According to the latest data from South Korea's Ministry of Trade, Industry and Energy, exports in January fell by 10.3% year-on-year to 49.1 billion USD, impacted by the Lunar New Year holidays, ending a growth trend of 15 consecutive months. Simultaneously, imports declined by 6.4% to 51 billion USD, resulting in a trade deficit of 1.89 billion USD, marking the first deficit in 20 months.
Semiconductor Exports Rise Against the Trend, Automotive and Petrochemical Products Decline
Despite the overall decline in exports, the semiconductor industry showed strong performance. In January, semiconductor exports increased by 8.1% year-on-year to 10.1 billion USD, reaching the second highest record for the same period in history and maintaining levels above 10 billion USD for nine consecutive months. The Ministry attributed this to the growth in global data centers and artificial intelligence investments, which boosted demand for high-bandwidth memory (HBM) chips and high-end DDR memory.
Computer equipment exports also showed growth, increasing by 14.8% year-on-year to 800 million USD, expanding for the 13th consecutive month.
In contrast, automotive exports dropped significantly, falling by 19.6% year-on-year to 5 billion USD. The South Korean side explained that the reduced number of production days due to the Lunar New Year holidays, along with decreased demand for diesel and electric vehicles, further dragged down export performance.
The energy and chemical industries were also impacted. Due to the decline in international crude oil prices and a fire accident at a domestic refinery at the end of December, petroleum product exports fell by 29.8% year-on-year to 3.4 billion USD, and petrochemical product exports decreased by 12.8% to 3.5 billion USD.
Exports to Major Markets Decline, Pressure on Exports to the US and China
In terms of export destinations, declines were seen across major markets. Exports to China fell by 14.1% year-on-year to 9.2 billion USD, affected by weakened demand for machinery, petroleum products, and displays.
Exports to the United States decreased by 9.4% to 9.3 billion USD, primarily due to a downturn in demand for cars and machinery. Exports to ASEAN and the EU declined by 2.1% and 11.7% year-on-year, reaching 8.6 billion USD and 5 billion USD, respectively.
The Government Emphasizes Robust Export Fundamentals
In response to the decline in January's exports, South Korea's Minister of Trade, Industry and Energy, Ahn Deok-geun, stated that the shortened holidays led to a temporary contraction in exports, but the overall export momentum remains strong. He noted that the average daily export value in January increased by 7.7% year-on-year, with key export sectors and markets maintaining a growth trend.
Furthermore, Ahn Deok-geun mentioned that the South Korean government would closely monitor changes in US trade policies, especially potential new measures by the Trump administration, and pledged to support export businesses amid increasing global economic uncertainties.
