January 2017 International Trade (Softwood Lumber)

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Softwood lumber exports increased (3 MMBF or +2.1%) in January, while imports rose (46 MMBF or +3.6%). Exports were 5 MMBF (+3.7%) above year-earlier levels; imports were 52 MMBF (+4.2%) higher. As a result, the year-over-year (YoY) net export deficit was 48 MMBF (+4.2%) larger. The average net export deficit for the 12 months ending January 2017 was 23.7% 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 January (40.7%, of which Canada: 20.8%; Mexico: 20.0%). Asia (especially China: 19.9%) ranked second, with 36.7%. Year-to-date (YTD) exports to China were up 7.8% relative to the same months in 2016. Meanwhile, Canada was the source of nearly all (93.1%) softwood lumber imports into the United States; Imports from Canada are 1.9% higher YTD than the same months in 2016. Overall, YTD exports were up 3.7% compared to 2016, while imports were up 4.2%. 

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U.S. softwood lumber export activity through East Coast customs districts represented the largest proportion in January (35.5% of the U.S. total), the West Coast and Gulf districts lagged (30.8% and 26.0%, respectively); Seattle maintained a slim lead as the most active export district (18.0% of the U.S. total). At the same time, Great Lakes customs districts handled 62.9% of softwood lumber imports -- most notably Duluth, MN (27.3%) -- coming into the United States. 

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Southern yellow pine comprised 30.9% of all softwood lumber exports in January, followed by treated lumber (15.7%) and Douglas-fir (11.4%). Southern pine exports were up 1.8% YTD relative to 2016, while Doug-fir exports were down 32.6%.

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.