August 2016 International Trade (Softwood Lumber)

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Softwood lumber exports increased (+6 MMBF or 5.0%) in August, while imports declined (-16 MMBF or 1.2%). Exports were 13 MMBF (10.3%) above year-earlier levels; imports were 175 MMBF (14.6%) higher. As a result, the year-over-year (YoY) net export deficit was 361 MMBF (40.1%) larger. The average net export deficit for the 12 months ending August 2016 was 32.9% 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 August (48.7%, of which Mexico: 26.3%; Canada: 22.4%). Asia (especially China: 18.4%) ranked second, with 34.3%. Year-to-date (YTD) exports to China were up 15.8% relative to the same months in 2015. Meanwhile, Canada was the source of nearly all (95.4%) softwood lumber imports into the United States. Overall, YTD exports were up 1.3% compared to 2015, while imports were up 34.5%. 

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U.S. softwood lumber export activity through West Coast customs districts represented the largest proportion in August (39.0% of the U.S. total), although the Eastern and Gulf districts were not far behind (28.4% and 24.7%, respectively); Seattle maintained its dominance as the most active export district (25.0% of the U.S. total). At the same time, Great Lakes customs districts handled 66.0% of the softwood lumber imports -- most notably Duluth, MN (30.8%) -- coming into the United States. 

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Southern yellow pine comprised 27.7% of all softwood lumber exports in August, followed by Douglas-fir with 14.1%. Southern pine exports were up 13.0% YTD relative to 2015, while Doug-fir exports were down 17.5%.

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.