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Exports to US reach all-time high, widen gap with China

Trade surplus continues 11-month rally on robust chip, auto sales

By Choi Ji-won

Published : May 1, 2024 - 15:35

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Shipping containers are stacked in the southeastern port city of Busan, in this file photo taken on April 1. (Yonhap) Shipping containers are stacked in the southeastern port city of Busan, in this file photo taken on April 1. (Yonhap)

South Korea's exports increased for seven straight months, jumping 13.8 percent in April on strong chip demand and record-high automobile sales.

Exports to the US, in particular, reached an all-time high, further widening the gap with China, the country's second-largest export destination.

Outbound shipments came to $56.2 billion, up 13.8 percent on-year, according to data revealed by the Ministry of Trade, Industry and Energy on Wednesday.

The data showed that imports rose by 5.4 percent to $54.7 billion, resulting in a monthly trade surplus of $1.53 billion and marking the 11th consecutive month that the country's exports have exceeded imports.

The Trade Ministry noted that rising global demand for South Korea's key export items, including semiconductors and cars, helped the country's exports.

Chip exports jumped 56.1 percent on-year to $9.96 billion, maintaining the upward trend for six straight months.

The growth was driven by the rebound in memory chip prices and growing demand in the broader IT industry due to increased investments in artificial intelligence servers, according to the ministry.

Along with semiconductors, overseas sales of the country's three other major IT products -- displays, computers and mobile communication devices -- all increased for the second month in a row, following the first instance of simultaneous growth in 24 months in March.

Car exports, which had declined over the past two months due to a slowdown in electric vehicle sales, rebounded to hit a new high. In April, auto exports reached $6.79 billion, a 10.3 percent increase on-year, surpassing the previous record of $6.53 billion set in November.

Shipments to both the US and China, Korea's top two trade partners, also increased.

Buoyed by strong auto demand, exports to the US hit a record high of $11.4 billion, up 24.3 percent from the same month last year and extending the growth streak to nine consecutive months.

China, which has traditionally been Korea's largest export destination, was surpassed by the US in December for the first time in more than 20 years. Although China reclaimed the top spot in January, it fell back to second place and has continued to lag behind the US, with the gap in export volume between the two nations widening since then.

Imports rose after 14 months of decline, with a 5.4 percent increase on-year to reach $54.73 billion in April. The ministry attributed this growth to a 14.6 percent rise in energy imports across the sector, driven by higher refinery operating rates and increased demand for gas in power generation and industrial use.

As a highly export-oriented nation, South Korea has experienced a robust recovery since last June, when its trade balance turned to a surplus after 15 consecutive months of deficit.

Building on this momentum, the cumulative trade surplus this year has reached $10.6 billion, surpassing last year's total deficit of $10.3 billion and achieving the largest surplus in five years.

The ministry projected the upward trend will continue. "We expect export growth and the trade surplus to persist into the second quarter, driven by the rising exports of IT products, like semiconductors, and continued robust performance in key sectors, such as automobiles, general machines and shipbuilding," said Trade Minister Ahn Duk-geun.