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Korea’s June exports decrease 10.9% to $39.2 billion, show signs of improvement 2020-07-03

The Ministry of Trade, Industry and Energy announced on July 1 that Korea’s exports in June decreased 10.9 percent to USD 39.2 billion. Imports fell 11.4 percent to $35.6 billion, resulting in a trade surplus of $3.7 billion.

Although exports in June decreased year-on-year due to the continued impact of the coronavirus, major indicators have improved. While April and May exports shrank by more than 20 percent, June exports recorded a 10.9 percent decrease. The trade balance also remained positive for the second consecutive month, reaching a level similar to the previous year’s average ($3.2 billion). The export volume, which had shown a sharp drop in April and May, also recovered to a level similar to that of the previous year.

Moreover, items that showed significant downturns last month – automobiles, auto parts, petroleum products, textiles, petrochemicals – are slowly showing signs of rebound.

Exports to the largest export destination, China, turned to positive growth for the first time in six months. Exports to other major regions such as the United States, Europe, and ASEAN are also gradually improving.

By item, outbound shipments of computers soared 91.5 percent to $1.2 billion. The expansion of “untact” economic activities have resulted in increased data center and server capacities, leading to the continued rise in exports of solid state drives (SSDs). Laptop computers also enjoyed strong sales due to the widespread shift to remote work. Computer exports posted growth for the ninth consecutive month.

Bio-health products advanced 53.0 percent to $1.2 billion, improving for 10 straight months. The coronavirus outbreak has stimulated demand for contract manufacturing, and new biosimilar products by domestic pharmaceutical companies led to increased market share.

Meanwhile, shipments of general machinery saw a 6.9 percent decline to $3.9 billion due to the slowdown in major economies such as the U.S. and Japan as well as stagnant demand in front-line industries including construction.

Displays fell 15.9 percent to $1.3 billion because of a continued decline in the liquid-crystal display (LCD) shipments for televisions due to weak global TV demand and reduced domestic production.

By destination, exports to all major regions contracted except for China.

Korean goods shipped to China turned to growth for the first time in six months and went up 9.5 percent to $11.4 billion. Petrochemicals, computers, steels, and wireless communication devices gained.

Shipments to the U.S. slipped 8.3 percent to $5.7 billion, led by reduced sales of automobiles, steels, petroleum products, and wireless communication devices.

Korean exports to ASEAN dropped 10.8 percent to $6.4 billion chiefly due to declining shipments of petroleum products, textiles, general machinery, and auto parts.

Shipments to the EU lost 17.0 percent to $3.6 billion. Decreases were experienced in exports of automobiles, auto parts, general machinery, and petrochemicals.

Those to Japan saw a 17.8 percent decline to $1.9 billion as a result of lower sales of general machinery, petroleum products, steels, and auto parts.

*Short version