South Korea Jan petrochemical exports fall 25%; overall shipments down 17%

Nurluqman Suratman


SINGAPORE (ICIS)–South Korea’s petrochemical exports in January fell by 25% year on year to $3.8bn, with overall shipments also contracting due to a combination of high-base effect and poor global demand.

For the whole of 2022, the country’s petrochemical exports grew by 2.1% to $51.3bn, with a marked slowdown in the last quarter of the year.

Demand weakness from its primary market China, and prolonged logistics disruptions caused by a second nationwide truckers’ strike last year (24 November – 9 December) weighed on overall trade.

In January 2023, the country’s trade deficit ballooned to a record $12.7bn, with exports down 16.6% year on year at $46.3bn and imports slipping by a more moderate pace of 2.6% to $59.0bn, data from the Ministry of Trade, Industry and Energy (MOTIE) showed.

Overall shipments to China – South Korea’s largest trade partner – slumped by 31.4% year on year in January, while those to the US fell by 6.1%.

“The exports decline is attributed to high inflation, high interest rates and other negative factors currently affecting the global economy, as well as a high-base effect from previous year’s record-breaking January exports,” MOTIE said.

January automobile exports rose 21.9% year on year to $5bn as growing demand for eco-friendly cars, sport utility vehicles and high value-added vehicles drove up unit export prices, the ministry said.

South Korea’s total semiconductor exports for the month fell 44.5% year on year to $4.8bn.

“Core semiconductor parts… and memory chips plunged in price as demand weakened and backlog piled up, heavily damaging overall chip export,” MOTIE said.

“Display exports cratered from the falling unit prices of OLED [organic light-emitting diode] products, triggered by enhanced productivity amidst the economic slowdown. Home appliances exports were impeded as high interest rates dragged down spending in developed countries,” it said.

Overall exports to the EU edged 0.2% higher and those to the Gulf Cooperation Council (GCC) nations rose 4.0%, “while those to other regions decreased, owing to global inflation, austerity measures and sluggish growth”, MOTIE said.

The weaker January trade data was accompanied by a contraction in South Korea’s factory activity for the month.

Its manufacturing purchasing managers’ index (PMI), based on a survey conducted by financial information and analytics firm S&P Global, inched up in January to 48.5 from 48.2 in December.

The PMI reading has remained below the expansion threshold of 50 for seven consecutive months.

“The deterioration in South Korean manufacturing conditions was sustained into the new year, as output, orders and exports remained in contraction territory,” said Usamah Bhatti, economist at S&P Global Market Intelligence.

“Overall new order intakes also fell sharply in January as higher interest rates in response to inflationary pressures squeezed client purchasing power in both domestic and international markets,” Bhati added.

Focus article by Nurluqman Suratman

Thumbnail image: At a container port in Busan, South Korea on 10 June 2020. (By Ryu Seung-Il/ZUMA Wire/Shutterstock)

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