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Korea’s May exports fall 23.7% to $34.9 billion 2020-06-04

The Ministry of Trade, Industry and Energy announced on June 1 that Korea’s exports in May saw a year-on-year decrease of 23.7 percent to USD 34.9 billion. Imports dropped 21.1 percent to $34.4 billion, resulting in a trade surplus of $436 million.

Exports in May fell due to the global economic slowdown led by the novel coronavirus, as well as 1.5 fewer working days compared to a year earlier.

Korea’s trade balance turned to black only after one month of deficit. Imports of capital goods, including semiconductor manufacturing equipment, showed growth (up 9.1 percent), demonstrating that Korean firms’ production activities have been normalized.

Since the recent slump in exports is a result of a global situation rather than a reflection of Korea’s structural problems, it is forecast that exports will rebound once major importers experience economic recovery.

By item, chip exports advanced 7.1 percent to $8.1 billion in spite of stagnant global sales of mobile phones. As Chinese PC producers resumed operation, semiconductor exports went up.

Exports of computers spiked 82.7 percent to $1.2 billion. Sales of solid state drives (SSDs) grew thanks to the expansion of data center and server capacities. Demand for laptops also increased as more people are working from home and attending online classes.

Bio-health products jumped 59.4 percent to $1.2 billion. Increased preference for Korean quarantine products and the coronavirus diagnostic kits in the global market as well as a steady rise in demand for domestic medical devices led to the growth.

Meanwhile, automobiles dropped 54.1 percent to $1.8 billion due to the falling global demand in major regions such as the United States and Europe.

Outbound shipments of petroleum products also dipped 69.9 percent to $1.1 billion. Export prices went down as the global demand and price for oil plunged.

By destination, exports to all major regions contracted.

Korean goods shipped to the U.S. shrank 29.3 percent to $4.6 billion, led by reduced sales of automobiles, auto parts, petroleum products, and home appliances.

China dropped 2.8 percent to $10.7 billion chiefly due to declining shipments of general machinery, textiles, displays, and petroleum products.

Shipments to ASEAN fell 30.2 percent to $5.3 billion. Decreases were experienced in exports of petroleum products, general machinery, steel products, and textiles.

Exports to the EU saw a 25.0 percent decrease to $3.3 billion as a result of lower sales of automobiles, auto parts, general machinery, and petrochemicals.

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