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KOREA REPORT - JULY, 2021.

TOPICS.

Social distancing measures in the greater Seoul area was raised to highest in the four-tier system starting 12th for two weeks, as SKorea’s daily infection tally had spiked over 1,000 in the past few days. Private gatherings of more than four people are banned. After 6 pm, gatherings are limited to two people, even for the fully vaccinated.

South and North Korea reopened direct communication lines as of 10 am on 27th, with President Moon and Kim Jong-un agreeing to restore mutual trust and improve soured inter-Korean relationship. The hotline restoration came after 13 months of collapsed diplomacy between two Koreas.

Fitch Ratings said on 22nd it has maintained SKorea's credit rating at "AA-" with a stable outlook. "Korea's rating balances robust external finances, resilient macroeconomic performance and modest fiscal headroom against geopolitical risks related to NK and medium-term structural challenges from ageing population. The strong economic recovery, underpinned by the government's effective management of the coronavirus pandemic and dynamic export sector, should continue to support Korea's credit metrics in the near term," Fitch said.

SKorea's trade surplus came to $1.76 bil in July, marking 15th consecutive month of surplus. Exports jumped 29.6% on-year to record high of $55.4 bil, extending gains to a ninth consecutive month on strong auto and chip sales. Exports in first seven months of 2021 came to $358.7 bil, also setting a fresh high. Imports climbed 38.2% to $53.6 bil.

Korea Gas signed an agreement with Qatar to purchase additional 2 mil metric tons of liquefied natural gas for 20 years starting from 2025, the Ministry of Trade, Industry and Energy said on 12th. Qatar supplies 9 mil tons of LNG to Korea annually through multiple long-term deals with Kogas.

Korean ‘Big 3’ achieved 84% of their order goal year-to-date. KSOE has been awarded 165 vessels including two offshore plants worth KW15.2 bil so far this year, accomplishing 102% of its 2021 order target ($14.9 bil). As for KSOE, its backlog was worth KW25.3 tril, up by 16.2% compared to KW21.763 tril seen at the end of 2020. SHI has been awarded 51 newbuilds comprised of 38 container vessels, seven crude oil carriers, six LNG carriers, etc, so far this year, reaching 71% of its 2021 order goal ($9.1 bil). Given the rising in ship orders and scheduled LNGC orders from Qatar project, SHI has raised its 2021 order target from $7.8 bil to $9.1 bil. Based on the original goal, SHI’s target accomplishment rate is 91%. DSME has been awarded 40 newbuilds worth $6.13 bil, accomplishing 80% of its 2021 order target ($7.7 bil).

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