South Korea’s exports have fallen by more than 18 percent so far this month, government data showed Monday.
Weighing further on the country’s export front is the fast-spreading pandemic in developed economies, as well as the gloomy outlook for the semiconductor market throughout the year.
Asia’s fourth-largest economy saw the value of its exports stand at $12.21 billion this month as of last Friday, down 18.6 percent from a year earlier, according to the Korea Customs Service. The daily average during the given period came to $1.44 billion as the number of business days so far in April tallied 8.5.
The double-digit drop raised the alarm in the export-dependent economy, especially as the on-year contraction was a mere 0.2 percent in March.
The key reason for the drastic change from March to April was the escalating spread of COVID-19 in the United States and the European Union, according to the customs office.
While Korea saw its graph of confirmed cases skyrocket in late February, its export total in March remained more or less intact as the increased shipments to the US and EU countered the fall in trade with China.
The volume of outbound shipments to China shed 5.8 percent in March, but those to the US and the EU expanded 17.3 percent and 10 percent, respectively, during the same period.
But as the new coronavirus swept through Western countries and slowed down in Asia, export graphs fluctuated once again.
Korea’s exports to most of its key trade partners turned negative on-year this month, including double-digit contractions in trade with China (10.2 percent), the EU (20.1 percent), Vietnam (25.1 percent) and Latin America (51.2 percent). The country’s exports to the US slipped 3.4 percent so far this month from a year earlier.
Adding further to the trade slump was the decreased margins in the petroleum goods trade, stemming from persistent low oil prices.
Petroleum products currently account for some 7 percent of Korea’s exports. If the petrochemical sector is included, the figure is 15 percent.
The latest decision by the Organization of the Petroleum Exporting Countries to cut production has boosted global oil prices to a certain degree, but Korean refiners are still expected to log multitrillion-won operating losses for the first quarter.
Semiconductors, which account for 17 percent of the country’s exports, shed 1.5 percent on-year in outbound volume as of last Friday, displaying relatively stable sales amid the ongoing economic crisis.
But concerns are mounting that the sector is facing a long downturn along the way as developed economies around the world are reeling under the pandemic.
Market research analysis firm IC Insights recently suggested that the global chip market will be worth around $345.8 billion this year, down 4 percent from last year. The company had forecast an 8 percent expansion for this year in January and lowered the figure to a 3 percent expansion in March.
By Bae Hyunjung (firstname.lastname@example.org