Credit trends for Korean corporates are less favorable heading into 2025, with a skew toward a negative outlook. Soft domestic demand, unfavorable demand-supply for cyclical sectors, and policy uncertainties are causing an unfavorable operational backdrop for many companies. Operating performances and resulting ratings headroom will likely differ by sectors, however. Electric vehicle battery makers, steel, and chemical companies are under most immediate downward pressure. EV battery makers are facing challenges due to slowdown in EV demand in the U.S. and European market heading into 2025, while their debts are rising on on-going capacity investments. Steel and chemical companies face weaker prices, due to increasing supply from China, while demand remains soft. Meanwhile, auto original equipment manufacturers will likely show resilience, despite tougher operating conditions, thanks to their competitive products across hybrid and EV, and favorable geographical mix.