Korea's trade keeps booming, although with a deficit

Economy

Published: 01 Apr. 2022, 14:05 Updated: 01 Apr. 2022, 14:05

Korea's trade keeps booming, although with a deficit

Cargos loaded up on ships for export at a port in Busan on Friday. [YONHAP]

Korea’s exports hit a new high last month despite war and disrupted supply chains.

According to the Ministry of Trade, Industry and Energy on Friday, exports in March hit $63.5 billion, an 18.2 percent increase year-on-year.

It was an all-time high, surpassing December's $60.7 billion.

Since July 2021, five monthly export figures have set new records.

Exports have been growing for 17 straight months, matching the previous 17-month record stretch between November 2016 and March 2018.

For 13 straight months, monthly exports have registered double-digit on-year growth rates and exceeded $50 billion.

“Normally, exports in the first quarter are the smallest for the year,” said Moon Dong-min, Trade and Investment Deputy Minister. “Yet this year, first quarter exports amounted to $172.8 billion, which is a new record for a first quarter, and the second biggest after the fourth quarter of last year.”

The strong performance was largely attributed to semiconductors and petrochemical goods, which broke records.
Petrochemical exports benefitted from the energy price surge caused by the war in Ukraine.

Semiconductors, Korea's biggest export product, grew 38 percent in March to reach $13.1 billon.

Petrochemical exports increased 14.8 percent to reach $5.4 billion.

Exports of products made from oil including refined gasoline rose a whopping 90 percent in March to reach $5.2 billion.

Energy price increases also affected Korea’s imports, which also broke some records in March.

Last month, imports grew 28 percent to reach $63.6, which was a monthly record.

The previous record of $61.2 billion was hit last December.

Energy imports hit a record $16.2 billion last month, a 90 percent increase from $7.7 billion a year ago.

Even when compared to February, energy imports grew 30 percent. Russia didn't invade Ukraine until Feb. 24.

Due to sharp increases in imports, Korea recorded a trade deficit for the second month in a row.

March's trade deficit was $140 million.

Other export products that saw increases included steel (26.8 percent), displays (48 percent) and mobile telecommunication devices such as smartphone (44.5 percent.)

Automobile exports fell nearly 10 percent to $4 billion while ship exports tumbled 36 percent to $1.5 billion.

Automobile exports were affected by a shortage of computer chips for vehicles as well as Covid lockdowns in China.

Exports to most major markets including China and the U.S. grew year-on-year.

Exports to China increased nearly 17 percent to $15.6 billion while exports to U.S. were up nearly 20 percent to $9.6 billion. Both were record highs.

However, exports to the Commonwealth of Independent States, which include Russia and Ukraine, tumbled 38 percent to $680 million.

Exports to Ukraine fell 95 percent year-on-year.

Exports of automobiles nosedived 99.8 percent, and of machinery, another major export product, 98 percent.

Exports to Russia fell 40 percent.

Automobile exports fell 83 percent while machinery exports dropped 44.7 percent.

While exports to Ukraine and Russia fell, imports from these countries saw a sharp increase.

Imports of liquefied natural gas from Russia surged 201 percent, while imports of coal were up 144 percent.
Naphtha imported from Russia grew 150 percent.

Imports of Ukraine’s agricultural and fishery goods surged 609 percent. Imports of rare gases from Ukraine increased 150 percent year-on-year.

Exports to Europe were down 2 percent year-on-year to $6.2 billion. The decline was largely due to robust growth a year earlier.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]