on methanol as shipping front spearheads a transition towards supply of environmentally friendly ship fuel, prominent shipowners are actively moving forward with plans for ordering methanol dual-fueled containerships. China's Cosco Shipping Holdings, Singapore's Eastern Pacific Shipping (EPS) and Pacific International Lines (PIL) have been trying to join the ranks of methanol-powered containership operator. Read more…

-------------------------------------------------------------------------------------------------------

ATTACHMENT: Korea Report - June 2022 (PDF FILE)

Please let us know if you have difficulty opening the file.