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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Monday, August 8, 2016

June 2016 International Trade (Softwood Lumber)

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Softwood lumber exports increased (+13 MMBF or 9.7%) in June while imports fell (-177 MMBF or 11.2%). Exports were 9 MMBF (6.5%) above year-earlier levels; imports were 235 MMBF (19.7%) higher. As a result, the year-over-year (YoY) net export deficit was 226 MMBF (21.3%) larger. The average net export deficit for the 12 months ending June 2016 was 29.7% higher than the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the graph above). 
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North America was the primary destination for U.S. softwood lumber exports in June (41.1%, of which Canada: 21.3%; Mexico: 19.9%). Asia (especially China: 15.5%) ranked second, with 30.7%. Year-to-date (YTD) exports to China were up 11.5% relative to the same months in 2015. Meanwhile, Canada was the source of nearly all (96.1%) softwood lumber imports into the United States. After a brief burst in May that rocketed it to the #2 spot YTD (from #26 in 2015, France has subsequently fallen to the #3 spot. Overall, YTD exports were down 0.1% compared to 2015, while imports were up 38.0%. 
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U.S. softwood lumber export activity through West Coast customs districts represented the largest proportion in June (35.0% of the U.S. total), although the Eastern and Gulf districts were not far behind (33.1% and 25.2%, respectively); Seattle maintained its dominance as the most active export district (22.6% of the U.S. total). At the same time, Great Lakes customs districts handled 67.0% of the softwood lumber imports -- most notably Duluth, MN (28.1%) -- coming into the United States. 
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Southern yellow pine comprised 33.5% of all softwood lumber exports in June, followed by Douglas-fir with 12.5%. Southern pine exports were up 11.6% YTD relative to 2015, while Doug-fir exports were down 15.7%.
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.

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