February 2018 International Trade (Softwood Lumber)

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Softwood lumber exports advanced (15 MMBF or +11.5%) in February, while imports fell (130 MMBF or -11.3%). Exports were 21 MMBF (+16.5%) above year-earlier levels; imports were 361 MMBF (-26.2%) lower. As a result, the year-over-year (YoY) net export deficit was 382 MMBF (30.6%) smaller. Moreover, the average net export deficit for the 12 months ending February 2018 was 12.8% 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: 27.0%) and North America (of which Canada: 18.1%; Mexico: 14.6%) were the primary destinations for U.S. softwood lumber exports in February; the Caribbean ranked third with a 20.2% share. Year-to-date (YTD) exports to China were +34.0% relative to the same months in 2017. Meanwhile, Canada was the source of most (90.2%) of softwood lumber imports into the United States. Imports from Canada are 16.7% lower YTD than the same months in 2017. Overall, YTD exports were up 10.6% compared to 2017, while imports were down 19.4%. 

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U.S. softwood lumber export activity through the Eastern customs region represented the largest proportion in February (40.4% of the U.S. total), followed by the West Coast (28.0%) and the Gulf (23.3%) regions. Moreover, Mobile regained its lead (16.7% of the U.S. total) over Seattle (16.0%) and Savannah (11.2%) 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 (24.8%) -- coming into the United States. 

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Southern yellow pine comprised 37.2% of all softwood lumber exports in February, Douglas-fir (12.1%) and treated lumber (14.8%). Southern pine exports were up 31.0% YTD relative to 2017, while treated: +1.1%; Doug-fir: -0.6%.

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.