South Korea’s Petrochemical Exports Plunge 18.7% in August Despite Semiconductor and Auto Boom

South Korea’s petrochemical sector suffered a sharp setback in August, even as semiconductors and automobiles hit record highs. Official data from the Ministry of Trade, Industry and Energy showed that petrochemical exports tumbled 18.7% year-on-year to $3.38 billion, underscoring the sector’s vulnerability amid global headwinds and trade frictions.

By contrast, semiconductor exports surged 27.1% to $15.1 billion, while automobile exports reached an all-time monthly high of $5.5 billion, driven by robust demand for hybrid, electric, and even used cars. Yet the strength in these high-tech and mobility segments was not enough to offset petrochemicals’ slump.

Trade Frictions Cast a Shadow 

Overall, South Korea’s total exports in August grew just 1.3% year-on-year to $58.4 billion, a marked slowdown, while imports fell 4.0% to $51.9 billion. As a result, the trade surplus narrowed to $6.51 billion.

The weak performance was compounded by U.S. tariff measures. The Trump administration’s decision to slap 50% tariffs on steel and aluminum exports weighed heavily, and as of August 7, an additional 15% surcharge on Korean goods came into effect, further dragging shipments.

Petrochemicals: Structural Weakness Exposed

Petrochemicals, once a backbone of Korea’s industrial exports, are being squeezed on multiple fronts: global oversupply, weak demand, and rising competition from the Middle East and China. The steep August decline highlights just how far the sector has diverged from Korea’s booming semiconductor and auto industries.

Manufacturing PMI Signals Ongoing Strain

S&P Global data show South Korea’s manufacturing PMI in August edged up slightly to 48.3, but remained below the 50 threshold for expansion. Both output and new orders continued to contract, with companies citing weak domestic conditions compounded by tariff pressure as key drags on production and sales.

Outlook

While Korea’s high-tech exports remain resilient, petrochemicals are becoming a weak link in the country’s trade portfolio. Unless global demand improves or new trade terms are negotiated, the sector’s decline could weigh further on Korea’s overall export momentum in the coming months.

In short: South Korea’s August trade data reveal a two-speed economy—chips and cars powering ahead, while petrochemicals sink deeper into trouble under the twin pressures of oversupply and tariffs.