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KOREA REPORT - MARCH, 2022.
TOP ISSUES.
Yoon
Suk-yeol, former chief prosecutor and political neophyte, was elected the next
leader of SKorea on 10th in one of the closest
presidential elections in the country¡¯s history. With all the votes counted,
Yoon, conservative candidate for People Power Party (PPP) garnered 48.56%,
against 47.83% of Lee Jae-myung, candidate from ruling Democratic Party of
Korea. Yoon will become first former prosecutor to be elected president and
first president without any political experience. Voter turnout for this year¡¯s presidential election reached 77.1%,
similar to the figures from previous election. Approximately 34 mil out of 44.2
mil eligible voters ultimately cast their ballots. SKorea¡¯s new president faces
myriad diplomatic challenges, from NK¡¯s nuclear threats to Russia¡¯s invasion of
Ukraine, US-China rivalry and long-running feud with Japan, diplomatic
challenges.
SKorea
retreated from its pandemic response strategy known as ¡°test, trace, treat¡± on
the premise that with omicron, COVID-19 had transformed into a more flu-like disease. Omicron¡¯s
emergence called for a new strategy ¡°attuned to the changes in the
characteristics of the virus¡± and a departure from the earlier ways of handling
the pandemic, health officials have said on 31st. Omicron¡¯s impact on fatality
trends is clear. Since omicron¡¯s dominance, it took 54 days for total confirmed
COVID-19 deaths in Korea to double, from 6,712 total deaths on Jan 28th to
13,432 total deaths on Mar 22nd.
SKorea
decided on 2nd to join International Energy Agency to release 60 mil barrels to
the market, to stabilize soaring global oil prices amid heightening crisis
between Russia and Ukraine. 31 members of the IEA held an online meeting on 1st
and agreed to inject emergency reserves to alleviate concerns over an oil
supply crunch. The coordinated drawdown is fourth in the history of the IEA,
which was created in 1974 in the aftermath of Arab nations¡¯ oil embargo against
the US. Russia is world¡¯s third-largest oil producer and the largest exporter.
It exports 5 mil barrels of crude oil per day, representing about 12% of global
trade. SKorea on 5th decided to release 4.42 mil barrels of strategic
crude reserves and the US plans to release around 30 mil.
SKorea
posted a trade deficit of $140 mil in Mar,
turnaround from trade surplus of $831 mil in Feb, as high global energy prices
pushed up country's imports to a record high. Outbound shipments stood at
$63.48 bil, up 18.2% on-year, the highest tally since 1956. Imports surged
27.9% on-year to $63.62 bil, a record monthly high. Country's major export
items grew amid global economic recovery, with sales of semiconductors and
petrochemical products reaching an all-time high of $13.12 bil and $5.42 bil,
respectively.
Hyundai
Motor (HMC) said on 8th that it¡¯s all-electric Ioniq 5 was named the UK car of
the year, for its stylish design, power efficiency and practicality as a
family car. Ioniq 5 took the throne after being awarded top prize in Best
Family Car category, beating out nine other UK car of the year category
winners. Among top 10 finalists were Fiat 500-e, Skoda Fabia, Kia Ceed, Genesis
G70 Shooting Brake, Toyota Yaris Cross, Skoda Enyaq, BMW iX, Porsche Taycan,
and Hyundai i20N.
SKorea's
consumer prices rose 4.1% on-year in Mar,
accelerating from 3.7% on-year gain in Feb, as energy prices jumped amid
Russia's invasion of Ukraine, according to Statistics Korea. Consumer inflation
exceeded 4% for the first time since Dec 2011. Core inflation advanced 2.9%
on-year. Prices of petroleum products jumped 31.2% on-year in Mar. Prices of processed
food also gained 6.4% on-year, the fastest rise since Apr 2012. Prices of
agricultural, livestock and fisheries products rose 0.4% on-year.
Korean Big 3
secured shipbuilding orders worth $13.18 bil, filing 37.5% of their total 2022
order targets ($35.14 bil). By company, KSOE was awarded 68 vessels worth $7
bil in first quarter, filing 40% of its order target ($17.4 bil). KSOE secured
new vessels worth about KW2 tril in just Mar. SHI has secured 13
vessels including four LNG carriers, nine containerships worth $2 bil during
first quarter, filing 23% of its order target ($8.8 bil). DSME secured 18
vessels worth $4.18 bil during first quarter, achieving 47% of its order target
$8.9 bil.
The current sharp
incline in nickel ore price has brought about an increase in price of ship made
of stainless steel and other alloy content. As nickel ore is essentially used
for the stainless steel tank of LNG carrier or LPG carrier, yards that build
such ships are having difficulties in giving estimates and putting off
newbuilding conversation. According to industrial sources,
price of plate have soared by as much as 30% over the past two months, while
supplies remain precarious as nickel ore price is fluctuating and very
unstable. Currently, price of nickel ore per ton has reached a $28,000/ton
level, showing a sharp increase from last year's $15,000/ton.
Average rate for a 40-foot container
from SKorea to the EU came to KW14.02 mil ($11,300) in Feb, up a whopping
261.5% on-year, on a recovery in global sea cargo, according Korea Customs
Service on 15th. The cost was up 9.5% on-month. Average freight rate for a
40-foot container from SKorea to west coast of the US also surged 188% on-year
to KW.57 mil and to east coast of America skyrocketed 239% on-year to KW14.54 mil,
with rate to China and Japan swelling 97.7% and 23.9% each. Industry watchers
voiced concern that container shipping rates could rise further in Mar in light
of increased volatility stemming from Russia's invasion of Ukraine.
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