Korea's won-based import price index fell 2.4% month on month in August 2026, its third consecutive decline. Yet it remained 15.6% above a year earlier, while raw-material prices rose 1.5% from July. The decision signal is not simply “costs are falling”; currency translation and individual product prices moved in sharply different directions.
- Import prices: -2.4% month on month, +15.6% year on year
- Raw materials +1.5%; intermediate goods -4.0%; capital goods -4.2%; consumer goods -4.4%
- Chemicals -6.1%; primary metals -4.2%; coal and petroleum products +3.6%
- Monthly average USD/KRW: 1,497.4 to 1,406.3, down 6.1%
- Dubai crude: USD 76.75 to USD 88.75 per barrel, up 15.6%
Unless noted otherwise, changes are month on month. The figures are preliminary and may be revised.
1. The currency effect drove the headline decline
The won strengthened 6.1% against the dollar while Dubai crude rose 15.6%. A stronger won lowered the translated cost of dollar-priced imports, but higher crude and mining-product prices still pushed raw materials up 1.5%. The headline index therefore does not justify assuming that every input cost has fallen.
2. Chemicals and metals offer a negotiation window
| Product signal | August change | Practical response |
|---|---|---|
| Chemicals | -6.1% | Check FX pass-through timing and use the gap in new-order negotiations. |
| Primary metals | -4.2% | Recalculate LME reference, premium, FX and processing fees separately. |
| Coal and petroleum | +3.6% | Review energy and freight exposure; the stronger won did not fully offset the rise. |
| Raw materials overall | +1.5% | Do not treat lower finished-input indices as lower feedstock costs. |
Imported resins, plating chemicals, copper alloys and stainless steel can have different currencies, formulas and pass-through lags. The data supports reopening the cost breakdown, not demanding one blanket reduction from every supplier.
3. Exporters must separate translation from pricing power
Won-based export prices fell 3.7% month on month, while contract-currency export prices rose 2.2%. That divergence means a manufacturer can maintain or raise its foreign-currency selling price yet still report lower won-translated revenue and margins. The won-based declines in chemicals (-5.3%), computers/electronics/optical equipment (-3.1%) and transportation equipment (-5.4%) should not be read as demand weakness alone.
Trade volumes were strong: export volume rose 25.9% and import volume 12.0% year on year. Korea's net barter terms-of-trade index increased 27.1%, and the income terms-of-trade index rose 60.0%. These are economy-wide indicators and do not guarantee better margins for an individual firm.
Business impact
Confirm when August's average FX rate enters September invoices. Push for evidence-based adjustments in chemicals and metals, while validating the oil component separately.
Respond to blanket customer price-cut requests with product-specific indices and actual settlement FX. Separate currency, metal/resin benchmarks and processing fees in quotations.
A stronger won reduces dollar purchase costs but also lowers won-translated export proceeds. Manage net exposure by currency and week across the next eight weeks.
This week's action checklist
- Map major imports to raw-material, intermediate and capital-goods indices.
- Break supplier invoices into benchmark, FX, premium, logistics and processing fees.
- Verify whether the July-to-August FX decline appears in September orders.
- Calculate the FX benefit and crude-price impact separately for oil-linked inputs.
- Review both contract-currency revenue and won-translated export margins.
- Add reference FX, benchmark price, validity and reopening clauses to quotations.
- Use backlog and inventory days to stage purchases rather than expanding stock broadly.
BIZPECTRA view
The August release creates a short negotiation window, but it is too early to call broad cost stability. Import prices remain in double-digit year-on-year growth and oil has rebounded sharply. Manufacturers should secure the benefit of a stronger won without leaving oil exposure unmanaged.
- Bank of Korea — August 2026 Export and Import Price Indices and Trade Indices (preliminary), September 15, 2026
- Yonhap News Agency — detailed Bank of Korea data and product breakdown, September 15, 2026
Statistical figures follow the Bank of Korea release. Company actions and checklists are BIZPECTRA analysis; actual impact varies by contract and cost structure.
CHEMNEX reviews the real cost structure of STS, copper alloys, PPS/PPA, plating chemicals and Ni/Au roll-to-roll plating across FX, metals and yield.
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