Korea's exports down for 11th month in August on weak chip demand

The Korea Times

The Korea Times

Finance

Wed, November 29, 2023 | 01:11

Economy

Korea's exports down for 11th month in August on weak chip demand

Posted : 2023-09-01 09:32

Updated : 2023-09-01 14:21

Shipping containers are stacked at a port in Busan, Aug. 1. Yonhap

Korea's exports fell for the 11th consecutive month in August due mainly to weak demand for semiconductors and petroleum products, but the country reported a trade surplus for the third straight month, the industry ministry said Friday.

Outbound shipments fell 8.4 percent on-year to $51.87 billion last month, according to the data compiled by the Ministry of Trade, Industry and Energy.

The decline came as exports of semiconductors, the country's key export item, sank 21 percent on falling demand and a drop in chip prices. Those of petroleum products also tumbled 35 percent on-year.

The ministry also pointed to a high base effect, as exports hit an all-time high of $56.6 billion for any August in 2022.

Exports have been on a steady decline since October last year amid aggressive monetary tightening by major economies to curb high inflation and an economic slowdown. It is the first time since 2020 that exports have declined for 11 months in a row.

But August saw a smaller on-year fall in exports compared with a 16.4 percent decline logged the previous month, possibly indicating that exports may rebound later this year.

Imports fell 22.8 percent on-year to $51 billion in August, as energy imports retreated 42 percent on-year, the ministry said. Korea depends on imports for most of its energy needs.

Accordingly, the country logged a trade surplus of $870 million in August, the third straight gain.

In June, the country reported a trade surplus for the first time in 16 months following the longest ever shortfall since 1997, which lasted from March 2022 through May 2023 as a result of high energy prices.

By destination, shipments to China, the top trading partner, fell 20 percent on-year in July amid a slowdown in the Chinese economy.

Overseas sales in the Association of Southeast Asian Nations (ASEAN) went down 11 percent on-year. ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.

But exports to Vietnam, which accounted for 51 percent of Korea's exports to the ASEAN region, grew 4 percent on-year on rising demand for machinery and display items, the ministry said.

Exports to the United States and the European Union inched up 2 percent and 3 percent, respectively, to reach a record high for any August.

Shipments to Middle Eastern nations also added 7 percent last month.

"The government takes the current situation seriously and will strive further to boost exports and maintain a trade surplus," Industry Minister Lee Chang-yang said.

The government has been pushing to diversify export items and destinations, provide exporters with trade financing and other support and actively address their difficulties in doing overseas business, according to the ministry. (Yonhap)