Lim Sung-hyun and Lee Eun-joo
South Korea’s exports extended its losing streak for a sixth consecutive month in May in an absence of signs for recovery in semiconductor demand and global economy, especially Chinese economy, amid intensifying trade frictions between the world’s two biggest economies, the United States and China.
According to data released by the Ministry of Trade, Industry and Energy on Saturday, Korea’s exports came to $45.9 billion in May, down 9.4 percent from the same period a year earlier. It is the sixth straight month that the nation’s exports dropped on year since December last year when the figure shrank 1.2 percent. The country’s exports declined 5.8 percent in January, 11.1 percent in February, 8.3 percent in March, and 2.0 percent in April.
Daily exports averaged $1.996 billion in May, down 15.3 percent from the previous year, data showed.
The trade ministry blamed the fall in exports largely to the escalating trade tensions between the U.S. and China, the delayed recovery in memory chip demand, and the weak Chinese economy. The drop in exports has slowed down since February but market watchers noted that the deepening rift between the world’s two biggest economies, which are also Korea’s two biggest trading partners, has been preventing further improvement, with falling exports becoming a global phenomenon. U.S. outbound shipments fell 0.7 percent in March from a year earlier while China exports retreated 2.7 percent in April, Japan down 2.4 percent in April, and Germany 6.8 percent lower in March.
By item, outbound shipments of semiconductors plunged a whopping 30.5 percent in May from a year ago, coming at $7.5 billion, data showed. The trade ministry said the price of 8-gigabit dynamic random-access memory (DRAM) plummeted 57.3 percent over the cited period and of 128Gb down 24.6 percent amid dwindling demand for smartphones and ongoing inventory adjustment at data centers by global information technology (IT) companies in May.
By region, exports to China, Korea’s biggest trading partner, contracted 20.1 percent in May from a year earlier, and to the European Union 12.6 percent. The ongoing trade war between the U.S. and China has deteriorated Chinese companies’ overseas trade conditions, while Germany, Korea’s largest export market in the EU, is also struggling from a slowdown in economic growth.
Korea’s exports to the U.S., meanwhile, grew 6.0 percent in May from a year earlier, extending gains for an 8th straight month, thanks to strong demand for automobiles, electronics, and textile.
Imports came to $43.6 billion in May, down 1.9 percent from a year ago. Domestic demand for crude oil, manufacturing facilities, and gasoline-powered vehicles remained weak amid falling international oil prices, weak facility investment, and sluggish car demand. Trade surplus reached $2.27 billion in May, marking 88 straight months for the country’s exports to exceed imports.