South Korea’s exports contracted for the fifth straight month in April as plummeting memory chip prices and weak demand from its largest trading partner China continued to weigh heavily on Asia’s fourth-largest economy.
The country’s outbound shipments totaled $48.9 billion in April, down 2 percent from the same month a year earlier, according to the Ministry of Trade, Industry and Energy on Wednesday.
This is the fifth consecutive month of export decline, boding ill for the trade-reliant economy. Korea`s gross domestic product (GDP) unexpectedly contracted in the first quarter, shrinking 0.3 percent from the previous three months. The central bank also recently trimmed its economic growth outlook for 2019 from 2.6 percent to 2.5 percent, a seven-year low, citing softening global demand and subdued corporate investment.
Korea`s exports first began to slip in December 2018, falling 1.7 percent. The downward slide continued to accelerate, with shipments sinking as much as 11.4 percent in February. April marks the country’s longest losing streak since January 2015 when exports went on a downward spiral for the next 19 months.
Export volume in April was up 2.5 percent, reversing course in three months, but the total amount was dragged down by the falling prices of semiconductors, according to the ministry.
Shipments of semiconductors, which account for one-fifth of Korea’s total exports, dipped 13.5 percent from a year earlier. The losses have been narrowed since February when chipmakers suffered a 24.8 percent hit to their shipments. But soft memory chip prices have continued to put a damper on the country’s overall exports. DRAM prices in April fell 52.2 percent from a year-ago period, with NAND flash prices also down 26.5 percent.
Other mainstay industries were not much better. Ten of the 13 key export items saw their exports contract year over year. The average shipments of the 13 sectors were down by 3.4 percent, following a 14.6 percent drop in February and a 9.7 percent fall in March.
Despite the rising global oil prices, shipments of petrochemicals were off 5.7 percent and petroleum products 2.6 percent. Exports improved on a volume basis but export value was undercut from a drop in unit prices following the sharp rise in U.S. supply.
Other major sectors also logged heavy losses, including steel (7.7 percent), displays (9.2 percent), computers (36.6 percent) and mobile devices (4 percent). Textile shipments fell 5.6 percent and household appliances 1.3 percent.
Only three industries saw some growth. Shipbuilders reported a 53.6 percent jump in exports, with automakers posting a solid 5.8 percent gain. Machinery exports inched up 0.3 percent.
China-bound exports, which make up nearly 30 percent of Korea’s total outbound shipments, fell 4.5 percent in April on year, the losses narrowed but still on a downward slope for the sixth consecutive month.
By Lim Sung-hyun and Kim Hyo-jin
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