May International Oil Prices Rebound, Export and Import Prices Both Turn Up

Bank of Korea 'May 2020 Export and Import Price Index'

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] As international oil prices, which had plummeted due to the impact of the novel coronavirus infection (COVID-19), rebounded, both export and import prices rose in May.

According to the export and import price index statistics released by the Bank of Korea on the 11th, the export price index last month was 94.61, up 0.6% from the previous month. This marks the first increase in three months compared to the previous month. However, compared to the same month last year, it fell 8.2%, continuing a decline for 12 consecutive months.

With the rebound in oil prices, coal and petroleum products (19.5%) and chemical products (0.4%) rose, causing the prices of manufactured goods to increase by 0.7%.

Looking at major items that fluctuated compared to the previous month, gasoline (59.0%), naphtha (45.0%), and benzene (23.6%) increased. On the other hand, LCDs for TVs fell by 4.8%, and flash memory (-1.3%) and computer monitors (-3.4%) also declined.

In particular, semiconductors, a major export item, had been showing continuous improvement, but in May, they showed a flat trend, indicating a pause. Kang Hwan-gu, head of the price statistics team at the Bank of Korea, said, "It seems that demand for smartphone DRAM has weakened, but whether this is a temporary phenomenon or a change in the long-term trend of semiconductor export prices needs to be observed further."

Import prices also rebounded for the first time in five months, rising 4.2% from the previous month to 98.99. Due to the rise in international oil prices, intermediate goods centered on coal and petroleum products (27.3%) increased by 1.8% compared to the previous month. Raw materials rose 14.8%, with mining products increasing by 17.7%.

Looking at major import items, propane gas (48.2%), naphtha (41.6%), and toluene (25.9%) mainly increased. However, import prices fell 12.8% compared to the same month last year, marking a decline for four consecutive months.

International oil prices, which had sharply fallen due to reduced crude oil demand and storage facility shortages caused by the COVID-19 crisis, are rebounding faster than expected. Previously, the price of Dubai crude oil in the international crude oil market rose 49.4% month-on-month from an average of $20.39 per barrel in April to $30.47 in May.

Team leader Kang evaluated, "Since oil prices had dropped sharply, there seems to be a rebound as a reaction to that. Crude oil demand is recovering mainly in China, and expectations for economic reopening in some countries such as the United States and Europe are also factors driving the rise in oil prices."

This content was produced with the assistance of AI translation services.