South Korea’s stock market faces a credit-pool crisis, and the scale of forced liquidation in July has already reached 344.2 billion won.

BlockBeats message: On July 13, according to data from the Korea Financial Investment Association, the recent sharp decline in the Korean stock market has triggered margin calls to accelerate deleveraging. The total size of forced liquidations in July has already reached 344.2 billion KRW, including 142.2 billion KRW on July 9 alone. Since forced liquidation data has a two-trading-day lag, the clearing pressure caused by the near 9% plunge in the KOSPI on July 13 has not yet been fully reflected. The market expects that the forced liquidation amount will rise further afterward.

On July 13, the Korean KOSPI index closed down 8.95%, and during the session, the sell-side order pause mechanism (Sidecar) and the primary circuit breaker mechanism (Circuit Breaker) were triggered. The semiconductor sector saw a major drop, with SK hynix down 15.37%, marking the largest single-day decline on record, and Samsung Electronics down 10.7%.

Meanwhile, the margin balance of Korean retail investors, the outstanding balance of credit financing, and investors’ deposits have all continued to decline. The market is getting stuck in a deleveraging cycle of “falling stock prices—forced liquidation—further declines.”