18.5% Drop in Export
The Ministry of Trade, Industry & Energy announced on February 1 that Korea’s exports and imports on a customs clearance basis are estimated to have decreased 18.5% and 20.1% from a year ago last month to US$36.7 billion and US$31.4 billion, respectively. Korea is expected to have posted a trade surplus for 48 months in a row.
According to the ministry, the monthly exports showed the steepest decline in no less than 77 months since August 2009, when the rate of decrease had amounted to 20.9%. For reference, the amount was as large as US$45.1 billion in January 2015 and US$42.5 billion in December last year.
The monthly export volume decreased 5.3% in January this year after having edged up by 0.9% in the previous month. The unit prices of the exported goods including petrochemical products, semiconductor chips, steel, petroleum-based products and flat panel display devices continued to fall for at least a year due to supply gluts and sharp declines in oil prices.
Specifically, the exports of petroleum-based and petrochemical products shrunk by 35.6% (US$1 billion) and 18.8% (US$600 million), respectively. The exports of wireless communications equipment fell as well with the focus of the market shifting toward moderately-priced mobile phones and customers waiting for new products to be released in March. The unit price of exported steel decreased from US$979 to US$727 per ton between January 2015 and January 2016 while that of DRAMs for PCs went down from US$3.59 to US$1.89 and that of 32-inch LCD panels dropped from US$95 to US$55. The exports of ships and offshore plants declined by US$1.4 billion, too.
By region, Korea’s exports to EU member countries increased by 7.3% year on year whereas those to China, the United States and the Middle East each dropped by 21.5%, 9.2% and 31.1%. The reasons include the slowdown of the Chinese economy, low international oil prices and a drop in export unit price attributable to the strong dollar.
In the meantime, Korea’s imports of raw materials, capital goods and consumer goods decreased 26.6%, 10.0% and 3.8% in the previous month. The plunge in exports is expected to continue for a while as the values of the Japanese yen and Chinese yuan dropping faster than that of the Korean currency these days are making things worse and worse for the country.