• Korea’s Exports to Turn Around from February Next Year
    2019-10-28 hit 1135

    Korea’s Exports to Turn Around from February Next Year 

    - KITA checked and forecast export conditions semiconductor business will recover with the rebound of export price -


    It is forecast that Korea's exports will bottom out this month see turnaround from February next year as semiconductor business is recovering.  

    The Institute for International Trade (President: Park Seung-kwan) of the Korea International Trade Association anticipated in the report titled Status of Recent Exports and Outlook issued on October 28th that the export decline will scale down from November and exports will turn positive in February next year with the improved semiconductor unit prices, the recovery of daily export average and base effects. In particular, the semiconductor industry is expected to lead the recovery of overall exports with the 10 percent increase in annual exports thanks to price rebound and a rise in the quantity of the memory chips. 

    The report stated, It is expected that the price of memory chip will recover in earnest from the second quarter of next year thanks to the increased capacity of smart phones and the growing demand for 5th generation mobile communication (5G) as well as Solid State Drive (SSD). The report also projected The inventory level will normalize and lead a price rebound as demand will surpass supply from the first quarter of next year for NAND and from the second quarter of next year for DRAM.

    Korea takes up 64 percent of the global memory chip market and 19 percent of the foundry market. 

    The recent signs of easing trade tensions between the United States and China, the stimulus packages of major countries, and the recovery of oil prices are also positive factors. The report said, Korea's exports from January to August declined 2.9 percent on a volume basis, but major items such as semiconductors, petrochemicals, automobiles, telecommunications equipment, home appliances, and cosmetics increased, compared to Germany (-4.2%) and Japan (-4.7%). Since Korea’s advance exceeded the world average when the global economy improved over the last then years, Korea is expected to recover faster than the world trade both in quantity and price.

    The results of diversification such as Korea's increased market share in major import markets such as the United States, India, and Russia, the decreased reliance on exports to China, and the expanded market share in the New Southern and New Northern regions will also contribute to the recovery of the exports. According to the World Trade Organization (WTO), global imports are expected to ascend 2.7 percent next year, mainly in Asia, Latin America, Russia and the Commonwealth of Independent States (CIS). Since competitiveness of Korean goods in those regions is improving, it is expected to be a great help to increase Korea’s exports.

    Moon Byeong-gi, senior researcher at the Institute for International Trade of the Korea International Trade Association, said, From November, the export conditions will gradually improve thanks to the recovery of semiconductor business and volume. He stressed In order to achieve quantitative and qualitative growth of exports, we need to make efforts to respond to short-term risks such as foreign exchange rates, oil prices and interest rate fluctuations. At the same time, we need to endeavor to innovate the export structure by diversifying markets, making materials and components high value-added, and strengthen competitiveness in consumer goods and new industries.

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