June 2017 International Trade (Softwood Lumber)

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Softwood lumber exports increased (23 MMBF or +17.7%) in June, while imports fell (73 MMBF or -5.9%). Exports were 11 MMBF (+7.8%) above year-earlier levels; imports were 245 MMBF (-17.3%) lower. As a result, the year-over-year (YoY) net export deficit was 259 MMBF (-20.1%) smaller. Moreover, the average net export deficit for the 12 months ending June 2017 was 2.5% smaller 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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Asia (especially China: 18.5%) and North America (of which Canada: 18.2%; Mexico: 17.6%) were the primary destinations for U.S. softwood lumber exports in June. Year-to-date (YTD) exports to China were +10.0% relative to the same months in 2016. Meanwhile, Canada was the source of most (94.1%) of softwood lumber imports into the United States. Interestingly, imports from Canada are 14.4% lower YTD than the same months in 2016. Overall, YTD exports were up 1.7% compared to 2016, while imports were down 11.8%. 

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U.S. softwood lumber export activity through Eastern customs region represented the largest proportion in June (34.7% of the U.S. total), followed by the West Coast (31.3%) and the Gulf (28.4%) regions. However, Seattle maintained a small lead (20.3% of the U.S. total) over Mobile (19.0%) as the single most-active district. At the same time, Great Lakes customs region handled 65.4% of softwood lumber imports -- most notably the Duluth, MN district (30.5%) -- coming into the United States. 

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Southern yellow pine comprised 36.1% of all softwood lumber exports in June, followed by treated lumber (13.7%) and Douglas-fir (13.7%). Southern pine exports were up 4.2% YTD relative to 2016, while treated: +36.0%; Doug-fir: +3.5%.

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.