December 2014 International Trade (Softwood Lumber)

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Softwood lumber exports decreased by 2 MMBF (-1.8%) in December (the smallest volume since September 2012) while imports fell by 59 MMBF (5.9%). Exports were 29 MMBF (19.7%) below year-earlier levels; imports were 161 MMBF (18.0%) higher. 

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The rest of North America (i.e., Canada and Mexico) was once again the primary destination for U.S. softwood lumber exports in November (45.9%). Asia (especially China and Japan) was a distant second (32.7%). Canada was also the largest single-country destination (24.0%). Year to date (YTD), exports to China were -13.0% relative to the same period in 2013 (down from roughly +11% YOY as recently as September). Meanwhile, Canada was the source of nearly all (95.3%) softwood lumber imports into the United States. Overall, YTD exports were down 2.7% compared to the same period in 2013, while imports were up 11.1%. 

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Despite the port slowdown, U.S. softwood lumber export activity through West Coast customs districts increased in December (to roughly 39% of the U.S. total, from 35% in November); Seattle retained the title of most-active district, with 25.7% of the December total. At the same time, Great Lakes customs districts handled over 70% of the softwood lumber imports (especially Duluth, MN with 32%) coming into the United States. 

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Southern yellow pine comprised 22.7% of all softwood lumber exports in December, followed by Douglas-fir with 16.3%. YTD, southern pine exports were up 23.4% relative to the same months in 2013, while Douglas-fir exports were down 20.5%.

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.