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Korea’s export decline eases in July, exports down 7% to $42.8 billion 2020-08-04

The Ministry of Trade, Industry and Energy announced on August 1 that Korea’s exports in July decreased 7.0 percent to USD 42.8 billion. Imports fell 11.9 percent to $38.6 billion, resulting in a trade surplus of $4.3 billion.

The July exports recorded the first single-digit decline since the COVID-19 pandemic had a full-fledged impact on exports in April. Also, the export value hit $40 billion in four months, and the trade balance remained positive for the third consecutive month since it turned to black in May.

Moreover, six out of 15 major items turned to growth. Exports to China, the United States, and the EU, which account for half of Korea’s exports, have improved significantly in July.

By item, chip exports rose 5.6 percent to $7.9 billion, following a recovery in smartphone sales.

Outbound shipments of computers jumped 77.1 percent to $1.2 billion. Demand for solid state drives (SSDs) continued to grow as virtual learning and conferences became popular in the U.S. and China, which lead the server market. Laptop shipments also surged.

Bio-health products gained 47.0 percent to $1.0 billion and recorded the 11th consecutive month of export growth. Despite the intensifying price competition for biosimilar products, increased demand for newly launched biosimilar products in overseas markets, contract manufacturing organizations (CMOs), and diagnostic kits led to the expansion.

Meanwhile, shipments of automobiles fell 4.2 percent to $3.7 billion mainly because a sharp drop in March to May sales in the EU market prevented it from clearing the high inventory. However, the decline has been easing since its worst in May.

Exports of petroleum products dropped 43.2 percent to $2.0 billion. Although the oil prices have been on the rise recently, they have not recovered to the level similar to last year and the reduced operating rates led to a decrease in exports.

Korean goods shipped to China went up 2.5 percent to $11.7 billion on the back of petroleum products, steels, computers, and wireless communication devices.

Shipments to the U.S. advanced 7.7 percent to $6.6 billion, thanks to strong sales of automobiles, semiconductors, computers, and home appliances.

Korean exports to ASEAN went down 14.6 percent to $7.1 billion. The contraction was attributable to weak demand for displays, general machinery, petroleum products, and steel products.

Shipments to the EU lost 11.1 percent to $4.1 billion, mainly due to automobiles, general machinery, petrochemicals, and steels.

Those to Japan saw a 21.5 percent decline to $2.0 billion because of general machinery, steels, petrochemicals, and semiconductors.

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