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South Korea export keeps falling for 12 months

Christian Fernsby ▼ | December 1, 2019
South Korea’s export kept falling for 12 straight months through last month.
South Korea port with containers
South Korean economy   Export amounted to 44.1 billion U.S. dollars
Export, which takes up about half of the export-driven economy, amounted to 44.1 billion U.S. dollars in November, down 14.3 percent from the same month of last year, according to the Ministry of Trade, Industry and Energy.

Topics: South Korea export

The downward trend lasted since December last year, posting a double-digit decline for the sixth consecutive month.

Import diminished 13.0 percent over the year to 40.73 billion dollars last month, sending the trade surplus to 3.37 billion dollars. The trade balance stayed in black for 94 straight months since February 2012.

The continued fall in export came as external uncertainties, such as the global trade dispute and the weakening of global trade, remained amid the delayed recovery in export prices for semiconductor, petrochemical and oil product, the ministry said.

The ministry noted that Japan’s export curbs had a limited impact on the South Korean export yet, forecasting that the South Korean export would rebound in the first quarter of next year on the expected easing of the global trade spat and the recovery in export prices for chip and oil product.

Japan tightened control in July over its export to South Korea of three materials, vital to produce memory chip and display panel that are the mainstay of the South Korean export.

In August, Japan dropped South Korea off its whitelist of trusted trading partners that are given preferential export procedure. In response, Seoul removed Tokyo from its whitelist of trusted export partners.

South Korea’s export to Japan contracted 10.9 percent in November from a year earlier, while South Korea’s import from Japan dived 18.5 percent in the month.

During the July-October period, South Korea’s export to Japan dipped 7.0 percent from a year earlier, while Japan’s export to South Korea tumbled 14.0 percent in the cited period.

South Korea’s chip export plunged 30.8 percent on the delayed recovery of DRAM chip price that offset an increased demand for memory chips used for smartphones and an expanded investment in data centers.

Petrochemical shipment reduced 19.0 percent amid the global supply glut, and oil product export fell 11.9 percent on the still low price for crude oil.

Ship export plunged 62.1 percent due to a one-off factor, while those for automobile, general machinery, steel and auto parts diminished in single digit amid the global economic slowdown.

Display panel shipment dropped in double figures owing to lower demand and price for liquid crystal display (LCD) panels, and export of telecommunication devices such as smartphone lost 2.9 percent amid the saturation of the mobile phone market.

Export to China, South Korea’s biggest trading partner, declined in double digits in November from a year ago, and those to the United States and the European Union (EU) slipped 8.3 percent and 21.9 percent each.

Shipment to the Association of Southeast Asian Nations (ASEAN) tumbled 19.5 percent on weak demand for chip, oil product, display panel and general machinery, with export to India skidding 15.7 percent last month.

The Seoul ministry said that in terms of value, exports of chip, petrochemical, oil product and automobile declined last month, but it noted that their export volume increased in the month, indicating a positive signal for next year’s export recovery.

During the January-November period, the export volume added 0.3 percent compared with the same period of last year.