"Car Exports Down 80%" Early May Exports Halved... "The Future Is Even More Problematic" (Comprehensive)

Korea Customs Service Announces Export-Import Status from May 1 to 10
Exports Down 46.3% YoY to 6.9 Billion USD
Imports at 9.6 Billion USD...Trade Deficit of 2.6 Billion USD

[Image source=Yonhap News]

[Asia Economy Reporters Kim Bo-kyung and Moon Chae-seok] As the novel coronavirus disease (COVID-19) severely impacted the global economy, South Korea's export volume in early this month dropped to half of last year's level. Automobile exports decreased by over 80%, and exports to major countries such as the United States and the European Union (EU) fell by more than half.

According to the Korea Customs Service on the 11th, the export amount from May 1 to 10 (provisional customs clearance basis) was $6.919 billion, down 46.3% ($5.96 billion) compared to the same period last year. The number of working days during this period was 5, which is 1.5 days fewer than last year. Considering the number of working days, the average daily export amount was $1.38 billion, a 30.2% decrease from $1.98 billion during the same period last year.

During this period, imports amounted to $9.551 billion, down 37.2% ($5.65 billion) compared to the same period last year. As a result, the trade balance recorded a deficit of $2.632 billion.

Due to the global demand slump caused by COVID-19, semiconductor exports decreased by 17.8% compared to the same period a year ago. Considering that semiconductor exports fell by 14.9% in April, it is interpreted that exports have further deteriorated this month. By product category, passenger cars (-80.4%), wireless communication devices (-35.9%), and petroleum products (-75.6%) decreased, while ship exports increased by 55.0%.

In the case of passenger cars, it is analyzed that the combined effects of overseas factory and sales outlet closures and demand contraction due to COVID-19 influenced the decline. Petroleum products saw reduced sales volume due to demand contraction, and export unit prices plummeted due to falling oil prices.

Looking at exports by country, China (-29.4%), the United States (-54.8%), the EU (-50.6%), Vietnam (-52.2%), Japan (-48.4%), and the Middle East (-27.3%) all decreased. Exports to major countries such as the United States and the EU, which maintained lockdown orders amid the spread of COVID-19, fell by more than half.

There are forecasts that South Korea's export outlook will not be bright as long as the global economic contraction caused by COVID-19 continues. Professor Jeong In-gyo of Inha University's Department of International Trade stated, "Because existing export contracts and inventories were utilized, exports came out to this extent even though they were halved," and predicted, "Export performance may worsen further by the end of this month."

He added, "The key issue is how long the COVID-19 situation will continue," expressing concern that "Among the Group of Twenty (G20) countries, it is still difficult to find any country where COVID-19 has stabilized, so export sluggishness may continue in the second half of the year."

Meanwhile, by product category, imports of semiconductor manufacturing equipment increased by 69.7%, but imports of semiconductors (-18.6%), crude oil (-73.8%), machinery (-19.9%), and precision instruments (-20.1%) decreased.

By country, imports from Hong Kong increased by 67.8%, while imports from China (-23.6%), the EU (-7.6%), the United States (-49.8%), the Middle East (-72.4%), Japan (-24.7%), and Vietnam (-13.9%) mostly decreased.

This content was produced with the assistance of AI translation services.