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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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Wednesday, June 7, 2017

April 2017 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (22 MMBF or -14.9%) in April, while imports rose (86 MMBF or +6.3%). Exports were 4 MMBF (-3.0) below year-earlier levels; imports were 6 MMBF (+0.4%) higher. As a result, the year-over-year (YoY) net export deficit was 10 MMBF (+0.7%) larger. Moreover, the average net export deficit for the 12 months ending April 2017 was 7.1% 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 Canada: 21.2%; Mexico: 20.8%) and Asia (especially China: 18.3%) were the primary destinations for U.S. softwood lumber exports in April. Year-to-date (YTD) exports to China were somewhat higher (+4.5%) relative to the same months in 2016. Meanwhile, Canada was the source of nearly all (95.0%) softwood lumber imports into the United States. Interestingly, imports from Canada are 11.8% lower YTD than the same months in 2016. Overall, YTD exports were up 0.3% compared to 2016, while imports were down 7.8%. 
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U.S. softwood lumber export activity through Eastern customs region represented the largest proportion in April (35.2% of the U.S. total); the West Coast (31.8%) and the Gulf (25.1%) regions followed close behind. However, Seattle maintained a sizeable lead as the single most-active district (20.3% of the U.S. total). At the same time, Great Lakes customs region handled 66.4% of softwood lumber imports -- most notably the Duluth, MN district (28.7%) -- coming into the United States. 
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Southern yellow pine comprised 28.3% of all softwood lumber exports in April, followed by treated lumber (15.9%) and Douglas-fir (13.4%). Southern pine exports were up 3.5% YTD relative to 2016, while Doug-fir exports were down 4.5%; treated: +39.5%.
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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