By Kwanwoo Jun
South Korea's export growth accelerated in March, offering some relief for the trade-reliant economy as it faces mounting risks from the Middle East conflict.
The trade surplus reached a monthly record on strong demand for semiconductor shipments, a key growth engine through last year's tariff-related trade turbulence.
However, exports of naphtha--a critical feedstock for the petrochemical industry--declined sharply, highlighting the impact of energy and shipping disruptions in the Middle East. South Korea last week imposed temporary export curbs on naphtha because of a supply crunch as shipments through the Strait of Hormuz have stalled since late February.
Overall, exports from Asia's fourth-largest economy rose 48.3% in March compared with the same period a year earlier to $86.13 billion, according to preliminary data released Wednesday by the Ministry of Trade, Industry and Energy. That followed a revised 28.7% increase in February.
The March result beat the median forecast for a 42.9% increase compiled in a Wall Street Journal survey.
Imports rose 13.2% from a year earlier to $60.40 billion, resulting in a record surplus of $25.74 billion. The country posted a revised $15.38 billion surplus in February.
Higher chip prices, along with one additional working day in the month compared with a year earlier, were key drivers of March's strong trade growth.
Home to leading memory-chip makers like Samsung Electronics and SK Hynix, South Korea has continued to post solid chip-driven export growth amid surging memory demand tied to artificial-intelligence infrastructure investments globally.
Semiconductor shipments--accounting for about a quarter of the country's total exports--more than doubled from a year earlier to $32.83 billion in March. That marked the first time the result topped $30 billion, reflecting continued demand for chips driven by the ongoing AI boom.
That provides some support for South Korea's outlook, which has been clouded by the deepening impact of the war in the oil-rich Middle East.
The country is a major energy importer, relying heavily on oil and gas from the Middle East. Supplies of other commodities critical to Korea's core industries, such as helium for chipmaking, are also raising concerns.
The government earlier this week proposed a roughly $17 billion supplementary budget to help cushion against energy shocks and support growth.
Still, some analysts say that strong demand for the country's AI-related goods could help offset any hit to growth.
March data showed that shipments of autos and petrochemicals gained 2.2% and 5.8%, respectively, from a year earlier, despite logistics challenges and higher raw-material costs.
Exports to the U.S. and China jumped 47.1% and 64.2%, respectively, from a year earlier, in March, signaling demand in the two major markets remains intact for now.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
03-31-26 2136ET
