Streak of monthly trade deficits extends to 15

Containers being loaded at the port of Busan on Thursday.[NEWS1]

Korea extended its longest run of monthly trade deficits in 27 years in May, as weak chip demand continues to weigh heavily on exports.

May’s trade deficit came in at $2.1 billion, putting the country in the red for 15 months in a row, according to the Ministry of Trade, Industry and Energy on Thursday.

Export volumes shrank 15.2 percent to $52.24 billion compared to the same period last year. The figure has been on a year-on-year decline for an eighth consecutive month.

The Industry Ministry cited persisting weak demand for electronics and therefore semiconductors, as well as a high base effect from May last year, for the slumping exports.

Chip exports plunged 36.2 percent on year to $7.37 billion, as memory chip prices continue to slip.

The price of dynamic random access memory, or DRAM, was $1.4 in May, down from $1.45 the previous month and less than half of the $3.35 in June last year.

The average NAND memory price stood at $3.82 in May, compared to the average of $4.81 in the first five months of last year.

However, the Industry Ministry said in a release that it is expecting the market situation to gradually improve in the latter half of the year following production cuts from chipmakers.

In April, Samsung Electronics announced a production cut for its memory chips, forecasting its inventory levels to shrink starting in the second quarter.

As fuel prices continue to go down, petroleum product exports fell 33.2 percent to $4.36 billion, and petrochemicals also saw a 26.3 percent decrease to $3.83 billion.

Meanwhile, car exports jumped 49.4 percent to $6.2 billion, exceeding the $6 billion mark for the third consecutive month, thanks to strong sales of high-margin sports utility vehicles and electric cars in the United States and Europe.

While exports toward all major markets, including the United States and the Eurozone, all shrank compared to last year, outbound shipments to China and Vietnam saw significant drops as demand for imports in the two countries remains weak.

Imports declined 14 percent on year to $54.34 billion due to decreasing fuel prices.

Though Korea posted a trade deficit of $2.1 billion in May, the size of losses has been steadily getting smaller after the figure hit a record of $12.69 billion in January, as fuel prices took a downturn from last year's peak.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]