Korea’s exports down for 11th month in August but at slower pace

South Korea’s exports shrank last month for 11 consecutive months but signs of a recovery in demand for the country’s mainstay export item semiconductors, coupled with brisk Korean car sales overseas, have heightened expectations for a turnaround in exports in the last quarter of this year, the government said.

Exports in August were estimated at $51.87 billion, down 8.4% from a year ago, according to data released by the Ministry of Trade, Industry and Energy on Friday.

This was the 11th straight monthly on-year fall in exports, the longest losing streak since 14 consecutive losses from December 2018 to January 2020.

Imports, however, contracted more than exports by 22.8% to $51 billion largely due to lower energy prices, resulting in a trade surplus of $870 million. This was the third consecutive surplus since June.

Outbound shipments remained stagnant last month due to the weak price of semiconductors, Korea’s key export item, amid dwindling demand. Total chip exports decreased 21% on-year to $8.6 billion, falling for the 13th straight month, according to the trade ministry.

The delayed recovery in China’s economy, the biggest export destination of Asia’s fourth-largest economy, also weighed on the latter’s exports.

Korea’s shipments to China retreated 20% on-year on weak chip and intermediary goods exports.

But the export decline decelerated from July with a 25% drop despite growing concerns about the world’s second-biggest economy grappling with the property market crisis.

Korea’s exports to China grew to $10.5 billion in August from $9.9 billion in July.

The country’s overall export drop also slowed from July when shipments sank 16.5%, the largest drop since May 2020.

SIGNS OF RECOVERY

It is too early to pinpoint the month of the country’s export recovery, but the Korean government projected a turnaround in exports in the final quarter of this year on a gradual rebound in chip exports and strong overseas sales of Korean cars and vessels, Kim Wan-ki, director general of International Trade Affairs at the trade ministry, said on Friday.

Against the month previous, Korean semiconductor exports rose 15% in August, extending the on-month growth streak after bottoming out in the first quarter.

The monthly average chip exports also increased to $8 billion in the July-August period from $7.5 billion in the second quarter and $6.9 billion in the first quarter thanks to wafer cuts by major global chip makers and growing demand for premium memory chip products, such as DDR5 dynamic random access memory chips and high bandwidth memory (HBM) chips. 

Korean car shipments to overseas markets jumped 29% on-year in August, while exports of auto parts, machinery, vessels, displays and appliances also increased 6%, 8%, 35%, 4% and 12%, respectively.

Autos' biggest on-year growth in August exports is partly thanks to the brisk sales of electric vehicles and sport utility vehicles in North America and Europe.

By region, Korea’s shipments to the US and the EU added 2% and 3%, respectively, while exports to the Middle East grew 7%.

But shipments to China and ASEAN countries dropped 20% and 11%, respectively.

Petroleum and petrochemical product exports also declined 35% and 12%, respectively, while steel shipments dropped 11%.

Write to Han-Shin Park at phs@hankyung.com


Sookyung Seo edited this article.