April 2018 International Trade (Softwood Lumber)

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Softwood lumber exports edged lower (3 MMBF or -1.6%) in April, but imports rose (93 MMBF or +7.5%). Exports were 43 MMBF (+35.0%) above year-earlier levels; imports were 123 MMBF (-8.4%) lower. As a result, the year-over-year (YoY) net export deficit was 166 MMBF (12.5%) smaller. Moreover, the average net export deficit for the 12 months ending April 2018 was 13.3% 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: 24.1%) and North America (of which Canada: 22.7%; Mexico: 14.1%) were the primary destinations for U.S. softwood lumber exports in April; the Caribbean ranked third with a 19.4% share. Year-to-date (YTD) exports to China were +54.6% 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 14.8% lower YTD than the same months in 2017. Overall, YTD exports were up 18.1% compared to 2017, while imports were down 14.0%. 

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U.S. softwood lumber export activity through the Eastern customs region represented the largest proportion in April (37.2% of the U.S. total), followed by the West Coast (29.5%) and the Gulf (23.3%) regions. However, Seattle maintained its lead (18.5% of the U.S. total) over Mobile (16.3%) and Savannah (11.3%) as the single most-active district. At the same time, Great Lakes customs region handled 63.5% of softwood lumber imports -- most notably the Duluth, MN district (27.1%) -- coming into the United States. 

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Southern yellow pine comprised 33.3% of all softwood lumber exports in April, Douglas-fir (11.5%) and treated lumber (12.5%). Southern pine exports were up 39.8% YTD relative to 2017, while treated: +3.5%; Doug-fir: -1.8%.

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.