Exports in 1Q fell 29% year-on-year to USD 580 million

According to KODMIC’s analysis based on the HS Code, which is an international standard used for industry classification, die & mold exports and imports in the first quarter of 2021 amounted to USD 577.62 million. As estimated in the previous edition (No. 672, April 16, 2021. 4. 16), the overall decline in overseas demand caused by the global corona virus resulted in a 29.0% dip year-on-year. In view of the time lag from order placement, development, and supply of die & mold products, the global pandemic effect appears to have concentrated in the first quarter. In 2020,  Korea did well in terms of exports thanks to the rebound in the fourth quarter and favorable export momentum in certain countries, such as the US, Mexico, and Vietnam; however, the fact that such major exporting countries as Japan, China, and India saw exports drop by roughly 20% is worrisome. Accordingly, the die & mold export industry is to struggle in 2021. However, amid the narrowing percentage of exports among the largest traditional die & mold exporters like Japan and China, the degree in fluctuation of monthly exports is widening due to the one-off increase in orders of specific countries. Indeed, exports stood at USD 520 million in the third quarter of 2020 but rebounded by 66% to USD 870 million. Meanwhile, the government announced that exports of small and mid-sized enterprises (SMEs) improved based on strong export growth of self-diagnostic kits and semiconductor equipment. In the first quarter of 2021, SMEs saw a hike in exports by 12.1% year-on-year to USD 27 billion, the highest growth among previous first quarter performances.

Exports fell across all die & mold products in 1Q, Press die & mold exports hit the hardest by recording a 40% drop

In the first quarter of 2021, die & mold exports and imports amounted to USD 577.62 million and USD 52.65 million, and trade balance deficit totaled USD 524.97 million. By product item, exports and imports all did poorly across the board. In particular, press die & mold products recorded the worst performance by dipping 40.1% year-on-year from USD 324.51 million to USD 194.43 million. In the case of press die & mold products, the largest portion of demand comes from the automobile industry and given that orders are placed in large quantities, it was hit hard by COVID-19. Plastic die & mold exports also fell 21.5% year-on-year from USD 415.79 million 2020 to USD 326.54 million 2021, and die casting mold exports slipped 10.9% to USD 24.46 million over the same period.

Export decline in Japan, US, China, India, and Vietnam; Sharp export growth in Indonesia where Korean automakers operate

In reviewing the die & mold exports in the first quarter of 2021 per country, Japan, India, and the US all recorded a decline as opposed to having posted exports surpassing USD 100 million in the first quarter of 2020. Japan posted a 19.9% drop year-on-year to USD 83.96 million, and India and the US recorded a slight decline over the same period to USD 41.02 million (△64.7%) and USD 39.37 million (△68.4%), respectively. Export downtrend was apparent in the US where it supported domestic exports in 2020, and the negative export performance in Japan was attributable to sluggish market and weak demand caused by the corona virus. Also, other major exporting countries struggled in terms of exports, such as Vietnam and (△23.3%) and China (△40.1%). In contrast, Mexico witnessed sustainable growth in die & mold exports in 2020, up 9.3% year-on-year to USD 79.67 million, and Indonesia, where Korean automakers operate, posted growth of over 500% to USD 48.11 million over the same period.

Need to prepare for the era of export decline, management crisis, and post-COVID 19 era

The global pandemic has yet to end, which in turn is to continuously place burden on the die & mold industry and exports. In addition, the considerable hike in the price of raw materials is putting a heavier toll on the overall die & mold industry. In light of the post-COVID 19 era, we need to be prepared for pent-up development orders spilling into the market. Therefore, efforts need to continue in regards to processing innovation, such as smart plants, management of overseas buyers, and attraction of new clients via online channels.