"The yen's sharp rise against the dollar will help sharpen (export) competitiveness of the local automobile, electronics and steel sectors and boost their exports," said a trader with Korea Zinc Co Ltd. That meant demand for base metals should increase proportionally, he said. South Korea's base metal producers had so far tried to ship their output overseas to make up for slackening domestic demand as a result of the domestic economic recession, he said.

South Korea's refined zinc exports surged 251 per cent to 102,500 tonnes in the first nine months of this year from the same period a year ago, he said. Korea Zinc is the largest of South Korea'stwo zinc producers. The trader said local zinc producers' domestic sales fell 15.1 per cent to 166,400 tonnes in the first nine months of 1998 from 196,000 tonnes a year earlier.

These figures contrasted with the contraction in the country's overall exports during the nine-month period, hit by the shrinking demand in crisis-hit Asia and in other markets. Monthly exports fell 3.4 percent year-on-year in September after suffering year-on-year declines of 11.1 percent and 14.3 percent in the previous two months.

For the first nine months of this year automobile exports fell 11.4 percent year-on-year and semiconductor by 7.2 percent while foreign ship orders shrank by 21.9 percent, government data showed.