South Korea’s Exports Decrease in August for 11th Consecutive Month Due to Low Demand for Chips

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SEOUL, Sept. 1 (Yonhap) — South Korea’s exports dropped for the eleventh consecutive month in August, largely due to weak demand for semiconductors and petroleum products. However, the nation still reported a trade surplus for the third consecutive month, according to the Ministry of Trade, Industry and Energy.

Outbound shipments decreased 8.4 percent from the same period last year to $51.87 billion, the data revealed.

The slump was mainly attributed to the declining demand and prices of chips, as well as a reduction in petroleum product exports. Additionally, the high base effect of $56.6 billion for August 2022 also had an impact.

Exports have been on a steady decline since October last year, due to the monetary tightening of major economies to curb inflation and economic slowdown. It is the first time since 2020 that exports have dropped for eleven months in a row.

Nevertheless, the year-on-year decrease in exports was smaller than the 16.4 percent plunge recorded in the previous month, potentially suggesting that exports may recover later this year.

Imports went down 22.8 percent year-on-year to $51 billion, with energy imports falling 42 percent. As a result, the country reported a trade surplus of $870 million in August, the third consecutive gain.

In June, the nation reported a trade surplus for the first time in 16 months after the longest deficit since 1997, which lasted from March 2022 to May 2023 due to high energy prices.

This file photo taken Aug. 1, 2023, shows a port in the southeastern city of Busan. (Yonhap)

Chip exports plunged 21 percent year-on-year to $10.78 billion, extending their on-year losing streak for the 13th month. However, the monthly chip exports have improved this year, the ministry noted.

Petroleum product exports decreased 35.3 percent to $4.29 billion, and petrochemicals dropped 12 percent to $3.88 billion due to falling prices caused by the global oil price decline.

Steel exports decreased 11.2 percent to $2.86 billion, and secondary battery sales were down 21.3 percent to $740 million.

Car exports increased 28.7 percent year-on-year to $5.29 billion, the highest figure for any August. Machinery exports rose 7.7 percent to $4.1 billion, and display item sales climbed 4.1 percent to $1.91 billion.

Global sales of auto parts advanced 5.9 percent to $1.91 billion, and those of ships surged 35.2 percent to $1.61 billion.

Shipments to China, South Korea’s top trading partner, declined 19.9 percent to $10.5 billion in August due to the Chinese economic slowdown. Exports to the Association of Southeast Asian Nations (ASEAN) decreased 11.3 percent to $9.6 billion.

However, exports to Vietnam, which accounted for 51 percent of South Korea’s exports to the ASEAN region, grew 4 percent due to rising demand for machinery and display items.

Exports to the United States rose 2.4 percent to $8.96 billion, and those to the European Union increased 2.7 percent to $5.54 billion. Shipments to Middle Eastern nations also increased 6.7 percent to $1.42 billion.

“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 attempting 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.

graceoh@yna.co.kr
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