A worsening underlying trend in Korean exports, masked by 1 time surge in November vessel delivery

Korea's November exports dropped 4.7%, coming in above expectations. However, there is no reason for optimism. The 133% yoy surge in vessel deliveries was the main lift, which has come in November's last 10 days.

Exports rose 5.6% MoM on a seasonally adjusted basis, alternating between contraction and growth, which is an indication of fragile producer confidence in global outlook.

The PMIs, which remained flat at 49.1, suggest that inventories are now constraining production, which makes a year-end pick up in production unlikely.

"Looking ahead into early 2016, we expect a gradual improvement, helped by two factors: 1) the gradual destocking of inventories; and 2) a ramp up in 3D memory chip output by Korean companies in China", says Barclays in a research note.