South Korea’s export earnings surged to their highest so far this year in November on the back of higher earnings from semiconductors, as well as secondary batteries, automobiles, shipping vessels and petrochemicals.
November export earnings hit $55.8bn, up by 7.8pc on the year, South Korea’s trade, industry and energy ministry (Motie) said last week. Semiconductor export earnings — the country’s largest export item, according to Motie — surged by 13pc on the year to $9.5bn in November, rising on the year for the first time in 16 months. Motie expects this trend of increasing semiconductor exports to continue in the future as supply and demand conditions improve on the back of higher demand for new smartphones and AI server products.
Automotive exports climbed by 22pc, marking the 17th consecutive month of gains, as exports of high value-added vehicles such as eco-friendly cars continue to surge. Electric vehicle (EV) exports, which made up nearly 24pc of automobile exports, climbed by almost 70pc on the year and drove higher car exports.
Ship exports marked their fourth consecutive month of increase with an almost 40pc year-on-year surge, on the back of higher exports of high value-added ships such as container ships and LNG carriers.
Petrochemical earnings rose by 5.9pc in November, the first increase in 18 months, with secondary batteries increasing by 23pc, the first gain in eight months. This was because of higher export volumes owing to higher facility utilisation rates and demand, and came despite petrochemical prices falling owing to lower oil prices.
Exports to six out of South Korea’s nine key export markets rose on the year in November. South Korea exported $11.4bn to largest export market China in November, the highest amount so far this year, and edging up by 0.2pc on the year. This also marked the fourth consecutive month of exports remaining above $10bn. Exports to the US also hit an all-time high of $10.9bn, on the back of higher EV exports to the destination because of “active responses” to trade issues such as the US’ Inflation Reduction Act (IRA).
Response to battery policies
“Our companies have secured more than 50pc of future battery cell production in the US through mid- to long-term contracts with American automakers, and our battery quality and technology are advanced, so it is unlikely that our position will be shaken by this regulation,” the Korea Battery Industry Association said on 4 December, with reference to the IRA.
“[The impact of the IRA] is not expected to be large,” the association added. “There may be temporary costs incurred in the process of replacing supply lines, but if we use this as an opportunity to improve our supply chain structure, we will be able to further solidify our position in the North American market.”
“Ultimately, the regulation of foreign agencies will be an important turning point that will enhance the competitiveness of the battery industry by making our supply chain independent,” Motie’s first vice minister Jang Young-jin said. “We will inspect and actively support companies’ efforts to diversify their supply lines and secure minerals. In the mid- to long-term, we will also strive to develop batteries that use fewer core minerals.”
A next-generation battery technology development project passed preliminary testing last week, with an investment of 117.2bn won ($89.9bn), and will be carried out over 2024-28. “We plan to actively develop lithium metal batteries that do not use graphite, through public-private joint ventures,” Jang added. This is in line with South Korea’s response to China’s graphite export controls, which were implemented on 1 December.
Source : Argus
