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  Korea Report - December 2022
  Author : Hwang & Co     Date : 23-01-07 19:03     Hit : 13989    
   Korea Report - December 2022.pdf (1.4M), Down : 1, 2023-01-07 19:03:11




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2022 IN NUMBERS. 1. Tough living conditions. The number of COVID-19 cases grew by 28.2 mil this year due to highly transmissible omicron subvariant. The figure was 635,253 on Jan 1st but surged to 28.7 mil at the end of this year. SKorea has been no exception to global inflation, with everything has risen except my salary becoming a popular catchphrase. Read more


CHANGES TO COME IN 2023. 1. Minimum wage increase. The minimum hourly wage will rise by KW460 from Jan 1st to KW9,620 ($7.60) an hour. Employees working eight hours, five days a week, will earn over KW2 mil a month, including KW346,000 of holiday pay. Read more


The National Assembly on 24th passed the KW638.7 tril ($497 bil) of government budget for 2023. The ruling People Power Party (PPP) and main opposition Democratic Party (DP) approved Yoon administrations first budget, 22 days after its legal deadline. The bill passed 251-4, in an assembly where DP holds majority of 169 out of 300 seats. The final package was down KW314.2 bil from government proposal of KW639.4 tril. It marks first time in three years that the budget was decreased by the parliament.


SKoreas trade volume is expected to stand at 6th in the world, the highest ranking in Korean history, according to Korea International Trade Association on 5th. SKoreas annual export this year is expected to increase by 7.1% to $690 bil. Samsung Electronics was recognized with a $120 bil Tower of Export, breaking its own record of reaching $110 bil just last year. During Jan to Sept, the export amount jumped 12.2% on-year to $524.7 bil, mainly due to three industries, semiconductors, automobiles, and petroleum products, that have been actively exporting to four markets, ASEAN, US, the EU and India. China, US, Germany, the Netherlands and Japan are the top five countries that are expected to be ranked higher than SKorea.


SKorea's exports rose 6.1% on-year to $683.9 bil in 2022 to reach an all-time high, on the back of solid global demand for major export items, including semiconductors and petro products, as well as largest-ever sales of electric vehicles and secondary cells. The performance put the country at world's sixth-largest exporter, up one notch on-year, following China, the US, Germany, the Netherlands and Japan. Imports spiked 18.9% on-year to $731.2 bil on high global energy prices, resulting in a trade deficit of $47.2 bil. Read more


SKorean battery giants, LG Energy Solutions, Samsung SDI and SK On, are expected to see a combined sales of KW50 tril ($39 bil), marking a record-breaking year amid burgeoning demand for electric vehicles overseas. LGES revenue this year is estimated to surge on-year by 41.4% to KW25.2 tril. Net profit would skyrocket 95.3% to KW1.5 tril, surpassing KW1 tril mark for the first time. Samsung SDIs revenue and net profit are estimated at KW20.1 tril and KW1.9 tril, up 48.5% and 81.1% on-year. SK On is expected to log KW6 tril in revenue, turning a profit since its split-off from SK Innovation last year. Read more


SKorea's foreign reserves came to $423.16 bil as of end Dec, up $7.06 bil on-month, as weakening dollar resulted in rise in the converted value of holdings denominated in other currencies, according to Bank of Korea. Foreign securities, such as US Treasuries, were valued at $369.69 bil, accounting for 87.4% of total foreign reserves. The value of deposits stood at $29.35 bil. SKorea was ranked world's ninth-largest holder of foreign reserves as of end of Nov.


SKorea's consumer prices grew at the fastest pace in more than two decades in 2022, as the country felt the pinch of soaring prices of raw materials and energy sources following Russia-Ukraine war. Consumer prices rose 5.1% on-year in 2022, accelerating from 2.5% gain in 2021, according to Statistics Korea on 30th. The price of utility services gained 12.6% on-year in 2022, a drastic turnaround from a 2.1% on-year decline posted in 2021. The price of agricultural, fisheries and livestock products increased 3.8% in 2022, slowing from 8.7% spike tallied a year earlier. Read more


It has been a very eventful year for SKorean shipbuilding industry which experienced global economic depression, geopolitical impact of the conflict in Ukraine, supply chain disruptions, strike risks and so on. Nevertheless, they have secured three-year order to cover this year with cherry-picking profit. They have successfully escaped from low-price contracting competition which gave them hard times for past several years. Korean shipyards have recently removed unfavorable factors like disagree on yearly wage talks and stranded assets. Against a backdrop of demands for older vessel replacement, which result from strengthening environmental regulations, moreover, it is expected that the current order boom will last for a while.


It is expected that shipowners are reluctant to make newbuilding investment in 2023 in line with shrinking demands for freight shipping. However, it is unlikely to cause burden to SKorean shipyards as they have already secured ample backlog. According to Clarksons Research, global shipbuilders have vessels worth 107.19 mil cgt (3,708 units) in their orderbook, as of end Nov. Among them, Korean shipyards' shares are 35%, 37.42 mil cgt (716 units). In terms of deliveries, in other words, they have 3.6-year order cover. Read more


Hanwha Group inked a formal contract to acquire its compatriot DSME. DSME announced on 16th that it entered into an agreement with Hanwha Group for issuing new shares equivalent to 49.3% of its stakes. Hanwha Group has become the largest shareholder by taking over new shares worth about KW2 tril ($1.53 bil). In Sept, two parties made an agreement for strategic investment attraction with the goal of achieving the fundamental management normalization of DSME. With this, KDB, DSME's former biggest shareholder, picked Hanwha Group as preferred bidder for the sale of DSME. KDB left open chances for other potential buyers to make their bids in a stalking horse offer, but no additional bid was submitted. On 6th, Hanwha Group was finally selected as the final bidder. Hanwha Group recently completed six-week due diligence on DSME.


Korean shipbuilding and steel industries are finalizing discussions on thick plate prices for 2H 2022. According to industry sources, SKorean shipbuilders have reached an agreement with steel industry players, POSCO and Hyundai Steel, on the price of thick plates. The 2H discussion, which used to conclude in Sept, took additional three months to reach an agreement this year. Although the precise price of the consultation has not been revealed, industry officials believe that the two sides are close to finalizing a deal to reduce the price by KW100,000 ($78) to a rate of KW1.1 mil per ton. Read more



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