Korea's Exports on the Decline
South Korea’s exports are showing signs of declining due to a decrease in semiconductor exports and a drop in exports to China, the largest export destination for South Korea.
The Korea Customs Service announced on Feb. 21 that the exports for the first 20 days of this month totaled US$23.3 billion, down 11.7 percent from a year ago. The total imports were US$24.3 billion, down 17.3 percent from a year earlier, during the same period. The average daily exports excluding holidays fell from US$2.03 billion to US$1.87 billion.
During the period, South Korea’s trade deficit added up to US$963 million. For reference, the country posted a trade deficit of US$1.5 billion from Jan. 1 to 20 and a trade surplus of US$1.3 billion in January as a whole.
South Korea recorded trade surpluses for 84 months in a row until last month. Its latest deficit, US$2.3 billion, was in December 2012. The country showed a negative year-on-year export growth in both December 2018 and January 2019. If the negative growth repeats itself this month, the country will show a three-month back-to-back export decline for the first time since the first quarter of 2015.
Semiconductor exports, which account for approximately 20 percent of South Korea’s total exports, fell 27.1 percent year on year from Jan. 1 to 20, 2019. Market research firm DRAMeXchange recently reported that the average contract price of the DDR4 8 Gb DRAM for use in PCs was US$6 last month, down 17.24 percent from a year earlier, and the price of 128 Gb NAND flash chips for use in memory cards fell 3 percent to US$4.52 during the same period.
South Korea’s petroleum products and ship exports fell 24.5 percent and 7.5 percent from Jan. 1 to 20, respectively. Its exports to China went down 13.6 percent year on year during the period, too. China accounted for 26.8 percent of South Korea’s total exports last year.