South Korea’s exports are headed for another monthly drop amid slowing economic growth in China and weak demand for semiconductors, preliminary trade data for March shows.

The preliminary data - for the first 20 days of the month - saw exports fell 4.9% from a year earlier, putting them on course for a fourth consecutive monthly decline.

Imports in the first 20 days of March fell 3.4%, from a year earlier.

Shipments to China slid 12.6% while overall sales of semiconductors, a key driver of Korea’s economy, decreased by 25& - the biggest YoY decline since March 2009...

South Korea is one of the world’s key component suppliers in the tech sector and the continued slowdown in the expansion of semiconductor exports deepens concerns about the outlook for the global technology industry.

Not helped by the plunge in DRAM prices...

As a reminder, South Korea releases its trade data earlier than most other major economies and is a key link in the global supply chain, making it a bellwether for trade.

"Beijing is Seoul’s largest trading partner, with exports to China amounting to about 10 percent of Korea’s GDP," said Bloomberg Economics’ Justin Jimenez. "Our base case is that a continued cool down in Sino-U.S. tensions will provide some relief to China’s economy -- and in turn, South Korea’s. A breakdown in talks though, remains the key risk."

Bloomberg's Justin Jimenez notes that “a double-digit drop in South Korea’s exports in February highlights risks for the trade-oriented economy..." but offers a glimpse at a potential green shoot - based on actual data - "...though a potential recovery in semiconductor demand and signs of stabilization in China’s economy may help to support South Korea’s exports in 2H.”

South Korea’s economic growth rate has been slowing and is likely to continue to do so unless there is a pickup in exports. A delegation from the International Monetary Fund said last week that Korea’s economy faces headwinds and should consider a “substantial” supplementary budget to meet its growth target of 2.6 percent to 2.7 percent for this year.