Korea's drop in exports eases in Sept. on chip sales recovery

A port in the southeastern city of Busan is seen in this July 2 file photo. Yonhap

Korea's exports fell for the 12th consecutive month in September but logged the smallest year-on-year decline so far this year, as global demand for semiconductors coninues to recover, the industry ministry said Sunday.

Outbound shipments fell 4.4 percent to $54.66 billion last month, according to data compiled by the Ministry of Trade, Industry and Energy.

Exports have marked a year-on-year drop since October last year amid aggressive monetary tightening by the United States and other major economies to bring inflation under control, and a global economic slowdown. This is the first time since 2020 that exports have declined for 12 months in a row.

But September saw the smallest year-on-year fall, raising hopes for an upturn in the coming months.

The country's outbound shipments fell 8.3 percent in August following a 16.2 percent decline the previous month. In the first quarter, exports fell 12.7 percent and the figure for the second quarter stood at 16.2 percent.

Despite the fall in exports, the country logged a trade surplus of $3.7 billion in September, the largest volume in two years and the fourth straight gain, as imports marked a sharper decline.

Imports fell 16.5 percent year-on-year to $50.96 billion last month, as energy imports retreated 36 percent on-year, the ministry said. Korea depends on imports for most of its energy needs.

In June, the country reported a trade surplus for the first time in 16 months following the longest ever shortfall since 1997, which lasted from March 2022 through May 2023 as a result of high energy prices.

By sector, exports of semiconductors fell for the 14th month in a row, dropping 13.6 percent in September.

But global chip sales have shown signs of recovery in recent months, and September saw the highest monthly export value of $9.9 billion so far this year, according to the ministry.

Exports of petroleum products and petrochemicals also lost 7 percent and 6 percent, respectively, in September on falling prices.

Car exports, however, jumped 10 percent on-year last month, and global sales of machinery and ships advanced 10 percent and 15 percent, respectively.

Steel products and display items also enjoyed export growth of 7 percent and 4 percent, respectively, last month.

Finance Minister Choo Kyung-ho, center, visits a production line of SK hynix Inc. in Icheon, 58 kilometers south of Seoul, in this Sept. 27 file photo released by his office. Yonhap

Exports of auto parts, however, lost 3.5 percent to $1.94 billion, and those in the biohealth sector and sales of secondary batteries dwindled 15 percent and 16.3 percent, respectively.

By destination, shipments to China, the top trading partner, fell 17.6 percent to $11 billion in September amid a slowdown in the Chinese economy, though the export value reached the largest amount this year.

Sales in the Association of Southeast Asian Nations (ASEAN) were down 8 percent to $9.41 billion. ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.

In contrast, exports to the United States grew 8.5 percent to $10.04 billion, and shipments to the European Union rose 6.5 percent to $5.76 billion.

Exports to South American nations surged 18.2 percent to $2.4 billion, while those to the Middle East fell 2.2 percent to $1.38 billion.

"Exports have shown signs of improvement and could rebound, though we are facing unfavorable external conditions, such as high interest rates, an economic slowdown in China and supply chain issues," Industry Minister Bang Moon-kyu said.

"The government will prioritize export growth and extend all available support," he added.

Korea releases its full monthly export data on the first day of every month. (Yonhap)