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Import prices fell for a second straight month last month on declining global oil prices, while export prices rose for the 11th consecutive month as semiconductor demand pushed prices higher.
According to the "May Export and Import Price Index" released by the Bank of Korea on the 16th, last month's import price index (won-based provisional figure, 2020=100) stood at 168.05, down 0.3% from the previous month. After surging 18% in March on a spike in oil prices triggered by the Middle East conflict, the index has now declined for two consecutive months following April's drop of 2.3%.
The decline was largely driven by lower prices for mining products and petroleum products as global oil prices fell last month. The price of Dubai crude dropped 2.4% from an average of $105.70 per barrel in April to $103.15 in May.
However, the year-on-year increase reached 24.8%, a wider gain than the previous month's 20.5%, suggesting price pressures will persist.
Among specific items, computer memory devices (5.6%) rose, while butadiene (-27.9%), diesel (-19.2%), and naphtha (-7.5%) saw large declines. Crude oil also fell 1.9%.
Lee Mun-hee, head of the Bank of Korea's price statistics team, explained, "Upward pressure on June import prices is expected to ease as the U.S. and Iran agreed to end hostilities."
Last month's export price index came in at 188.58, up 0.3% from the previous month, marking the 11th consecutive monthly increase. It rose 46.9% from a year earlier, the highest gain in 28 years since March 1998 (57.1%).
Analysts attribute the rise in export prices to continued increases in memory semiconductor prices amid growing artificial intelligence (AI) investment demand. Among specific items, flash memory (19.5%) and DRAM (7.6%) posted large gains.
Lee said, "A situation in which supply is insufficient relative to demand continues, centered on memory semiconductors," adding, "This supply-demand imbalance is expected to influence the rise in export prices for the time being."
