Fueled by semiconductor demand, exports rise modestly

Korea’s exports in February rose on year for the first time in 15 months on the back of strong semiconductor sales and a higher number of working days, according to a government report released Sunday.

Korea’s outbound shipments rose by 4.5 percent on year in February, for a total of $41.2 billion, according to the Ministry of Trade, Industry and Energy.

The increase owed in part to 3.5 additional working days to the month of February compared to last year, due to the timing of the Lunar New Year holidays.

As a result, the amount of outbound shipments per day dropped by 11.7 percent compared to the same month last year, landing at $2.7 billion, the ministry report showed.

The positive numbers for February also resulted from solid overseas demand for memory chips.

Despite postponement of chip purchases due to the outbreak of the coronavirus, rising base prices for DRAM chips contributed to semiconductor exports.

Chip exports rose by 9.4 percent on year. They had dropped 3.4 percent on year during the previous month.

The country’s exports to China showed negative growth for the second consecutive month, largely due to the outbreak of the new coronavirus.

Those exports fell 10.7 percent on year in January, followed by another 6.6 percent drop in February. Korea, which is becoming increasingly reliant on outbound shipments to China, had celebrated after posting positive export growth to the neighboring country in December, following an entire year in negative territory. Exports to China grew 3.3 percent on year in December.

“Compared to when SARS [severe acute respiratory syndrome] broke out, China’s economy has grown, and our reliance to China has also increased respectively,” said Trade Minister Sung Yun-mo.

“Considering China is playing a core role in the global supply chain, the impact of Covid-19 [the official name of the virus] will be greater than that of SARS.”

Exports of cars, for which production lines were disrupted by supply shortages of parts from China, reported a 16.6 percent drop in February, shipping cars worth $2.4 billion. Steel exports dropped 9.9 percent last month.

Imports rose by 1.4 percent during the same period, totaling $37.1 billion. Trade balance was able to pull off a surplus for 97 months in a row, posting $4.1 billion in profit.

“If the Covid-19 outbreak extends further, the slow growth in the global market, leading to lesser trade and decreased demand in China, will make things harder for Korea’s trade market in March,” the ministry said.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]