March 2017 International Trade (Softwood Lumber)

Click image for larger view 

Click image for larger view

Softwood lumber exports increased (+19 MMBF or 14.5%) in March, while imports fell (-5 MMBF or 0.4%). Exports were 15 MMBF (11.2%) above year-earlier levels; imports were 283 MMBF (17.1%) lower. As a result, the year-over-year (YoY) net export deficit was 298 MMBF (19.5%) smaller. Moreover, the average net export deficit for the 12 months ending March 2017 was 9.9% greater than the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the graph above). 

Click image for larger view

North America (of which Mexico: 21.6%; Canada: 19.8%) and Asia (especially China: 14.8%) were the primary destinations for U.S. softwood lumber exports in March. Year-to-date (YTD) exports to China were essentially flat (+0.1%) relative to the same months in 2016. Meanwhile, Canada was the source of nearly all (95.3%) softwood lumber imports into the United States. Interestingly, imports from Canada are 15.7% lower YTD than the same months in 2016. Overall, YTD exports were up 1.3% compared to 2016, while imports were down 10.4%. 

Click image for larger view 

Click image for larger view

U.S. softwood lumber export activity through West Coast customs districts represented the largest proportion in March (32.4% of the U.S. total); the Gulf (31.4%) and the Eastern (28.9%) districts followed close behind. However, Seattle maintained a sizeable lead as the most active export district (21.4% of the U.S. total). At the same time, Great Lakes customs districts handled 67.1% of softwood lumber imports -- most notably Duluth, MN (29.2%) -- coming into the United States. 

Click image for larger view 

Click image for larger view

Southern yellow pine comprised 30.0% of all softwood lumber exports in March, followed by Douglas-fir (16.1%) and treated lumber (13.9%). Southern pine exports were up 6.0% YTD relative to 2016, while Doug-fir exports were down 4.0%; treated: +49.7%.

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.