May 2013 International Trade (Pulp, Paper & Paperboard)

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Exports of pulp, paper and paperboard decreased by 2,000 metric tons (less than 0.1 percent) in May. Imports rose by 7,000 tons (0.9 percent). Exports were 13,000 tons (0.5 percent) above a year earlier while imports were up by 46,000 tons (6.0 percent).

Since registering a significant month-over-month advance in December 2012, four of five months in 2013 have posted declines in net exports. The erosion is due to both declining exports (a 13 percent drop between December 2012 and May 2013) and increasing imports (a 15 percent advance between December 2012 and May 2013). The pattern speaks to sluggish global growth, dampening exports, and a stronger U.S. dollar against most currencies (the latter reduces the cost of imports into the United States).

Net exports in May were 2 percent below year-ago levels, extending 2013's track record of lower-than-prior-year performance in every month of 2013. Not surprisingly then, net exports are off prior year-to-date levels by 5.6 percent. However, May extended April's progress in narrowing the gap between year-to-date performance compared to prior year-to-date performance: March gap 7.8 percent, April gap 6.4 percent, and May gap 5.6 percent. 

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Year-to-date pulp exported from the U.S. was 11.14 million metric tons; over 55 percent has been sold to China. The rank order of the top 10 destinations between 2012 and 2013 was essentially unchanged. Within 2013's top 10, Indonesia registered the largest percentage gain in year-to-date shipments over the previous year (13.3 percent) while Canada registered the largest decline (10.3 percent). 

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Year-to-date paper and paperboard exported from the U.S. was 1.09 million metric tons. Mexico and Canada were nearly even matched as priority destinations of U.S. paper and paperboard (respectively, 22.4 and 21.0 percent of total exports). Canada's surge is significant, an increase of nearly 83 percent relative to 2012. Costa Rica, which was the sixth-ranked destination in 2012 has dropped to number 10 in 2013 while Guatemala, ranked number 11 in 2012, has moved up to number 8 in 2013. 

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The United States has imported 2.67 million metric tons of pulp year to date. Canada (65.2 percent) and Brazil (31.2 percent) accounted for over 96 percent of  year-to-date U.S. pulp imports. In terms of top-10 rank, Indonesia made an appearance at number 10 after having exported no pulp to the United States during 2012. 

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The United States has imported 1.25 million metric tons of paper and paperboard year-to-date, nearly 90 percent of which came from Canada. Among the top 10 countries of origin in 2013, France posted the largest year-to-date percentage increase (50.5 percent) compared to the same period last year, while South Korea posted the largest percentage decline (36.8 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.