South Korea 20-day exports fall, but China demand offers hope

FILE PHOTO: A truck drives between shipping containers at a container terminal at Incheon port in Incheon, South Korea, May 26, 2016. REUTERS/Kim Hong-Ji/File Photo

SEOUL (Reuters) - South Korean exports fell again in the first 20 days of December, but a recovery in demand from China and stabilizing chip prices offered signs that a year-long run of declines may be nearing its end.

Exports by Asia’s fourth-largest economy during December 1-20 slid 2.0% on-year in value, customs data showed on Monday, the slowest fall in a year and far better than a 9.6% loss for the comparable 20-day period of November.

The average exports value per working day, a useful measure of a near-term trend after adjustment for calendar effects, slid 5.1% for the Dec. 1-20 period on-year, improving from a 9.6% fall in the Nov. 1-20 period and the best outcome in nine months.

“Given the increase in exports to China and the slower pace of contraction in chip sales, today’s figure show exports are on the path of recovery,” said Park Sang-hyun, chief economist at Hi Investment & Securities.

Shipments to China rose 5.3% on-year during the 20-day period. South Korea’s largest export market takes in more than a quarter of its smaller neighbor’s total sales abroad.

Monday’s data supported expectations by many analysts that South Korean exports would return to annual growth from January, ending a year-long streak of year-on-year declines, Park said.

Imports fell 0.5% during the 20-day period, better than an 11.2% decline in the Nov. 1-20 period. The trade surplus narrowed to $0.33 billion during the period from $0.55 billion in the same period a month earlier.

Overseas sales of semiconductors, the country’s major export, fell 16.7% in the Dec. 1-20 period versus a year ago, mainly attributable to a plunge in global prices despite solid demand in volume.

South Korea is due to announce trade figures for the whole of December on Jan. 1, 2020.

Additional reporting by Yena Park; Editing by Choonsik Yoo and Richard Pullin