Hot South Korean summer drives surge in aircon sales, power demand
Samsung Electronics' (005930.KS), opens new tab domestic home AC sales grew by 50% in the first quarter of 2025 ended March compared to the same period last year, while rival LG Electronics (066570.KS), opens new tab recorded 60% higher domestic sales in the same stretch ahead of a hotter-than-expected summer.
Sales have boomed despite government estimates that 98% of households in the country of 51 million people already have air conditioning, as the companies charm consumers by marketing improved cooling and energy efficiency, and AI-powered models.
"We expect the favorable trend in global air conditioner sales to continue, driven by growing demand for eco-friendly and high-efficiency products due to ongoing climate change," Samsung told Reuters in a statement, without giving specific sales details.
LG said it expects its air conditioner business to keep growing this year as customers replace old units with more efficient models.
Temperatures in Seoul have hit record highs this summer, reaching 37.8 degrees Celsius (100.4 Fahrenheit) in early July, before the traditional hottest month of August.
Longer, stronger heatwaves are driving AC sales globally and cooling is expected to account for a significant amount of the global growth in power demand over the next decade.
Global power demand for cooling systems is set to rise by around 1,200 terawatt hours by 2035, outstripping a projected 800 TWh increase in demand from data centres, according to the International Energy Agency (IEA).
The global air conditioner market is projected to grow at an average of 6.3% annually through 2032 to $257.2 billion, according to Renub Research. The IEA expects 50% of households to have air conditioners by 2035, compared with 36% in 2022.
This year, LG operated its air conditioner production line above full capacity, while Samsung started operating at full capacity 10 days earlier than usual, according to their websites.
South Korea's energy ministry has warned of record electricity usage straining the power grid, with peak demand potentially hitting a record 97.8 GW between 5 p.m. and 6 p.m. on weekdays in the second week of August, mainly from AC use.
The sticky nature of air-conditioning power demand - which officials say stays high once it rises - has pushed South Korea to shore up power reserves, boost imports of coal, and put underused power plants running on the fuel on standby.
Residential air conditioning made up 16% of annual power demand in South Korea last year, compared with 14% before the pandemic. Government officials are also distributing energy vouchers and relaxing tariffs to aid air conditioning use among low-income groups.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
6 minutes ago
- Reuters
Shares edge higher in Asia, Nikkei futures near record top
SYDNEY, Aug 11 (Reuters) - Major share indexes crept higher in Asia on Monday as upbeat company earnings underpinned high valuations in the tech sector, while a crucial report on U.S. inflation would likely set the course of the dollar and bonds. While Japan's stock market (.N225), opens new tab was closed for a holiday, futures pushed up to 42,380 and suggested the cash index will test its all-time high of 42,426 this week. EUROSTOXX 50 futures added 0.2%, while FTSE futures rose 0.1% and DAX futures firmed 0.2%. Trade and geopolitics loom large with a U.S. tariff deadline on China due to expire on Tuesday amid expectations it will get extended again, while President Donald Trump and Russian leader Vladimir Putin are due to meet in Alaska on Friday to discuss Ukraine. The main economic release will be U.S. consumer prices on Tuesday, with analysts expecting the impact of tariffs to help nudge the core up 0.3% to an annual pace of 3.0% and away from the Federal Reserve target of 2%. An upside surprise would challenge market wagers for a September rate cut, though analysts assume it would have to be a very high number given a downward turn in payrolls is now dominating the outlook. "The tone from the Fed has shifted as a number of officials expressed concerns about growth following the July employment report," said Bruce Kasman, chief economist at JPMorgan. "We now expect the Fed to restart its easing cycle in September," he added. "Recession risks are elevated at 40%, but we do not yet see a case for a larger than 25bp series of cuts." Markets imply around a 90% probability of a September easing, and at least one more cut by year end. Trump's pick for Fed governor, Stephen Miran, may or may not be in place in time to vote for a cut in September, while the choice of a new chair has broadened out to around 10 contenders. The prospect of lower borrowing costs has supported equities, along with a run of strong earnings. Analysts at BofA note 73% of companies had beaten on earnings, well above the 59% long run average, while 78% beat on revenue. "While mentions of 'weak demand' ticked up and tariff concerns remain, corporate sentiment and guidance are improving," they said in a note. S&P 500 futures and Nasdaq futures both edged up 0.1% on Monday to near record highs. Analysts were unsure what to make of a report in the Financial Times that tech majors Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab have agreed to give the U.S. government 15% of their revenues from chip sales in China, under an arrangement to obtain export licenses for the semiconductors. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab gained 0.3%, while South Korea (.KS11), opens new tab was flat having bounced 2.9% last week. Chinese blue chips (.CSI300), opens new tab added 0.5% after data showed consumer price inflation ticked up in July, but producer prices kept falling as the country's massive manufacturing sector exported deflation to the rest of the world. Figures on industrial output and retail sales for July are due on Friday, and forecasts are for a slight slowdown after a jump the previous month. Currencies were quiet with markets thinned by Japan's absence, with the dollar index a fraction lower at 98.066 after slipping 0.4% last week. The euro added 0.2% to $1.1670 and further away from a recent trough of $1.1392, while the dollar dipped to 147.50 yen having met resistance around 147.90. The Australian dollar eased to $0.6520 ahead of a meeting of the Reserve Bank of Australia which is widely expected to sanction a rate cut, having stunned markets in July by skipping an easing to await more inflation data. The figures turned out benign, so investors have again fully priced a quarter-point cut to 3.60%. In commodity markets, gold fell 0.6% to $3,378 an ounce after wild swings last week on reports the U.S. would slap 39% tariffs on some gold bars, which are major exports of Switzerland. Gold futures pared gains on Friday when the White House said it planned to issue an executive order clarifying the country's stance on gold bar tariffs. Oil prices slipped amid risks the talks between Trump and Putin could make progress to a ceasefire in Ukraine and possibly an eventual easing of sanctions on Russian oil exports. Brent dropped 0.6% to $66.22 a barrel, while U.S. crude eased 0.7% to $63.44 per barrel.
