November 2016 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (3 MMBF or -2.3%) in November, while imports declined (96 MMBF or -6.9%). Exports were 12 MMBF (+9.9%) above year-earlier levels; imports were 33 MMBF (-2.5%) lower. As a result, the year-over-year (YoY) net export deficit was 46 MMBF (-3.8%) smaller. The average net export deficit for the 12 months ending November 2016 was 26.7% 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 November (39.5%, of which Canada: 20.7%; Mexico: 18.8%). Asia (especially China: 20.8%) ranked second, with 36.8%. Year-to-date (YTD) exports to China were up 19.4% relative to the same months in 2015. Meanwhile, Canada was the source of nearly all (95.3%) softwood lumber imports into the United States; Imports from Canada are 24.1% higher YTD than the same months in 2015. Overall, YTD exports were down 21.5% compared to 2015, while imports were up 25.0%. 

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U.S. softwood lumber export activity through West Coast customs districts represented the largest proportion in September (35.9% of the U.S. total), the Eastern and Gulf districts lagged (33.3% and 22.2%, respectively); Seattle maintained its dominance as the most active export district (22.4% of the U.S. total). At the same time, Great Lakes customs districts handled 66.2% of softwood lumber imports -- most notably Duluth, MN (29.6%) -- coming into the United States. 

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Southern yellow pine comprised 30.8% of all softwood lumber exports in November, followed by Douglas-fir with 14.6%. Southern pine exports were up 11.4% YTD relative to 2015, while Doug-fir exports were down 18.0%.

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.