July 2013 International Trade (Softwood Lumber)

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Softwood lumber exports rose by 8 MMBF (5.7 percent) in July while imports increased by 116 MMBF (also 12.6 percent). Exports were 23 MMBF (17.6 percent) above year-earlier levels; imports were 73 MMBF (7.5 percent) higher. 

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Asia (especially China and Japan) reclaimed the “top spot” for U.S. softwood lumber exports in July, although North America (i.e., Canada and Mexico) ran a close second; as usual, Canada was the largest single-country destination. Meanwhile, Canada was far-and-away the largest source of softwood lumber imports into the United States. Imports from Romania, Austria, Estonia, Lithuania, Sweden and Malaysia have increased markedly on both year-over-year and year-to-date change bases. 

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Just over half of U.S. softwood lumber exports left the country through West Coast (primarily Seattle, WA) customs districts in July. Volume appears to have fallen off in the Columbia-Snake district; its ranking has fallen from 4^th to 8^th on a YTD basis despite an order-of-magnitude increase in July relative to the same month in 2012. At the same time, Great Lakes customs districts (especially Duluth, MN) handled most of the softwood lumber imports coming into the United States. The Charlotte district has seen traffic pick up this year (its ranking has improved from 24^th to 11^th); its ranking could be in jeopardy, however, given the almost complete collapse of imports through that port in July. 

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Douglas-fir made up just under one-quarter of all softwood lumber exports in July, followed by southern yellow pine. Hem-fir exports have jumped on a YTD basis, causing that species’ ranking to rise from 12^th to 8^th.

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.