(Bloomberg) -- Early South Korea export figures show shipment declines easing in June amid resilient semiconductor demand and more purchases from China that raise some hope the global trade slump may be bottoming.
Average daily shipments fell 16% in the first twenty days of the month compared with the prior year, South Korea’s customs office said Monday, improving from a decline that exceeded 20% in May.
Total semiconductor shipments, the country’s biggest source of trade income, rose 2.6%, while those of ships increased 36%. Exports to China, South Korea’s largest overseas market, climbed 15%.
A smaller drop in South Korean exports, which are seen as a barometer of world trade, support signs the pandemic’s grip on the global economy may be loosening as key markets start to reopen and China’s factories increase production.
Still, it’s too early for full-fledged optimism given the potential for new waves of infection and the recent heightening of U.S.-China trade tensions.
“The tensions are likely to persist, especially ahead of the U.S. presidential election,” said Mun Byung-ki, a researcher at the Korea International Trade Association. “That’s another variable to watch for on top of fears about the second wave of infections, which could have less impact on exports than the first, though, if a shutdowns can be avoided.”
More people working and studying at home have pushed up demand for South Korea’s chips amid the pandemic, while local shipbuilders are seeing a rise in orders from around the world, including the Middle East. Shipments of wireless products such as handsets rose 11%, according to Monday’s trade report.
Overall exports during the first 20 days of the month slid less than the daily average, boosted by 1.5 extra working days in the period compared with last year. Total shipments through June 20 slid just 7.5%, while imports fell 12%.
Car sales dropped 37% and oil products slid 41%. Consumer appliances fell 15%.
Exports to the U.S. fell 10%, while shipments to the EU dropped 14% and those to Japan slid 16%.
©2020 Bloomberg L.P.
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