South Korea Exports Highest in 6 Years

Higher memory chip and steel product sales helped South Korea’s exports surge 35% year-on-year to a record $55.1 billion in September, notching a ninth consecutive month of double-digit growth and the longest stretch of expansion since 2011.

While normalizing global demand boosted exports, South Korea’s trade minister raised concerns that export growth could slow in the fourth quarter due to a deterioration in trade relations, Reuters reported.

“From the fourth quarter, exports growth may slow down on worsening global commercial relations and fewer number of working days, which merits close monitoring of the situation,” trade minister Paik Un-gyu said in a statement.

Policymakers in Seoul are in talks with Washington on renegotiating the Korea-US Free Trade Agreement, after President Donald Trump told Reuters on April 28 that he will either renegotiate or terminate what he called a “horrible” deal.

Meantime, imports jumped 21.7% to $41.4 billion in September, resulting in a trade surplus of $13.8 billion, government data showed on Sunday.

September exports outperformed a 21.6% expansion seen in a Reuters survey, pointing to a strengthening momentum in Asia’s fourth largest economy.

“Sales to both advanced and emerging economies rose on global economic recovery, as 10 of the nation’s 13 major exporting items soared,” the nation’s trade ministry said in a statement.

The increase was especially driven by growth in shipments of memory chips and steel products, which surged 70% and 107.2% respectively from a year earlier, the statement showed.

The trade ministry expects exports to jump 10% this year, although uncertainties related to geopolitical tensions over North Korea and US protectionist measures cast a shadow over the outlook.

In September, shipments to the US jumped 28.9%, as demand for South Korean memory chips, cars and petrochemical products remained robust despite the trade review talks. Exports to China gained for an 11th month and expanded 23.4% on-year, marking the longest run of growth since 2014.

Imports grew for an 11th straight month in September, as South Korean manufacturers imported more oil and intermediary goods needed to produce memory chips.

Imports of products needed to produce memory chips clipped a 211.9% expansion in September, while imports of crude oil gained 17.8% on-year, according to the government.