March 2018 International Trade (Softwood Lumber)

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Softwood lumber exports advanced (22 MMBF or +14.7%) in March, and imports rose (226 MMBF or +22.2%). Exports were 24 MMBF (+16.7%) above year-earlier levels; imports were 130 MMBF (-9.5%) lower. As a result, the year-over-year (YoY) net export deficit was 154 MMBF (12.6%) smaller. Moreover, the average net export deficit for the 12 months ending March 2018 was 12.1% 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: 23.0%) and North America (of which Canada: 22.1%; Mexico: 14.3%) were the primary destinations for U.S. softwood lumber exports in March; the Caribbean ranked third with a 20.9% share. Year-to-date (YTD) exports to China were +47.6% relative to the same months in 2017. Meanwhile, Canada was the source of most (91.5%) of softwood lumber imports into the United States. Imports from Canada are 15.4% lower YTD than the same months in 2017. Overall, YTD exports were up 12.8% compared to 2017, while imports were down 16.0%. 

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U.S. softwood lumber export activity through the Eastern customs region represented the largest proportion in March (39.2% of the U.S. total), followed by the West Coast (28.8%) and the Gulf (22.2%) regions. However, Seattle regained its lead (17.9% of the U.S. total) over Mobile (14.8%) and Savannah (13.8%) as the single most-active district. At the same time, Great Lakes customs region handled 64.3% of softwood lumber imports -- most notably the Duluth, MN district (26.5%) -- coming into the United States. 

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Southern yellow pine comprised 36.0% of all softwood lumber exports in March, Douglas-fir (11.6%) and treated lumber (12.6%). Southern pine exports were up 34.3% YTD relative to 2017, while treated: +2.7%; Doug-fir: -6.7%.

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.