S. Korea: Export & Import Trends for April 2014

June 19, 2014 by Leave a Comment

Korea exported US$ 50.3 billion, with year-onyear growth of 9.0 percent and imported US$ 45.9 billion, with year-on-year growth of 5.0 percent in April 2014, recording a trade surplus of US$4.5 billion (surplus for 27 consecutive months).

trade-news The export growth rate is increasing, prompted by demand recovery in the United States and ASEAN countries, and monthly exports exceeded US$50 billion for the second time in history from October 2013.

Exports of most export items grew, and exports to the United States and ASEAN countries rapidly increased. Exports of semiconductors (price hike for DRAM and growing exports of system memory),
mobile devices (launch of Galaxy S5 and increasing demand for entry-level smartphones), ships (deliveries of value-added ships including three units of drill ships) and automotive (growing exports of new vehicles including Genesis and Soul) rapidly increased, and the items which showed poor export performance in 2013, including steel and oil products, recorded a robust turnaround.

Exports to ASEAN countries (growing exports of capital goods) and exports to the United States (rapidly growing exports of durable goods including mobile devices, automotive and home appliances) showed a double-digit growth rate. Exports to Japan also grew for two months in a row, thanks to the base effect and growing exports of mobile devices and automotive parts.

Meanwhile, from among the top five raw materials, imports of crude oil (oil price hike) and steel (growing domestic demand for steel in the automotive sector) grew, while imports of oil products and coal declined.

 
 
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S. Korea- Turkey FTA records one-year passage of effectuation with 31% trade increase

June 19, 2014 by Leave a Comment

According to the Korea Customs Service, the trade volume between S. Korea and Turkey has increased by almost 31 percent within one year after the S. Korea- Turkey FTA (Free Trade Agreement) came into effect.

The trade volume between the two nations is estimated to have increased to $6.76 billion, a volume of 30.8% up since May 1, last year, compared to the comparable previous period (estimated $5.17billion). This record outnumbers the average trade increase rate (1.7%) with all trade partners in the same period.

FTA-news The agency said the export to Turkey came to $6.06 billion, up 33.6% than last year while import from the nation reached at $0.7 billion (up 11.1%), consequently S. Korea’s trade surplus made at $5.36 billion(up 37.2% than last year).

The agency analyzed that the export growth rate (35.0%) of beneficiary items from the pact surpassed that(30.4%)of unbeneficial items from it and so the pact contributed to the nation’s trade
growth to the Turkey.

While the import of unbeneficial items by the FTA from Turkey significantly increased to $200 mil. from $60 mil in the last year, the import of beneficiary items from the partner country rather
decreased (12.3%).

The export of synthetic resins, steels, petrochemical raw materials, TV parts, textiles and clothing products, for which tariffs were eliminated upon effectuation of FTA, is founded to have
noticeably increased compared to the same period of the previous year.

The import of machinery parts (valves, bearings), transformers, and clothing also increased. Korean export companies’ usage rate of the FTA with the Turkey recorded 71.4%, a number surpassing that (70.2%) of FTA with the USA.

 
 
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FTA Negotiations between Korea and Canada Successfully Concluded after Nine Years

May 12, 2014 by Leave a Comment

The FTA negotiations between South Korea and Canada have finally concluded after nearly nine years of negotiation between the two parties. The two countries’ presidents announced the conclusion of the FTA negotiations following a summit held last month in Korea and further exchanged opinions over issues worthy of cooperation between the two nations, as well as the Northeast Asian regional situation.

A spokesperson of the Ministry of Trade Industry and Energy (MOTIE) said Canada will have to remove tariffs on 93.2% of imported Korean-made products within three years while Korea also must eliminate tariff for 86.1% of imported Canadian-made items in the same period according to the agreement.

For the FTA, in Korea, the automotive sector is expected to see the greatest benefit as export tariffs (6.1%) to Canada will be wholly removed after 24 months from the effectuation of the FTA. The current 6~7% level of tariffs in the areas of automotive components, tires, textiles, etc. would mostly be removed within three years.

However, Korean beef and pork farmers are expected to face more competition as tariff removals of Canadian beef and pork will have to be carried out in 15 years and 13 years, respectively. Korea’s president made her expectation over the FTA by saying, “We expect stronger economic cooperation between the two nations through the South Korea-Canada FTA. Now we officially ask for the sincere support from the Canadian government in the our nation’s participation of the Trans-Pacific Partnership (TPP) based on the fact that Korea’sparticipation in the pact is forecast to facilitate greater trade and investment between Korea and Canada.”
 
