South Korea October exports drop on fewer working days, virus lockdown angst may weigh

By Joori Roh

SEOUL (Reuters) – South Korean exports slipped back into contraction in October, as the country’s Chuseok holiday, which fell in early October, resulted in two fewer working days, despite strong chip and car sales, government data showed on Sunday.

Exports slid 3.6% last month from a year earlier to $44.98 billion, after a 7.6% jump in September – the first expansion since February and the fastest rise in 23 months.

Fifteen analysts had expected a 4.0% decline.

Average daily exports, however, recorded the first expansion in nine months with a 5.6% rise, adding to recent signs that Asia’s fourth largest economy is seeing a moderate recovery.

South Korea’s monthly trade data, the first to be released among major exporting economies, is considered a bellwether for global trade.

A “negative reading was inevitable due to fewer working days, but the rate of decline was better than expected. … That shows exports recovery has been resilient at least by October,” said HI Investment & Securities’ chief economist Park Sang-hyun.

The trade ministry said shipments of semiconductors and cars, in average daily terms, recorded the highest sales of the year by volume, without providing actual figures.

Shipments to China, South Korea’s biggest trading partner, dropped 5.7% due to its eight-day National Day holiday, but that rose 3.2% when eliminating calendar effect, the trade ministry said.

Those to the United States and European Union, however, jumped 3.3% and 9.5% each, but surged 13.1% and 19.9%, respectively, in per-day terms.

However, economists are now worried surging coronavirus cases globally and fresh lockdowns in Europe may hurt overseas demand for South Korean goods again.

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“(Due to the time lag in export orders) shipments to the EU in December-January is the biggest worrisome … but exports to China will likely rebound and may offset the sluggish sales to EU,” Park added.

Meanwhile, October imports fell 5.8%, reversing the previous month’s 1.6% rise. This led to a preliminary trade surplus of $5.98 billion, smaller than $8.70 billion in September.

Analysts had expected a 2.1% drop in imports.

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