South Korea exports snap year-long downturn, recovery in China demand slow

SEOUL: South Korea’s exports in October rose in annual terms for the first time in 13 months, as shipments to the United States were robust while the weakness in China demand eased slowly.

Overseas sales last month by Asia’s fourth-largest economy rose 5.1% year-on-year to $55.09 billion, trade data showed on Wednesday.

That, however, was weaker than a median 5.5% gain tipped in a Reuters survey of economists.

It swung from a 4.4% fall the previous month and marked the first year-on-year increase since September 2022.

By destination, exports to the United States gained 17.3%, the most since May 2022, while China-bound shipments fell 9.5%, the least in 13 months.

Exports of cars rose 19.8%, extending gains to a 16th straight month, while petroleum products also jumped 18.0%, after seven straight months of decline.

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Semiconductor shipments fell for the 15th consecutive month, but the 3.1% drop in October was the smallest in the streak.

“Semiconductors, with their prices having bottomed out, are leading the recovery of exports, while China-bound exports are also improving slowly,” said Lee Jeong-hoon, an analyst at Eugene Investment Securities.

“It is difficult to say China’s economy is strong and there is uncertainty over demand in other major countries next year, but for the time being, exports will likely continue to recover,” he said.

Trade Minister Bang Moon-kyu said after the data release the government would make a big push to ensure exports continue to improve through the end of the year, adding it would thoroughly manage risks such as the Israel-Hamas conflict and China’s restrictions on graphite exports.

In October, South Korea’s factory activity contracted for the 16th straight month, but the decline in new export orders softened, another survey showed on Wednesday.

Still, demand in China was muted, according to the survey.

In China, manufacturing activity unexpectedly contracted in October, raising questions over the state of the country’s fragile economic recovery at the start of the fourth quarter.

South Korea’s imports fell 9.7% to $53.46 billion in October, narrower than the 16.5% drop in the previous month but deeper than a 4.3% decline expected by economists.

As a result, the country posted a trade surplus of $1.64 billion in October, in contrast to economists’ forecasts for a deficit.