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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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Saturday, January 13, 2018

November 2017 International Trade (Softwood Lumber)

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Softwood lumber exports inched up (1 MMBF or +0.8%) in November, while imports fell (43 MMBF or -3.1%). Exports were 13 MMBF (+9.5%) above year-earlier levels; imports were 44 MMBF (+3.4%) higher. As a result, the year-over-year (YoY) net export deficit was 31 MMBF (2.7%) larger. However, the average net export deficit for the 12 months ending November 2017 was 9.6% 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: 22.8%) and North America (of which Canada: 17.5%; Mexico: 17.0%) were the primary destinations for U.S. softwood lumber exports in November. Not surprisingly, in light of last summer’s hurricanes, the Caribbean ranked third with a 22.4% share. Year-to-date (YTD) exports to China were +20.2% relative to the same months in 2016. Meanwhile, Canada was the source of most (91.3%) of softwood lumber imports into the United States. Interestingly, imports from Canada are 12.3% lower YTD than the same months in 2016. Overall, YTD exports were up 5.2% compared to 2016, while imports were down 9.4%. 
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U.S. softwood lumber export activity through the Eastern customs region represented the largest proportion in November (38.0% of the U.S. total), followed by the West Coast (29.0%) and the Gulf (25.5%) regions. However, Seattle maintained a modest lead (17.4% of the U.S. total) over Mobile (17.0%) and Savannah (13.4%) as the single most-active district. At the same time, Great Lakes customs region handled 62.9% of softwood lumber imports -- most notably the Duluth, MN district (27.8%) -- coming into the United States. 
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Southern yellow pine comprised 29.5% of all softwood lumber exports in November, followed by other pine (16.7%), treated lumber (15.9%) and Douglas-fir (12.5%). Southern pine exports were up 8.6% YTD relative to 2016, while other pine: +107.0%; treated: +25.0%; Doug-fir: +8.7%.
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.

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