Everything Must Go

The container port of Busan, Korea's busiest export port and the world's 5th largest as of 2012.
The container port of Busan, Korea's busiest export port and the world's 5th largest as of 2012.

 

Amid a flurry of unfavorable factors such as America’s tapering of quantitative and the Ukraine situation, Korean exports are showing resilience. This export boom has been led by IT product exports such as semiconductors, smartphones, and other wireless mobile devices.

According to March import/export trends compiled by the Ministry of Trade, Industry and Energy on April 1, March exports were the second highest in history, with US$49.76 billion, 5.2 percent higher year-on-year.

The highest monthly exports were in October 2013, with US$50.48 billion.

March import was US$45.57 billion, up 3.6 percent. Thus, March trade surplus was US$4.19 billion, showing a surplus for 26 consecutive months.

Regarding the export status in the first quarter, the export increase rate rose from January’s -0.2 percent to February’s 1.5 percent, and then March’s 5.2 percent, showing a marked upward trend.

The total export for the first quarter edged up 2.2 percent year-on-year to US$138.34 billion. The first quarter’s trade surplus is US$5.904 billion.

The recent export boom is attributable to IT product export such as semiconductors, wireless communication devices, and electronics, a big increase in flagship items such as cars, steel, and shipbuilding, and bullish exports to advanced markets such as the EU.

Semiconductors were solidified as the number one export item (around US$14.3 billion) in the first quarter, on the heels of retaking the top position in three years last year, thanks to the increase in the unit price. Last year, semiconductors took up 10.2 percent (about US$57.1 billion) of total exports, beating petroleum products (about US$14.3 billion).

This year’s semiconductor export increase rate showed two digits ever month, with 13.3 percent in January, 14.8 percent in February, and 14.1 percent in March.

The items with the biggest export increase rate were wireless communication devices. They posted 9.5 percent increase in January, 30.6 percent in February, an 32.1 percent in March. The first quarter’s export in wireless communication devices was about US$7.3 billion, 23.5 percent up year-on-year.

Exports in home appliances (US$3.5 billion) in the period also went up 6.1 percent year-on-year.

Also joining the happy group were automobiles (6.1 percent), steel (3.6 percent), and shipbuilding (2.2 percent). However, export flagship items showed a setback in the first quarter including petroleum products (-7.2 percent), petrochemicals (-4.5 percent), and LCD (-12.7 percent).

By region, exports to industrialized markets such as Europe and America went up. EU exports showed a two-digit increase for three months in a row, with 23.3 percent in January, 10.6 percent in February, and 15.2 percent in March. Moreover, exports to the US, which temporarily curbed during January and February due to the cold wave, jumped 17.0 percent, attributable to favorable exports of consumer goods such as cars, wireless communication devices, and machines. As well, exports to Japan in March turned positive (1.1 percent) for the first time since January on the back of increased exports in steel and general machines.

Meanwhile, the Ministry of Industry expected this year’s exports will break the record by posting US$595.5 billion, up 6.4 percent year-on-year, with a trade surplus of US$33.5 billion.

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