Reuters
6 minutes ago
- Reuters
Indian equity benchmarks inch higher led by SBI, Grasim Industries
Aug 11 (Reuters) - India's equity benchmarks inched higher on Monday, led by gains in Grasim Industries and State Bank of India on upbeat quarterly earnings, while uncertainty over U.S. tariffs on Indian goods capped gains. The Nifty 50 (.NSEI), opens new tab rose 0.3% to 24,436.8 points and the BSE Sensex (.BSESN), opens new tab gained 0.31% to 80,108.2 as of 10:30 a.m. IST. Fourteen of the 16 major sectors logged gains. Public sectors banks (.NIFTYPSU), opens new tab rose 2%, led by a 2.2% rise in State Bank of India ( opens new tab. The country's largest lender by assets posted a 12.5% year-on-year profit rise, driven by stronger non-lending income. Grasim Industries ( opens new tab jumped 2.2% after reporting better-than-expected earnings, with Jefferies and Morgan Stanley raising price targets citing strength in its chemicals business. The broader, small-caps (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab gained 0.2% and 0.4%, respectively. The Nifty and Sensex (.BSESN), opens new tab shed nearly 1% last week, posting their longest weekly losing streak in five years, as U.S. tariffs and muted earnings weighed. U.S. President Donald Trump imposed a 50% tariff on goods from India, half of which has already come into effect, while the additional 25%, a punitive tariff for buying Russian oil, will be effective from August 28. Markets are eyeing Trump's August 15 meeting in Alaska with Russian President Vladimir Putin, aimed at negotiating an end to the Ukraine war. "Momentum is still skewed to the downside", said Santosh Meena, head of research at Swastika Investmart, referring to the uncertainty over the U.S. trade negotiations. "But the recent slide could trigger a technical rebound, though trade updates will ultimately call the shots." Among individual stocks, Voltas ( opens new tab fell 7% after missing June quarter profit estimates as early monsoons hit demand for residential cooling products. Travel-related services provider Yatra Online ( opens new tab surged 19.5% after posting a four-fold year-on-year jump in quarterly profit.
The Independent
35 minutes ago
- The Independent
Asian shares advance ahead of Trump's deadline for imposing higher tariffs on Chinese goods
Shares advanced in Asia on Monday, a day ahead of U.S. President Donald Trump's deadline for imposing higher tariffs on goods imported from China. Markets in Japan and Thailand were closed for holidays. The Hang Seng in Hong Kong edged 0.2% higher to 24,908.37, while the Shanghai Composite index gained 0.5% to 3,653.50. Triple digit tariffs imposed by Trump and Beijing were paused for 90 days in May to allow time for talks. Tuesday is the deadline for extending that truce. The last round of negotiations, held last month in Stockholm, ended without a clear word from Trump on whether the deadline would be extended for another 90 days. Elsewhere in Asia, Australia's S&P/ASX 200 rose 0.3% to 8,831.40, while the Kospi in South Korea was nearly unchanged, at 3,210.76. On Friday, the S&P 500 rose 0.8% to 6,389.45, just shy of its record high. The Dow Jones Industrial Average added 0.5% to 44,175.61, and the Nasdaq rose 1% to finish at 21,450.02. Technology companies, with their hefty stock values, did much of the heavy lifting for the market. Nvidia rose 1.1% and Apple gained 4.2%. Gilead Sciences jumped 8.3% for one of the market's biggest gains after reporting financial results that easily beat analysts' forecasts, while also raising its earnings forecast for the year. Expedia Group rose 4.1% after also reporting encouraging financial results. They are among the final big batch of companies within the S&P 500 to report mostly strong financial results for the second quarter. Still, many have warned that current tariffs could cut into their profits. Elsewhere in the market, entertainment giant Paramount Skydance slid 10.5% a day after the company was created by the closing of an $8 billion merger of Skydance and Paramount. Shares in rival Warner Bros. Discovery sank 8%. Investors will get more insight this week on U.S. inflation at both the consumer and wholesale levels and on retail sales. Trump's trade war and its potential impact on the U.S. economy and on the Federal Reserve's interest rate policy are a focus after the U.S. began imposing higher import taxes on dozens of countries last Thursday. The Fed's last decision to hold interest rates steady included two votes to lower interest rates. Its next meeting is in September, and Wall Street is overwhelmingly betting that the central bank will cut interest rates by a quarter of a percentage point after signals have pointed to a weaking of the economy. Both are key concerns for the Fed, which has been trying to cool inflation down to its target rate of 2% while also fulfilling its 'full employment' mandate. Lower interest rates can give the economy and investment prices a boost, though the downside is that they can also push inflation higher. Concerns about inflation reheating could be overshadowed by worries about a weakening employment market. In other dealings early Monday, U.S. benchmark crude oil shed 38 cents to $63.50 per barrel. Brent crude, the international standard, declined 31 cents to $66.28 per barrel. The U.S. dollar slipped to 147.46 Japanese yen from 147.62 yen. The euro rose to $1.1673 from $1.1650.
