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Korea’s exports decrease 11.1 percent to $39.6 billion in February 2019-03-04

The Ministry of Trade, Industry and Energy announced on March 1 that Korea’s exports in February reached USD 39.6 billion, down 11.1 percent from the same period last year.
Imports also went down 12.6 percent to $36.5 billion, but the trade balance recorded $3.1 billion, remaining positive for 85 consecutive months.

Last month’s exports fell at a faster rate compared to January’s outbound shipments, which declined 5.9 percent year-on-year. However, average exports per working day in February were $2.1 billion, which is 7.9 percent greater than those in January ($1.9 billion).

A slowdown in exports was affected in part by a softening global economy. The International Monetary Fund has lowered global economic growth projections for 2019, and the World Trade Organization’s World Trade Outlook Indicator has also signaled slower trade growth. Other hindrances include falling semiconductor prices, fewer working days, and the Lunar New Year holiday. However, chip prices, as well as overall exports, are projected to stabilize in the second half of this year.

For Korea’s 13 major export items, ten of them experienced decreases. General machinery, steel, and automobiles, on the other hand, posted growth.

Exports of semiconductors went down 24.8 percent to $6.8 billion as memory chip prices continued to decrease. Slower smartphone sales and tech companies’ delayed investments in data centers also contributed to this drop.

Petroleum products fell 14.0 percent to $2.9 billion. Despite rising oil prices, increasing global petroleum product supply resulted in this decline. Petrochemicals similarly slowed down 14.3 percent to $3.5 billion.

Ships contracted 46.5 percent to $1.3 billion. This is mostly attributable to a decline in the world’s shipbuilding orders in 2016.

Meanwhile, the country’s seven new promising export items all expanded. They are biotech products, secondary batteries, electric cars, cosmetics, organic light-emitting diodes (OLEDs), agricultural and fisheries products, and plastics. Among them, the first four items increased at double-digit rates.

Biotech products jumped 24.5 percent to $625 million thanks to greater demand for pharmaceuticals and medical devices such as ultrasound machines and dental implants.

Secondary batteries improved 10.7 percent to $549 million mostly due to growing industries, such as electric cars and energy storage systems.

Electric cars soared 92.4 percent to $163 million as a result of technological innovation and strengthening environmental regulations across the globe.

Cosmetics also gained 21.5 percent to $466 million largely because of growing global popularity of Korean skin-care products.

By region, outbound shipments to most export destinations decreased while those to the U.S., the Commonwealth of Independent States (CIS), and India increased.

Exports to the U.S. climbed up 16.0 percent to $5.4 billion on the back of automobiles, wireless communications devices, and petroleum products.

Those to the CIS went up 20.5 percent to $957 million. This growth was led by displays, automobiles, and general machinery.

Korean goods shipped to India also advanced 4.7 percent to $1.2 billion. Strong sales of general machinery, semiconductors, and displays helped the expansion.

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