September 2016 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (-2 MMBF or 1.2%) in September, while imports declined (-38 MMBF or 2.8%). Exports were 11 MMBF (9.1%) above year-earlier levels; imports were 80 MMBF (6.4%) higher. As a result, the year-over-year (YoY) net export deficit was 69 MMBF (6.1%) larger. The average net export deficit for the 12 months ending September 2016 was 31.4% 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 September (42.6%, of which Mexico: 21.9%; Canada: 20.7%). Asia (especially China: 20.4%) ranked second, with 35.5%. Year-to-date (YTD) exports to China were up 16.7% relative to the same months in 2015. Meanwhile, Canada was the source of nearly all (95.9%) softwood lumber imports into the United States. Overall, YTD exports were up 2.1% compared to 2015, while imports were up 30.9%. 

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U.S. softwood lumber export activity through West Coast customs districts represented the largest proportion in September (34.9% of the U.S. total), although the Eastern and Gulf districts were not far behind (30.4% and 27.1%, respectively); Seattle maintained its dominance as the most active export district (21.9% of the U.S. total). At the same time, Great Lakes customs districts handled 65.1% of the softwood lumber imports -- most notably Duluth, MN (28.1%) -- coming into the United States. 

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Southern yellow pine comprised 32.0% of all softwood lumber exports in September, followed by Douglas-fir with 12.9%. Southern pine exports were up 13.3% YTD relative to 2015, while Doug-fir exports were down 17.2%.

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.