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(LEAD) S. Korea's exports down for 8th month in May on sagging chip demand

11:31 June 01, 2023

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SEOUL, June 1 (Yonhap) -- South Korea's exports fell for an eighth consecutive month in May due mainly to weak demand for semiconductors amid an economic slowdown, the industry ministry said Thursday.

Outbound shipments fell 15.2 percent on-year to US$52.24 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 36.2 percent on falling demand and a drop in chip prices.

Fewer working days and a high base effect were also behind the fall in exports last month, as exports hit the second-largest ever monthly figure of $61.6 billion in May last year, it added.

Exports have marked an on-year decline since October last year amid aggressive monetary tightening by major economies to bring inflation under control and an economic slowdown. It is also the first time since 2020 that exports have declined for eight months in a row.

Imports fell 14 percent on-year to $54.34 billion in May, as the country's energy imports went down 20.6 percent on-year, the ministry said. South Korea depends on imports for most of its energy needs.

Accordingly, the country suffered a trade deficit of $2.1 billion last month.

Imports have exceeded exports in South Korea since April last year on high energy prices, and it is the first time since 1997 that the country has logged a trade deficit for 15 months in a row.

But the monthly trade deficit has been reduced this year from $12.52 billion in January to $5.3 billion in February, $4.63 billion in March and further to $2.65 billion in April, the data showed.

This file photo taken May 22, 2023, shows a port in the southeastern city of Busan. (Yonhap)

Outbound shipments of semiconductors came to $7.37 billion in May, down 36.2 percent from a year earlier. The country's chip exports have logged an on-year decline since August last year.

Exports of petrochemicals dropped 26.3 percent to $3.83 billion, and those of petroleum products sank 33.2 percent to $4.36 billion last month on falling global oil prices.

Steel exports also lost 8.8 percent to $3.32 billion in May, and display items saw exports fall 7.4 percent to $1.41 billion.

Global sales of South Korean bio-health items also tumbled 27.1 percent to $1.09 billion, and those of textile and computers skidded 14.8 percent and 57.5 percent, respectively, in May.

Outbound shipments of secondary batteries logged a 4.9 percent fall to $800 million.

But car exports spiked 49.4 percent on-year to $6.2 billion last month, showing on-year growth for the past 11 months in a row, though auto parts saw exports inch down 0.7 percent to $1.94 billion.

Exports of machinery added 1.6 percent on-year to $4.47 billion, the data showed.

By nation, exports to all the country's major export destinations marked an on-year fall in May.

Exports to China, South Korea's No. 1 trading partner, tumbled 20.8 percent to $10.62 billion last month, extending the losing streak to the 12th month. The decrease came amid China's sagging demand for chips and other IT products, among other items.

But the monthly figure bounced back to over $10 billion for the first time since March, and the daily export value reached the largest figure since October last year, the ministry said.

Exports to the United States also marked a 1.5 percent fall to $9.48 billion last month due to a high base effect.

Shipments to the Association of Southeast Asian Nations (ASEAN) fell 21.2 percent to $8.42 billion in May. ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.

Exports to the European Union also fell 3 percent to $5.86 billion, and those to central and south American nations retreated 26.3 percent to $1.99 billion.

Those to Middle Eastern nations slid 2.6 percent to $1.53 billion last month, the ministry said.

"Despite ongoing difficulties in the global economic circumstances, our trade deficit has been reduced and the value of daily exports has shown signs of going up," Industry Minister Lee Chang-yang said.

"The government will push for a strong drive to prop up exports by extending support for promising items and diversifying markets and major export items," he added.


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