South Korea Jan exports likely rose for fourth month on chip recovery: Reuters poll By Reuters

By Jihoon Lee

SEOUL (Reuters) – South Korea’s exports likely rose for a fourth straight month in January on growing chip sales, with the headline figure pushed up further by calendar effects, a Reuters poll showed on Tuesday.

Exports out of Asia’s fourth-largest economy are expected to have risen 17.8% in January from a year earlier, faster than a gain of 5.0% in December, according to the median estimate of 17 economists in the survey conducted Jan. 23-29.

That would be the biggest annual increase since May 2022 for South Korean exports, which started to rise slowly from October 2023 after a year-long downturn.

South Korea is the first major economy to report trade figures each month, providing an early gauge for world demand, but its data in January and February is often distorted by timing differences in Lunar New Year holidays.

The Lunar New Year holiday period, which was in January last year, will be in February this year, resulting in more working days and a favourable comparison base for this month.

“Korean exports are expected to remain in positive territory for the fourth straight month as semiconductor exports continue to be robust,” said Chun Kyu-yeon, an economist at Hana Securities.

“Solid exports to the United States and improving shipments to China will likely lead the gradual recovery in exports,” Chun said.

In the first 20 days of this month, exports of semiconductors rose 19.7%, set to extend their gains for a third straight month.

By destination, exports to the United States rose 3.6% during the period, but those to the European Union dropped 9.4%. China-bound shipments rose 0.1%, after falling for 19 consecutive months.

While calendar effects would be a boost, there also were some downside factors, such as weakening demand in Europe and supply chain disruptions in the Red Sea, economists said.

“We believe sequential momentum remains weak as Korea’s port activities dropped sharply owing to logistics disruptions in the Red Sea area,” Barclays economists said in a note.

“This likely affects non-tech exports, which are shipped more by sea than air.”

Meanwhile, imports likely fell 7.6% in January from a year earlier, according to the survey. That would be slower than a fall of 10.8% in December and mark the smallest decline in 10 months.

In the survey, the median forecast for the monthly trade balance pointed at a surplus of $0.80 billion, just enough to keep the balance in the black for an eighth month, but much smaller than $4.46 billion in December, which was the biggest in three years.

South Korea is scheduled to report monthly trade figures for January on Thursday, Feb. 1, at 9 a.m. (0000 GMT).