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Korea's exports fall 5.7% in October 2022-11-01

The Ministry of Trade, Industry and Energy announced on November 1 that Korean exports in October decreased 5.7 percent year-on-year to USD 52.5 billion. Imports rose 9.9 percent to $59.2 billion and the trade balance stood at a deficit of $6.7 billion.

The fall in exports was affected by unfavorable external conditions such as the global economic downturn, protracted Russia-Ukraine war and major countries’ austerity measures. China’s reduced imports and semiconductor price falls, combined with a high base effect from October 2021, resulted in the shrinkage.

In contrast, imports rose as energy purchases and prices surged. Other countries like Japan and Germany with similar economic constitutions likewise suffered export declines and trade deficits recently.

By item, exports of automobiles, petroleum products, secondary batteries and car parts grew, whereas chips, petrochemicals, displays and wireless communication devices decreased.

Chip exports decreased 17.4 percent to $9.2 billion, as exports of memory chips (down 35.7 percent to $4.5 billion) like DRAM and NAND flash dropped from slowing down of global demand and inventory buildups. Meanwhile, system chips posted a double-digit increase (up 17.6 percent to $4.4 billion).

Wireless communication devices (down 5.4 percent to $1.8 billion) saw demand hikes for selective premium products, but overall smartphone demand shrank as worldwide demand grew sluggish.

Display shipments (down 7.9 percent to $1.8 billion) experienced declines in LCD prices and exports, while OLED panel exports grew along with increased exports of high value-added items like LTPO (low-temperature polycrystalline oxide) displays.

Computer exports (down 37.1 percent to $0.9 billion) contracted amid datacenter investment delays and diminished demand for IT devices.

Home appliances declined 22.3 percent to $0.6 billion as demand receded from tighter monetary policies in major markets like the U.S. and Europe.

Petroleum products (up 7.6 percent to $4.4 billion) enjoyed a continued upward climb on the backs of high oil prices.

Steel exports (down 20.8 percent to $2.7 billion) slid as demand and unit prices decreased in major markets like the U.S., China and Europe.

Petrochemical exports (down 25.5 percent to $3.7 billion) were hit as downstream industries saw lower demand and oversupply, bringing about product price drops.

Finished automobile exports posted a double-digit leap (up 28.5 percent to $4.9 billion) thanks to improved chip supply conditions and heightened demand for eco-friendly cars.

Car parts (up 3.2 percent to $1.8 billion) showed positive growth, owing to enhanced parts supply situation and wider domestic and local production of finished cars, which boosted shipments to core markets like the U.S. and Latin America.

The global shipbuilding industry is sensing a revival, but orders won after 2021 have yet to be included in Korea’s export records due to the time gap between bid winning, shipbuilding and handover. Accordingly, October shipbuilding exports mark a small reduction (down 2.6 percent to $1.5 billion).

Demand for general machinery (down 3.4 percent to $3.9 billion) surged in regions with healthy infrastructure and facilities investments, such as in the U.S., EU and GCC, but China’s real estate stagnation more than offset overall exports.

New industries like EVs and secondary batteries (up 16.7 percent to $0.8 billion) grew in outbound shipments, whereas lessening demand for COVID test kits drove down bio health exports (down 18.7 percent to $1.1 billion).

By destination, shipments to the U.S. (up 6.6 percent to $8.6 billion) and EU (up 10.3 percent to $5.6 billion) expanded, and those to China (down 15.7 percent to $12.2 billion), ASEAN (down 5.8 percent to $9.2 billion), Japan (down 13.1 percent to $2.3 billion), Latin America (down 27.0 percent to $1.8 billion), India (down 0.3 percent to $1.4 billion) and the GCC (down 6.5 percent to $1.4 billion) contracted.

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