South Korea’s exports fell for the 10th consecutive month in July due mainly to weak demand for semiconductors, but the country reported a trade surplus for two straight months, the industry ministry said Tuesday.
Outbound shipments fell 16.5 percent on-year to US$50.33 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 nearly 34 percent on falling demand and a drop in chip prices.
The ministry also pointed to a high base effect, the delay in the global economic turnaround and seasonal factors as reasons for the poor performance.
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 also the first time since 2020 that exports have declined for nine months in a row.
Imports fell 25.4 percent on-year to $48.71 billion in July, as energy imports retreated 47 percent on-year, the ministry said. South Korea depends on imports for most of its energy needs.
Accordingly, the country logged a trade surplus of $1.63 billion in July, the second straight gain.
In June, the country reported a trade surplus for the first time in 16 months, after it had suffered the longest ever shortfall since 1997 from March 2022 through May 2023 on high energy prices.
In detail, exports of chips dropped 33.6 percent on-year to $7.44 billion. The country’s chip sales in the global market have logged an on-year drop since August last year.
Exports of petrochemicals went down 24.5 percent to $3.5 billion, and those of petroleum products retreated 42.3 percent to $3.69 billion in July on falling prices stemming from the decline in global oil prices.
Steel exports fell 10.2 percent to $2.96 billion.
But car exports grew 15 percent on-year to $5.9 billion last month, the highest figure for any July.
Exports of machinery also grew 3.2 percent to $4.41 billion, extending its winning streak to a fourth month.
By destination, shipments to China, the top trading partner, fell 25.1 percent on-year to $9.9 billion in July.
Overseas sales in the Association of Southeast Asian Nations (ASEAN) tumbled 22.8 percent to $8.82 billion on its weak demand for semiconductors and other items.
ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.
Exports to the United States also marked an 8.1 percent fall to $9.28 billion, and those to the European Union fell 8.4 percent to $5.64 billion.
Demand from Central and South American nations decreased 6.7 percent to $1.99 billion and that from Middle Eastern nations inched down 3 percent to $1.48 billion, the ministry said.
“The government will make all-out efforts to pull off growth in exports by actively supporting advanced industries and attracting foreign investment,” Industry Minister Lee Chang-yang said.
The government set this year’s export target at $685 billion, up 0.2 percent from last year’s total, though the finance ministry earlier forecast exports would mark a 4.5 percent on-year decline in 2023.
South Korea releases its full monthly export data on the first day of every month.