 
Significance and Results of the Korea-U.S. FTA

In the past two years since the implementation of the Korea-U.S. (Korus) FTA, exports to the United States and U.S. investment in South Korea have increased, stimulating the Korean economy.

Korea’s exports to the United States have surged and U.S. investment into Korea has been stimulated since the Korea-U.S. FTA took effect two years ago. The United States accounts for 22.5% ($16.2 trillion in 2013) of the global GDP (IMF). It is the world’s largest market, and Korea’s third-largest trading partner.
Since the FTA took office, both exports and imports of products that benefited under the pact have increased and U.S. investment in Korea have surged, stimulating Korea’s economy.

Korea-U.S. trade volume rose by 4.1% ($197.4B- >$205.4B) following the implementation of the KORUS FTA. In the second year of the FTA, the trade volume of the products that benefited under the pact rose by 13.0% ($41.7B->$47.1B), but the trade volume of the products that were excluded from the agreement was down by 8.6%.

Since the FTA took effect, Korea’s exports to the United States have grown faster than total exports, which have meant that the agreement has served as a sustaining pillar for exporters here. Exports of products included in the FTA grew for two consecutive years (1st year 1.6%->2nd year 5.4%), with continuous growth in automobile parts (11.5- >8.3%) and petroleum products (36.1->5.9%).

However, the growth rate in those sectors dropped sharply due to falling export prices and the extension of overseas oil refinery facilities. Exports of excluded items decreased (-3.5%) during the first year of the FTA, but went up in the second year (5.7%). Exports of wireless communication devices plunged during the first year of the FTA (-34.1%) only to go up again during the second year (31.3%), thanks largely to a boom in the LTE market.

Exports of automobiles rose (16.5->14.7%) over the two years, due to improved quality and brand awareness.

Over the two years since the FTA went into effect, imports of U.S. goods increased(10.1%), mostly in products included in the pact, which partially offset the decrease in the import of products excluded from the pact (-23.8%). Imports of items included in the pact such as prime mover and pumps (-4.4->9.7%) and agricultural chemicals and medicine & medical supplies (15.9->13.4%) were steadily increased (5.3- >4.5%), while imports of excluded items fell (-20.7->-3.7%) for two straight years due to weak imports in the semiconductor (-1.3-.-6.1%) and aircraft & parts (-16.3->-12.9%) sectors. The use ratio of the Korus FTA in exports during the second year stood at 75.7%, up from the first year.

 
 
 
 
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Korea’s Trade Surplus in ICT is on the rise thanks to Advanced . Emerging Economies’ Increase in ICT Production Exports

May 12, 2014 by Leave a Comment

Exports reached 12.84 billion (up 8.4%) while imports were recorded as USD 6.21 billion (up 13.5%), resulting in a trade surplus of USD 6.63 billion.

Korea’s ICT product exports in February 2014 were recorded as USD 12.84 billion, up by 8.4% compared to the same period in the previous year. Korea’s ICT product exports increased evenly in the advanced and emerging countries based on export restoration in the U.S., European countries and Japan, as well as export expansion to ASEAN – Latin American countries.

By region, ITC product exports to the U.S. increased to USD 1.12 billion, up by 7.9%, while those to EU countries, Japan, ASEAN countries, and Latin American countries were recorded as USD 1.34 billion (up 1.9%), USD 0.53 billion (up by 19.7%), USD 1.65 billion (up 5.4%), and USD 0.76 billion (up 8.3%), respectively.

By item, mobile phones (USD 2.05 billion, up 37.7%), semiconductors (USD 4.47 billion, up 14.6%) and D-TVs (USD 0.53 billion, up 8.6%) all continued to lead the increase in exports.

Production ExportsKorea’s ICT industry was in the black, recording a surplus of USD 6.63 billion, which served as a driving force to reach the nation’s trade surplus of USD 0.93 billion for the month. ICT product export performance and trade balance in February in recent years are shown in the figure below.

Overall imports of ICT products were recorded as USD 6.21 billion in February, up by 13.5% compared to the same period in the previous year. By item, imports of semiconductors (USD 2.59 billion, up 11.2%) and display panels (USD 0.42 billion, up 0.5%), and D-TVs (USD 0. 2 billion, up 21.7%), while imports of computers (USD 0.25 billion, down 8.7%) declined.

