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.