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Saturday, April 8, 2017

February 2017 International Trade (Softwood Lumber)

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Softwood lumber exports increased (less than 1 MMBF or 0.1%) in February, while imports rose (71 MMBF or 5.4%). Exports were 14 MMBF (10.0%) below year-earlier levels; imports were 241 MMBF (14.9%) lower. As a result, the year-over-year (YoY) net export deficit was 227 MMBF (15.4%) smaller. However, the average net export deficit for the 12 months ending February 2017 was 16.1% greater 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 (of which Mexico: 20.4%; Canada: 18.6%) and Asia (especially China, the top single-country destination with 22.0%) were essentially evenly split as primary destinations for U.S. softwood lumber exports in February -- each with 39.0%. Year-to-date (YTD) exports to China were up 6.9% relative to the same months in 2016. Meanwhile, Canada was the source of nearly all (80.1%) softwood lumber imports into the United States. Interestingly, imports from Canada are 16.4% lower YTD than the same months in 2016. Overall, YTD exports were down 3.6% compared to 2016, while imports were down 6.6%. 
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U.S. softwood lumber export activity through East Coast customs districts represented the largest proportion in February (38.8% of the U.S. total), the West Coast district came in a close second (35.4%) while the Gulf district lagged (20.0%); however, Seattle maintained a sizeable lead as the most active export district (22.2% of the U.S. total). At the same time, Great Lakes customs districts handled 57.8% of softwood lumber imports -- most notably Duluth, MN (26.13%) -- coming into the United States. 
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Southern yellow pine comprised 29.3% of all softwood lumber exports in February, followed by treated lumber (15.9%) and Douglas-fir (15.5%). Southern pine exports were up 0.5% YTD relative to 2016, while Doug-fir exports were down 9.9%.
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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