July 2013 International Trade (Pulp, Paper & Paperboard)

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Exports of pulp, paper and paperboard increased by 146,000 metric tons (6.4 percent) in July. Imports also rose, but by a more modest 35,000 tons (4.7 percent). Exports were 12,000 tons (0.5 percent) below year-earlier levels while imports were 43,000 tons (5.2 percent) lower. Net exports jumped 7.3 percent relative to July, and were 1.9 percent above July 2012. Despite July’s increase, year-to-date net exports were running 4.7 percent behind the levels seen during the comparable period in 2012. 

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Year-to-date pulp exports (2,190 and 15,379 thousand tonnes for, respectively, July 2013 and YTD July 2013) are off 3.5 percent compared to the prior year’s pace. China is far and away the main destination for U.S. pulp exports, representing 57 percent so far this year. Four of the top five export destinations are lower on year-to-date basis; only India is up thus far. The Netherlands has posted the largest percentage drop (17.9 percent) among 2012’s top 10 destinations, and ranks 12^th YTD in 2013. Italy has posted the largest percentage increase (9.7 percent), but its ranking (sixth YTD in 2012) remains unchanged in 2013. 

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Year-to-date paper and paper board exports (221 and 1,529 thousand tonnes for July 2013 and YTD July 2013, respectively) are up nearly 8 percent. Mexico still is the chief destination for U.S. paper and paperboard exports in 2013. In July exports to Mexico increased compared to Canada, the second ranked destination. Despite Mexico’s increase in July, the YTD 2013 difference between the two is much narrower than was the case in 2012. Exports to Mexico on a year-to-date basis are down 4 percent compared to prior year exports while exports to Canada are nearly 67 percent higher on a year-to-date basis. Three regions are key importers of U.S. paper and paperboard: North America, Asia, and Latin America. U.S. exports to North America are up nearly 21 percent, Asia up by 4 percent, and Latin America down by 5 percent. In Asia, the big change is China; July’s year-over-year paper and paperboard exports to China were down 10 percent, but on a year-to-date basis exports remain up over 20 percent compared to prior year-to-date levels. 

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Year-to-date pulp imports (492 and 3,639 thousand tonnes for July 2013 and YTD July 2013, respectively) are 2.6 percent higher than the prior year’s level. Canada and Brazil account for 96 percent of total pulp imports in 2013. Brazil’s 2013 imports are 13.6 percent higher than 2012, Chile’s are 144.2 percent higher than its 2012 imports, and 2013 pulp imports from Mexico are up 52.1 percent year-to-date. Russia, which at this time last year was the ninth ranked source of pulp imports into the U.S. based on volume, has fallen to 14^th in 2013 thanks to a 91.7 percent drop. 

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Year-to-date paper and paperboard imports (284 and 1,803 thousand tonnes for July 2013 and YTD July 2013, respectively) increased by 2 percent. Canada is far and away the largest source of imported paper and paperboard, representing nearly 90 percent of total imports into the U.S. Among the top 10, Sweden, South Korea, and Brazil have all posted percentage drops over 10 percent. Finland, Germany, and India, all among the top 10 for 2013, have posted percentage increases of at least 20 percent year-to-date, with Mexico, the fifth ranked source of imports, posting a 16.5 percent increase.

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.