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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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Tuesday, October 17, 2017

August 2017 International Trade (Softwood Lumber)

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Softwood lumber exports increased (24 MMBF or +17.8%) in August, while imports slipped (16 MMBF or -1.4%). Exports were 23 MMBF (+17.1%) above year-earlier levels; imports were 213 MMBF (-15.5%) lower. As a result, the year-over-year (YoY) net export deficit was 237 MMBF (-19.1%) lower. Moreover, the average net export deficit for the 12 months ending August 2017 was 8.9% 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: 23.3%) and North America (of which Canada: 17.1%; Mexico: 21.6%) were the primary destinations for U.S. softwood lumber exports in August. Year-to-date (YTD) exports to China were +17.2% relative to the same months in 2016. Meanwhile, Canada was the source of most (90.8%) of 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 4.0% compared to 2016, while imports were down 12.7%. 
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U.S. softwood lumber export activity through Eastern customs region represented the largest proportion in August (38.6% of the U.S. total), followed by the West Coast (32.4%) and the Gulf (22.6%) regions. However, Seattle maintained a small lead (17.7% of the U.S. total) over Mobile (12.5%) as the single most-active district. At the same time, Great Lakes customs region handled 64.0% of softwood lumber imports -- most notably the Duluth, MN district (27.7%) -- coming into the United States. 
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Southern yellow pine comprised 30.0% of all softwood lumber exports in August, followed by treated lumber (15.1%) and Douglas-fir (13.9%). Southern pine exports were up 8.3% YTD relative to 2016, while treated: +31.6%; Doug-fir: +6.9%.
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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