By region, imports from most countries such as China (including Hong Kong, USD 2.16 billion, up 15.6%), ASEAN countries (USD 1.01 billion, up 27.2%), the U.S. (USD 0.6 billion, up by 5.4%) and EU countries (USD 0.46, up by 9.7%) increased.

As well, it is expected that ICT product exports will remain strong mainly with restoration in the world ICT markets and growth of major items such as Smartphones, and semiconductors.
 

Seoul’s Export Similarity with Tokyo Touches Record Last Year

South Korea’s export similarity index(ESI) against Japan hit record last year. The ESIs were especially high for Korea’s major export items such as car and car parts, machinery and electronics. Once the weaker yen backed by the Abenomics starts to have a full impact, the export competition between the two countries would likely heat up further.

Korea’s ESI with Japan reached 0.501 last year, surpassing the 0.5 mark for the first time, said the Korea International Trade Association(KITA) recently.

The ESI quantifies the similarity of export product composition to gauge the competition among countries in foreign markets. The closer to one the reading is, the fiercer the competition is.

“A reading over 0.5 between Korea and Japan suggests at least 50 percent of the two countries’ export products are similar,” said Chang Sang-sik, a researcher at the Institute for International Trade under the KITA.

Considering the ESI with the world’s top trading country China stood at 0.377 last year, Korea’s gauge with Japan particularly stands out.

The index confirmed that even though several of Japan’s industries are losing competitiveness, the country is still Korea’s biggest competitor in the export market. By product, the ESI with Japan in auto parts, one of Korea’s top seven exports, came to a record 0.560.
 

Simplified Customs Procedures to Facilitate Direct Overseas Purchases

In order for the growing number of South Koreans seeking to purchase overseas products directly online, the Korea Customs Office is set to simplify related customs procedures.

Trading through direct purchases using special delivery services, international mail, or purchase agents stood at $1 billion, or 11 million cases, according to the KCO.

In 2011 and 2012, the figures were $470 million or 5.6 million cases and $700 million or 8 million cases, respectively, showing trading over the Internet has grown 113 percent in just two years in financial terms and 96 percent in terms of the number of transactions.

As direct purchases not only offer convenience to local customers but have the effect of bringing down prices at shops selling overseas products within the country, the organization will expand the number of items subject to tax exemption from the current six to ten. Such items which are imported for personal use and are priced at below $200 are exempted from customs tax.

Now, six items (clothing, shoes, toilet paper, kitchen utensils, printed materials, and luminaries) are exempted from customs tax but the organization plans to add four additional items of toys & dolls, electronics goods, fitness equipment, and accessories to the list within this year.

In addition to the simplification of the customs procedures, the organization is also considering relaxing requirements for a specially designated purchasing agent, which enjoys simple customs procedures and other benefits, from the current 100 million won ($93,005) in capitalization and more than 100 declaration records per month to 50 million won in capitalization and more than 50 declaration records per month.

 
 
 
 
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Korea’s Export Prices Hit the Lowest Level Since 2008

December 17, 2013 by Leave a Comment

Korea’s export and import prices all dropped for two consecutive months on account of the decline of exchange rate and the weaker raw material prices. The export prices declined to the lowest level in five years and eight months, prompting concerns over deteriorating profitability of export companies.

The export price index for October reached 91.21 (base level of 100 in 2010), down 1.9% from the prior month of this year, the lowest level since in February 2008 (89.07). When compared to the export prices index a year before, 4.6% is declined, according to the Bank of Korea (BOK).

In general, a rise in export prices has a positive impact on the profitability of companies, but a decline in export prices negatively affects companies’ profitability. An official from the BOK explained “Export prices for October declined 1.9% month-onmonth (mom) on sliding won/dollars rates.”

The won rose 1.9% from 1,087.35 per dollar in September this year to 1,066.80 in October. By product, agricultural and fishery products climbed 2.6% mom including marine products while industrial goods fell 1.9% mom including chemical and primary metal products.

 

By Kim Min-su : Here

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Samsung Mass-Produces DDR4 Modules

November 4, 2013 by Leave a Comment

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Samsung Electronics will open a new era for DRAM memory for PCs and enterprise server systems in the second half of this year. The next generation of DRAM memory has begun as South Korea-based electronics giant initiated the world’s first mass-production of ultra-thin mobile memory chips based on 20-nanometer-level technology.

