South Korea's 20-day exports return to growth for first time in 6 months

Shipments of semiconductors, South Korea's top-selling item, surged 25.3 per cent.
Shipments of semiconductors, South Korea's top-selling item, surged 25.3 per cent.PHOTO: REUTERS

SEOUL (REUTERS) - South Korea's exports for the first 20 days of the month returned to growth for the first time since March, helped by higher microchip and car sales in a boost to recovery hopes in the trade-reliant economy.

Exports grew 3.6 per cent from a year earlier during Sept 1-20, while imports declined 6.8 per cent on-year, Korea Customs Service data showed on Monday (Sept 21).

The positive overseas sales also reflected two more working days this year due to changes in the nation's Chuseok holiday, underlining the still-sluggish global demand conditions.

Shipments had slumped 7.5 per cent during Aug 1-20, while imports tumbled 12.4 per cent, as the coronavirus pandemic took a toll on businesses.

Average exports per working day fell 9.8 per cent when adjusting for the calendar effect of extra work days.

A breakdown of data showed shipments of semiconductors, South Korea's top exporting item, surged 25.3 per cent, while those of cars also jumped 38.8 per cent.

Analysts have attributed the jump in chip exports earlier this month to stockpiling by Chinese telecom giant Huawei Technologies ahead of U.S. sanctions which kicked in on Sept. 15.

"It is questionable whether the robust chip sales will continue in October, as (September data) reflects Huawei's stockpiling demand during the first half of the month," said Meritz Securities' economist Lee Seung-hoon.

"But there is no doubt that the exports recovery is still on track," Mr Lee said.

By destination, exports to China, the nation's biggest trading partner, increased 8.7 per cent, while those to the United States and the European Union also jumped 16.1 per cent and 9.6 per cent, respectively.

Full month trade data for the month will be released on Oct 1.