December 2012 International Trade

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December exports of $186.4 billion and imports of $224.9 billion resulted in a goods and services deficit of $38.5 billion, down from $48.6 billion in November (revised). December exports were $3.9 billion more than November exports of $182.5 billion. December imports were $6.2 billion less than November imports of $231.1 billion. The deficit fell to its lowest level since January 2010 largely on exports of petroleum products and commercial jetliners.

Interestingly, China reported a December trade surplus with the United States of $18.7 billion at the same time the United States reported a Chinese trade deficit of $24.5 billion. This disparity has been an ongoing problem, and is of sufficient magnitude to influence U.S. GDP estimates.

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Exports of pulp, paper and paperboard advanced by 261,000 tons (10.4 percent). Imports, meanwhile, fell by 117,000 tons (14.3 percent). Exports were 46,000 tons (1.7 percent) higher than a year earlier while imports were down by 67,000 tons (8.8 percent). 

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U.S. pulp exports to China were nearly an order of magnitude larger than exports to the second-largest country in the list above (i.e., Mexico), and nearly on par year-to-date with 2011. Asia is the destination for over three-fourths of U.S. pulp exports, with the rest of North America running a distant second. 

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Paper and paperboard exports are somewhat more evenly split; the combination of Mexico and Canada receive a little more than one-third of U.S. exports, while Asia (especially India and Japan) is the destination for just under a third. 

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Canada supplies over two-thirds of pulp imports into the United States, followed distantly by Brazil. 

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Pegging at nearly 90 percent, Canada absolutely dominates paper and paperboard imports into the United States.

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Softwood lumber exports rose by 12 MMBF (9.2 percent) in December while imports shed 83 MMBF (10.1 percent). Exports were 20 MMBF (15.8 percent) higher than year-earlier levels; imports were 58 MMBF (7.3 percent) lower. 

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North America (Canada and Mexico), followed by Asia (especially China and Japan), continue to be the primary destinations for U.S. softwood lumber exports. Meanwhile, Canada is far-and-away the largest source of softwood lumber imports into the United States. 

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Just over half of U.S. softwood lumber exports left the country through West Coast (especially Seattle, WA) customs districts during 2012. At the same time, however, Great Lakes customs districts (especially Duluth, MN) handled most of the softwood lumber imports coming into the United States. 

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Douglas-fir made up nearly one-quarter of all softwood lumber exports for all of 2012, followed by southern yellow pine. 

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On a global scale, data compiled by the Netherlands Bureau for Economic Policy Analysis showed that world trade volume increased by 0.8 percent in November while prices fell by nearly 1.0 percent.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.