Samsung Electronics recently announced that it will be mass-producing 20 nano-level 16 GB (Gigabyte) and 32GB DDR4 RAM modules for enterprise servers in next-generation data centers. The new DDR4 memory is highlighted by a 1.25-fold increase in data transmission rate and 30 percent cut in power consumption compared to the existing 20nm-class DDR3. This means the new memory will speed up a computer’s boot time. Samsung is confident that its modules support up to 2,667Mbps transfer speeds. The process of replacing DDR3 into DDR4 will begin in the second half of this year, enhancing performance and lowering power consumption.

 

By Kim Min-su : Here

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Seoul, Beijing Agree on 90% Trade Liberalization on a Temporary Basis

October 22, 2013 by Leave a Comment

South Korea and China have reached an agreement on liberalizing or lifting import tariffs on 90percent of all imports during their recent negotiations on a bilateral free trade agreement (FTA). At the seventh round of free trade negotiations in Weifang, Shandong Province in China from September 3-5, the two parties agreed to liberalize or remove import tariffs on 90 percent of all products in terms of the number of products and 85 percent of all imports in terms of their value. Woo Tae-hee, Seoul’s chief negotiator for the FTA, said, “Seoul and Beijing agreed on the modality for the FTA, wrapping up the first-phase negotiations for the FTA,” adding “the level of liberalization could be upped in the fallout of further negotiations.”
As they have tentatively agreed on the liberalization rate of 90 percent in the products sector, 1,200 products or 10 percent of the total 12,000 products subject to negotiations will fall into the ‘super-sensitive’ category immune from liberalization. Accordingly, the government will likely face growing calls from those engaging in the manufacturing industry including agro-fisheries, auto, textile and non-ferrous metal that their products should belong to the category, ahead of second round of negotiations slated for late this year, which will deal with specific products. Besides, the two countries decided to cover the issue of ‘offshore processing zone’ during the coming second-phase negotiations. Namely, they would explore a way of acknowledging products rolled out from Kaesong Industrial Complex of North Korea as South Korea made ones to export them directly to China.

 

By Kim Min-su : Here

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S. Korea’s IT Exports Rise on New Smartphone Launch

August 29, 2013 by Leave a Comment

The launch timing of new smartphones are increasingly affecting Korea’s IT exports as those exports rise in the month of new smartphone launches from Samsung Electronics or LG Electronics.

According to ministries and telecom industries, the launch timing of Korean companies’ strategic smartphones and the large volume of IT exports are well matched.

From April when Samsung Electronics began launching Galaxy S4 in 60 countries and LG Electronics began selling Optimus G Pro overseas, Korea’s IT exports rose from $14.12 billion to $15.15 billion for two months but the figure fell to $13.27 billion in June. It stood at $13.75 billion in March.

IT export growth was 10.0 percent year-on-year (yoy) in March, but it rose to 17.5 percent yoy in April
and 17.2 percent yoy in May before it fell to 2.9 percent yoy in June.

 

By Kim Min-su : Here

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SK Hynix Develops 8Gb Mobile DRAM for First Time

August 5, 2013 by Leave a Comment

SK Hynix, the world’s second largest DRAM manufacturer, recently successfully developed 8 gigabit(Gb), low power double data rate(DDR) 3 mobile DRAM. SK Hynix has become the first company to develop a 8 Gb DRAM, following Samsung Electronics, which started mass-producing 4Gb mobile DRAM in April this year.

Mobile DRAM, which is mostly embedded in smartphones and tablet PCs, is burgeoning amid rapidly growing mobile market. The development of the 8 Gb chip signals SK Hynix has challenged Samsung Electronics, the top global DRAM maker, further heating up the competition in the mobile DRAM market.

SK Hynix used the up-to-date 25 nano technology to develop the 8 Gb mobile DRAM, and plans to massproduce the chip by late this year at the earliest. The Korea-based chip maker sent prototypes to mobile phone manufacturers that employ Android operating system(OS) such as LG Electronics, Pantech, and Chinese companies.

If some of them choose SK Hynix’s 8 Gb chip, it is projected to be embedded in their smartphones due to be released early next year. Using four units of the 8Gb chip, smartphone makers can manufacture a slimmer, high-capacity smartphone with a capacity of 32 Gb, or 4 gigabytes(GB), said SK Hynix.

 

By Kim Min-su : Here

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