S. Korea exports decline on weak chip demand

SEOUL - South Korea's exports fell for three straight months through February, posting a double-digit decline last month on weak demand for locally made semiconductors, a recent government report showed.

Exports, which account for about half of the economy, declined 11.7 percent over the year to $39.56 billion in February, according to the Ministry of Trade, Industry and Energy.

The downward trend continued, after sliding 1.2 percent in December last year and 5.8 percent in January. It marked the first time since July 2016 that the outbound shipment kept falling for three months in a row.

Daily average exports stood at $2.08 billion in February, up from $1.93 billion in January.

Imports shrank 12.6 percent to $36.47 billion, sending the trade surplus in February to $3.09 billion.

The trade balance stayed in the black for 85 straight months, but last month's surplus was below a monthly average of $5.9 billion tallied in 2018.

The double-digit fall in exports stemmed from soft demand for locally made chips, of which shipments tumbled 24.8 percent in February from a year earlier.

Prices for Dram memory chips, the country's major export item, plunged 36.8 percent last month, with the price for Nand flash memory chips dropping 25.2 percent.

Exports of oil products and petrochemicals logged a double-digit reduction last month as a supply glut pulled down product prices.

Machinery exports rose for two straight months on demand from China and India, with car shipments gaining for the third consecutive month on demand for new SUV models and environmentally friendly vehicles.

Steel exports grew for two months through February on demand from the United States and Japan, but exports of display panels declined on lower product prices.

Shipments of telecommunication devices, such as smartphones, kept sliding by double digits on lower product prices and increased production in overseas factories.

Among the new growth engine products, biopharmaceutical product exports advanced 24.5 percent last month on demand for biosimilars and medical devices.

Shipments for secondary batteries recorded a double-digit increase on demand from the European Union and the Association of Southeast Asian Nation member countries.

OLED exports rose for the fourth consecutive month thanks to strong demand for premium televisions, while electric vehicle shipments surged 92.4 percent as tight environmental regulations strengthened demand for environmentally-friendly vehicles.

By country, exports to China, South Korea's biggest trading partner, sank 17.4 percent in February from a year earlier on reduced demand for chips, petrochemicals, oil products and steel.

Shipments to the EU declined last month, but the country's exports to the US gained for five months in a row on demand for automobile and telecommunication devices.

Exports to India kept an upward trend for the sixth consecutive month, but shipments to Southeast Asian countries fell on soft demand for smartphones and oil products.