S Korea petrochemicals Mar exports fall 25%, overall shipments down 13.6%

SINGAPORE (ICIS)–South Korea’s petrochemical exports fell by 25.1% year on year to $4.09bn in March, weighing on overall shipments abroad as manufacturing conditions continued to weaken, official data showed on Monday.

The country’s overall exports fell by 13.6% year on year to $55.1bn in March, while imports were down by 6.4% to $59.8bn, the Ministry of Trade, Industry and Energy (MOTIE) said in a statement on Monday.

The resulting trade deficit of around $4.6bn in March was mainly due to sluggish semiconductor exports and a high level of energy imports, it said.

“March exports were hit by the slowdown in the global economy and semiconductor industry, as well as the high base effect of last year’s March exports having recorded historic highs,” the Ministry said.

Automobile exports were up by 64.2% year on year in March to $6.52bn, while petroleum exports were down by 16.6% at $4.6bn.

For petroleum products, jet fuel exports increased in March on the back of rebounding air travel, but the stabilisation of oil prices lowered their unit value for the first time in 25 months, the ministry said.

Exports of finished cars hit an all-time high in March on improved automobile chip supply and strong demand for new electric and sport utility vehicles, MOTIE said.

By destination, overall exports to the US, Middle East, India and Commonwealth of Independent States (CIS) expanded, whereas those to regions with high semiconductor export shares, like China and ASEAN, dropped.

Exports to China declined as shipments of major items like semiconductors and petrochemicals decreased, with DRAM and other core items’ price falls injuring export value.

“Other countries like China and Japan, as well as exporting powerhouses like Taiwan and Vietnam, are also experiencing export setbacks,” MOTIE said.

China’s exports fell for the fifth consecutive month in February this year, while Japan’s overall shipments abroad dropped for the 10th straight month in January, it said.

MARCH FACTORY ACTIVITY CONTINUES TO DETERIORATE

South Korea’s manufacturing sector signalled a stronger deterioration in March, with output and new orders both registering steeper declines from the previous month, according to S&P Global.

The S&P Global South Korea manufacturing purchasing managers’ index (PMI) dipped from 48.5 in February to 47.6 in March, with output decreasing for the eleventh straight month on muted domestic and external demand conditions.

“With rates of decline for output and new orders quickening to five and three-month highs respectively, latest survey data provides signs that the sector still has a way to go to overcome the current downturn,” said Usamah Bhatti, Economist at S&P Global Market Intelligence.

In terms of prices, both input costs and charged price inflation accelerated in March and remained historically sharp, with firms continuing to partially pass increased input costs to their clients in the form of higher selling prices, which rose at a moderate pace.

“Positively, South Korean manufacturers were buoyed by the softest deterioration in average vendor performance since November 2019, as the weakness in demand allowed suppliers to shore up their supply chains to ensure more timely delivery of inputs,” Bhatti said.

Focus article by Nurluqman Suratman