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(2nd LD) S. Korea's exports retreat 3.2 pct in Oct.

2016/11/01 13:47

(ATTN: ADDS comments in last three paras)

SEJONG, Nov. 1 (Yonhap) -- South Korea's exports fell for the second straight month in October due mainly to sluggish shipments of cars and mobile devices, government data showed Tuesday.

Outbound shipments came to US$41.9 billion last month, down 3.2 percent from $43.4 billion the same month last year, according to the Ministry of Trade, Industry and Energy.

The October figure marks the second consecutive month of negative growth since September when outbound shipments fell 5.9 percent on-year.

Imports also posted negative growth last month, falling 5.4 percent on-year to $34.8 billion.

September's trade surplus came to $7.2 billion, marking the 57th consecutive month of a surplus.

The trade ministry noted that October's pace slowed from the previous month despite many downside risks at home and abroad, on the back of bullish demand for chips.

South Korea's exports have posted negative growth in 21 months out of the recent 22 months, except for the only plus figure in August, due to a global economic slowdown and a drop in oil prices.

It said the downturn is largely driven by partial strikes at major carmakers, including industry leader Hyundai Motor Co., and the worldwide recalls and production termination of Samsung Electronics Co.'s Galaxy Note 7 smarpthone.

Outbound shipments of vehicles fell 11.8 percent in October from a year earlier, narrowing from a 24 percent plunge tallied in the previous month, while exports of auto parts backtracked 6.8 percent on-year.

Wireless devices, including mobile phones and components, tumbled 28.1 percent last month from a year earlier, marking the steepest on-year decline since July 2012.

The walkouts in the automobile industry dragged down the country's exports by 1.1 percentage points, worth $500 million, while the Galaxy Note 7's production halt led to a 1.6 percentage-point drop, or $670 million, in October exports, according to the ministry.

On the other hand, semiconductors and personal computers posted positive growth last month to offset the sharp decline in cars and phones.

Exports of chips rose 1.7 percent in October, turning around from a 2.6 percent drop in the previous month, on the back of a price hike in dynamic random access memory (DRAM) chips.

Overseas sales of South Korea-made personal computers rose 7.1 percent last month, extending their winning streak to six straight months, on growing demand for new devices.

Shipbuilders exported 23 vessels last month to post a 49.4 percent on-year surge, a rebound from a 14 percent fall in September.

By region, exports to Vietnam stayed positive, jumping 19.9 percent last month, while shipments to the European Union gained 3.8 percent on-year, swinging to the positive terrain for the first time in seven months.

Exports to China, South Korea's largest export destination, sank 11.3 percent in October from a year ago, continuing the losing streak that started at the beginning of the year.

Shipments to the United States and Japan fell 10.3 percent and 1.7 percent last month, respectively.

The trade ministry expected that downside risks at home and abroad will weigh heavily on the country's exports in the remaining months of 2016.

"Exports will be affected by a continuous slump in wireless devices and ongoing strikes at auto firms," Deputy Trade Minister Chae hee-bong said in a briefing. "But the data will improve to a slight extent as demand for chips, electronic components and flat screens has been on a steady rise."

   He said the government will come up with an estimate for next year's exports in mid-November.