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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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Saturday, February 11, 2017

December 2016 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (13 MMBF or -9.7%) in December, while imports declined (38 MMBF or -2.9%). Exports were 2 MMBF (-1.2%) below year-earlier levels; imports were 77 MMBF (+6.5%) higher. As a result, the year-over-year (YoY) net export deficit was 79 MMBF (+7.4%) larger. The average net export deficit for the 12 months ending December 2016 was 26.1% 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 December (38.3%, of which Mexico: 20.1%; Canada: 18.2%). Asia (especially China: 19.5%) ranked second, with 35.4%. Year-to-date (YTD) exports to China were up 16.8% relative to the same months in 2015. Meanwhile, Canada was the source of nearly all (95.0%) softwood lumber imports into the United States; Imports from Canada are 22.5% higher YTD than the same months in 2015. Overall, YTD exports were down 2.8% compared to 2015, while imports were up 23.4%. 
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U.S. softwood lumber export activity through West Coast customs districts represented the largest proportion in December (35.0% of the U.S. total), the Eastern and Gulf districts lagged (30.1% and 27.6%, respectively); Seattle maintained its dominance as the most active export district (20.3% of the U.S. total). At the same time, Great Lakes customs districts handled 65.4% of softwood lumber imports -- most notably Duluth, MN (28.3%) -- coming into the United States. 
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Southern yellow pine comprised 33.9% of all softwood lumber exports in December, followed by Douglas-fir with 12.8%. Southern pine exports were up 12.9% YTD relative to 2015, while Doug-fir exports were down 20.2%.
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.

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