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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, February 17, 2018

December 2017 International Trade (Softwood Lumber)

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Softwood lumber exports retreated (11 MMBF or -7.0%) in December, while imports fell (97 MMBF or -7.1%). Exports were 16 MMBF (+12.9%) above year-earlier levels; imports were 15 MMBF (-1.2%) lower. As a result, the year-over-year (YoY) net export deficit was 31 MMBF (2.7%) smaller. Moreover, the average net export deficit for the 12 months ending December 2017 was 10.3% 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: 26.5%) and North America (of which Canada: 16.4%; Mexico: 16.3%) were the primary destinations for U.S. softwood lumber exports in December. Not surprisingly, in light of last summer’s hurricanes, the Caribbean ranked third with a 20.1% share. Year-to-date (YTD) exports to China were +22.9% relative to the same months in 2016. Meanwhile, Canada was the source of most (90.7%) of softwood lumber imports into the United States. Imports from Canada are 11.8% lower YTD than the same months in 2016. Overall, YTD exports were up 5.8% compared to 2016, while imports were down 8.8%. 
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U.S. softwood lumber export activity through the Eastern customs region represented the largest proportion in November (40.9% of the U.S. total), followed by the West Coast (28.0%) and the Gulf (23.4%) regions. Moreover, Seattle lost its lead (16.9% of the U.S. total) to Savannah (17.2%) as the single most-active district. At the same time, Great Lakes customs region handled 60.7% of softwood lumber imports -- most notably the Duluth, MN district (25.3%) -- coming into the United States. 
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Southern yellow pine comprised 35.4% of all softwood lumber exports in December, followed by other pine (15.4%), Douglas-fir (12.6%) and treated lumber (12.2%). Southern pine exports were up 9.4% YTD relative to 2016, while other pine: +112.7%; treated: +23.4%; Doug-fir: +8.8%.
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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