October 2013 International Trade (Pulp, Paper & Paperboard)

Click image for larger view

Exports of pulp, paper and paperboard increased by 129,000 metric tons (5.6 percent) in October. Imports also rose, but by a more modest 12,000 tons (1.5 percent). Exports were 156,000 tons (6.0 percent) below year-earlier levels while imports were 40,000 tons (5.3 percent) higher. Net exports jumped 7.7 percent relative to September, but were 10.7 percent below October 2012. Despite October’s increased exports, year-to-date (YTD) net exports were running 6.0 percent behind the levels seen during the comparable period in 2012. 

Click image for larger view

YTD pulp exports (21.904 million metric tons) are off 3.6 percent compared to the prior year's pace. China is far and away the main destination for U.S. pulp exports, representing 58 percent of 2013's U.S. pulp exports. Four of the top five export destinations are lower on a YTD basis; only India is up thus far by just over 1 percent. Among the top 10 destinations in 2012, the Netherlands has posted the largest YTD percentage drop (18.1 percent), and ranks 11th in 2013 (compared to 10th in 2012). Indonesia, by contrast, has posted the largest YTD percentage increase (9.7 percent), but fell from being ranked 9th destination of U.S. pulp exports in 2012 to the 10th ranked destination in 2013. 

Click image for larger view

YTD paper and paperboard exports (2.169 million tonnes) are up nearly 7 percent. Mexico is the chief destination of U.S. paper and paperboard exports in 2013. However, Canada, the second ranked destination, has been closing in on Mexico. Canada YTD increase is 52.5 percent while Mexico's YTD change is essentially flat. On a regional basis there are three key regions for U.S. paper and paperboard exports: North America, Asia, and Latin America. North America exports are up over 20 percent, Asia up by nearly 3 percent, and Latin America down by over six percent. Canada is the change driver in North America's increase. In Asia, the big change is China where YTD levels in 2013 are up over 20 percent compared to prior YTD levels. Latin America's drop is spread between reduced purchases of U.S. paper and paperboard in Brazil, Costa Rica, Venezuela, and El Salvador. 

Click image for larger view

YTD pulp imports (5.314 million tonnes) are 5.0 percent higher than the prior year's level. Canada and Brazil account for 97 percent of total pulp imports in 2013. Brazil's 2013 imports are 17.2 percent higher than 2012, Chile's are 146.2 percent higher than its 2012 imports, and 2013 pulp imports from Mexico are up 41.1 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 14th in 2013 on a 92.2 percent drop. 

Click image for larger view

YTD paper and paperboard imports (2.653 million tonnes) increased by 3.8 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. Country rankings of the top 11 are identical between 2012 and 2013. Among the top 10 in 2013, 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 YTD, with Indonesia, the eighth ranked source of imports, posting a 9.6 percent increase. Other noteworthy moves below the top 10 are Japan, ranked 12th in 2013 with an over 300 percent increase in imports compared to 2012's YTD level, Austria, ranked 14th in 2013 with an 779 percent increase in imports compared to 2012's YTD level, and Thailand, ranked 18th in 2013 with an over 1,100 percent increase in imports compared to 2012's YTD level.

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.