South Korean Exports a Harbinger of Pain South Korean Exports a Harbinger of Pain South Korean Exports a Harbinger of Pain

South Korean Exports a Harbinger of Pain

Equities 5 minutes to read

Summary:  Delivering a blow to those still waiting for the 2H recovery, data released today showed South Korean exports heading toward their lowest level since the financial crisis of 2008. This could be a harbinger of pain ahead in Asian trade data and the SOX index which is hovering around all time highs.

South Korean exports of information and communication technology products have been falling for 10 straight months and it looks like September will be added to that streak.

South Korea’s trade data is released before other global trade data so is a good indicator of more negativity across Asian export data to unfold throughout September, as the lagged effect of September’s tariff hikes takes effect and the global economy has continued to slow, buffeted by cyclical headwinds and a fragile geopolitical backdrop.

But more worryingly South Korean data is typically a good lead on the global economy and global demand given that its industries are heavily integrated within the global supply chain and highly cyclical. It is for this reason that South Korean data is often used in global macro leading indicator models and expectations of future earnings growth and world trade growth, so this latest round of ugly trade data tempers any optimistic notion of a recovery in tech demand and global demand being around the corner. So, this data spells more trouble ahead.

For the first 20 days of September:

  • exports down 21.8% y/y
  • imports down 11.1% y/y
  • exports to China down 29.8%
  • exports Semiconductors down -39.8%

South Korea is distinctly vulnerable as the trade war, China slowdown, downturn in the electronic cycle and dispute with Japan weigh on economic activity along with the broad-based slowdown visible across the whole of Asia. But also, South Korea is heavily reliant on USD funding in a world where dollar liquidity is tight which only exacerbates the other issues, meaning South Korean GDP growth will remain hampered and the KRW pressured.

The prolonged weakness in chip demand and cyclical downturn in electronics, evidenced by exports of Semiconductors continuing to fall sliding 40% Y/Y for the first 20 days of September, is a stark divergence with the Philadelphia Stock Exchange Semiconductor Index (SOX) hovering around all-time highs. Particularly once you factor in the continued pressure on DRAM prices from July this year. Many companies in the market have been stockpiling inventory and holding off production cuts in the hope that this current slowdown is temporary, but this data doesn’t back that up and in that respect, it looks like the SOX index is hardly reflecting reality.


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.