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South Korea hit a historic high in exports last month, setting new records in the areas of semiconductors and steel. After previously having been dealt a blow with nearly two straight years of decline through 2016, exports have bounced back into a clear recovery this year – and the trend of increase is only getting stronger.

The Ministry of Trade, Industry and Energy (MOTIE) provisionally announced September exports on Oct. 1 as totaling US$55.13 billion clearing customs. It was the largest dollar value for exports in a month in the 61 years since export statistics were first kept in 1956. The previous high for monthly exports came in Oct. 2014 at US$51.63 billion. September exports were up 35% from the same month in 2016, continuing an eleven-month trend of increase. Cumulative exports for January to September this year totaled US$430.2 billion, up 18.5% from the same period last year.

The 2017 increase in monthly exports has been especially strong in comparison with the consecutive drop from Jan. 2015 to Oct. 2016, which had many voicing fears that South Korea would be facing its first two straight years of decline in 58 years. Since October of last year, exports have risen for 11 straight months – with double-digit growth for the last nine of them. Trade volumes through September totaled US$784.9 billion, including US$430.2 billion in exports and US$354.7 billion in imports. The number suggests South Korea could be on track to hit US$1 trillion in total trade for the first time in the three years since 2014, when it reached US$1.0981 trillion.

“September [2017] had 2.5 more operating days than last year, and advance customs procedures by companies ahead of the long Chuseok holiday appear to have influenced the rise in exports,” MOTIE concluded.

Even when the extra operating days were factored out, average daily exports were up 20.6% at US$2.35 billion – the highest daily export total since statistics were first kept. The 35% rate of increase in exports for September 2017 was also markedly higher than the -6% rate for the same month in 2016.

The number points to a much sharper rebound than a simple baseline effect would account for. Export item unit prices and supplies both rose. Unit prices were up by 15% from the same month in 2016, continuing a ten-month trend of increase. Increases were particularly stronger for semiconductors, steel, petrochemicals, and petroleum products. Export supplies were also up for a second straight month, rising by 17.4%. Supplies fell for home appliances and ships, but increased sharply for general machinery, automobiles, and textiles.

The rise was evenly distributed among items, with ten of South Korea’s top 13 export categories – including steel, semiconductors, and petrochemicals – registering double-digit rates of increase. Semiconductor exports for September totaled US$9.69 billion, setting a new record for a second straight month. Even without semiconductors, the rate of increase for exports in September stood at 29.3%. Steel exports also hit a new record high at US$4.67 billion for the month thanks to rising steel material prices and US$1.9 billion in offshore plant steel exports to Norway.

By region, exports to ASEAN countries (US$9.11 billion) and Vietnam (US$4.74 billion) were the highest ever, while the 22.3% rise in exports to India kept up a nine-month trend of double-digit increase. Exports to China were also up 23.4% from the same month in 2016, continuing an 11-month trend of increase. The September trade surplus with the US was up US$840 million from the same period last year, although the cumulative surplus since January, at US$13.61 billion, was down 23.9% from the same period in 2016.

The MOTIE predicted a “possibility that the rise in exports may begin to tail off in October amid a mixture of push factors, including increased global protectionism, decreased global liquidity due to reduced US central bank holdings, and increased exchange rate volatility due to monetary policy normalization by major countries that implemented quantitative easing.“

The September trade balance, including both exports and imports, was in surplus for a 68th straight month at US$13.75 billion.

By Cho Kye-wan, staff reporter

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