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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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Monday, August 13, 2018

June 2018 International Trade (Softwood Lumber)

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Softwood lumber exports extended their decline (25 MMBF or -15.6%) in June, joined by imports (-3 MMBF or -0.2%). Exports were 18 MMBF (-11.6%) below year-earlier levels; imports were 216 MMBF (+18.2%) higher. As a result, the year-over-year (YoY) net export deficit was 234 MMBF (22.8%) larger. However, the average net export deficit for the 12 months ending June 2018 was 7.2% 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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North America (of which Canada: 21.7%; Mexico: 16.4%) and Asia (especially China: 17.6%) were the primary destinations for U.S. softwood lumber exports in June; the Caribbean ranked third with an 18.7% share. Year-to-date (YTD) exports to China were +34.1% relative to the same months in 2017. Meanwhile, Canada was the source of most (90.5%) of softwood lumber imports into the United States. Imports from Canada are 6.0% lower YTD than the same months in 2017. Overall, YTD exports were up 13.2% compared to 2017, while imports were down 5.2%. 
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U.S. softwood lumber export activity through the Eastern customs region represented the largest proportion in June (35.7% of the U.S. total), followed closely by the West Coast (34.3%) and the Gulf (21.0%) regions. However, Seattle maintained its lead (21.5% of the U.S. total) over Mobile (13.9%) and Savannah (12.8%) as the single most-active district. At the same time, Great Lakes customs region handled 62.3% of softwood lumber imports -- most notably the Duluth, MN district (26.9%) -- coming into the United States. 
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Southern yellow pine comprised 27.9% of all softwood lumber exports in June, Douglas-fir (13.6%) and treated lumber (14.2%). Southern pine exports were up 23.2% YTD relative to 2017, while treated: +0.2%; Doug-fir: -5.0%.
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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