Wednesday, October 10, 2018

August 2018 International Trade (Softwood Lumber)

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Softwood lumber exports turned higher (12 MMBF or +9.1%) in August, while imports declined (20 MMBF or -1.5%). Exports were 17 MMBF (-10.6%) below year-earlier levels; imports were 182 MMBF (+15.7%) higher. As a result, the year-over-year (YoY) net export deficit was 199 MMBF (19.9%) larger. However, the average net export deficit for the 12 months ending August 2018 was 1.3% 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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North America (of which Canada: 24.1%; Mexico: 21.2%) and Asia (especially China: 12.3%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 19.8% share. Year-to-date (YTD) exports to China were +9.6% 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 were 1.4% lower YTD than the same months in 2017. Overall, YTD exports were up 7.7% compared to 2017, while imports were down 0.4%. 
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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (35.8% of the U.S. total), followed by the Eastern region (28.4%) and the Gulf (26.1%) regions. Moreover, Seattle maintained its lead (20.3% of the U.S. total) over Mobile (14.8%) and Savannah (9.3%) as the single most-active district. At the same time, Great Lakes customs region handled 62.6% of softwood lumber imports -- most notably the Duluth, MN district (28.2%) -- coming into the United States. 
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Southern yellow pine comprised 26.1% of all softwood lumber exports, Douglas-fir (13.7%) and treated lumber (13.1%). Southern pine exports were up 10.8% YTD relative to 2017, while treated: -6.4%; Doug-fir: -6.0%.
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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