SEOUL, July 22 (AJP) - South Korea's producer prices plateaued in June after nine consecutive monthly increases, but broader price gauges tracking costs through the domestic supply chain surged at their fastest pace in nearly four years, signaling mounting inflationary pressure still working its way through the economy.
The producer price index stood at 130.03 in June, unchanged from May but 8.6 percent higher than a year earlier, according to data released by the Bank of Korea on Wednesday.
May's increase was revised up to 1.0 percent from a preliminary 0.8 percent, while the annual gain was raised to 8.6 percent from 8.5 percent.
The domestic supply price index, which includes imported and domestically produced goods and services supplied within Korea, rose 0.7 percent from May and 13.2 percent from a year earlier.
The annual increase was the steepest since July 2022, when the index rose 14.7 percent.
Prices rose across all stages of production, with raw materials gaining 2.1 percent from May and intermediate and final goods each advancing 0.5 percent.
Imported raw material prices jumped 45.5 percent from a year earlier, compared with increases of 31.4 percent for imported intermediate goods and 10.9 percent for imported final goods.
The widening gap suggested cost pressures remained concentrated at the upstream end of the supply chain and have yet to be fully passed on to consumers.
The BOK said the sharp rise in import prices also reflected the weaker won, changes in international oil prices during May and the time lag between import contracts and customs clearance.
The headline producer price index remained flat because manufactured goods prices fell 0.3 percent from May as declines in petroleum and chemical products offset higher prices for semiconductors and other electronics.
Coal and petroleum products fell 5.3 percent from May and chemical products declined 1.8 percent, with naphtha down 23.5 percent, jet fuel 23.4 percent and ethylene 18.9 percent. Even so, petroleum product prices remained 65.8 percent higher than a year earlier.
The total output price index, which covers exports as well as products sold domestically, rose 0.4 percent from May and 17.6 percent from a year earlier.
The annual increase was the largest since the BOK began compiling the series in 2010.
The record rise was driven overwhelmingly by exports. Export prices climbed 1.3 percent from May and 50.5 percent from a year earlier, while prices for goods sold domestically were unchanged on the month and rose 8.6 percent from a year earlier.
Prices for computers, electronic and optical equipment advanced 2.4 percent from May and 24.6 percent from a year earlier, while semiconductor prices rose 3.6 percent on the month and 145.9 percent on the year.
DRAM prices soared 476.4 percent from a year earlier, while computer memory devices gained 300.4 percent and computers and peripheral equipment rose 141.7 percent.
Price pressures extended beyond chips. Primary metal products rose 16.0 percent from a year earlier, nonferrous metal ingots and primary products climbed 36.9 percent and refined copper products increased 55.3 percent.
Service prices rose 0.2 percent from May, led by a 2.5 percent increase in financial and insurance services.
Financial and insurance service prices jumped 35.2 percent from a year earlier as stock brokerage commissions surged 143.6 percent, underscoring the retail trading boom.
Among prices affecting households and businesses more directly, pork rose 4.3 percent from May, beef prices were up 24.1 percent from a year earlier and industrial city gas climbed 10.6 percent on the month. International passenger airfares and air cargo rates, however, fell 6.5 percent and 3.4 percent, respectively.
The plateau in producer prices offers little room for comfort as upstream cost pressures have yet to fully feed through to consumer prices, while lingering tensions in the Middle East continue to pose upside risks to energy costs and inflation.
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