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.