Friday, December 14, 2018

October 2018 International Trade (Softwood Lumber)

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Softwood lumber exports turned higher (31 MMBF or +26.3%) in October, but imports receded further (25 MMBF or -1.9%). Exports were 1 MMBF (+0.8%) above year-earlier levels; imports were 95 MMBF (-6.8%) lower. As a result, the year-over-year (YoY) net export deficit was 96 MMBF (7.8%) smaller. Also, the average net export deficit for the 12 months ending October 2018 was 1.4% 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: 20.5%; Mexico: 20.9%) and Asia (26.6%; especially China: 12.9%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 25.2% share. Year-to-date (YTD) exports to China were -8.1% relative to the same months in 2017. Meanwhile, Canada was the source of most (87.3%) of softwood lumber imports into the United States. Imports from Canada were 2.7% lower YTD than the same months in 2017. Overall, YTD exports were up 4.2% compared to 2017, while imports were down -1.0%. 
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U.S. softwood lumber export activity through the Gulf customs region represented the largest proportion (33.4% of the U.S. total), followed by the West Coast region (29.4%) and the Eastern (28.3%) regions. Moreover, Mobile (20.8% of the U.S. total) overtook Seattle (16.0%) as the single most-active district; Savannah: 13.0%. At the same time, Great Lakes customs region handled 61.4% of softwood lumber imports -- most notably the Duluth, MN district (27.0%) -- coming into the United States. 
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Southern yellow pine comprised 29.0% of all softwood lumber exports, Douglas-fir (9.6%) and treated lumber (14.0%). Southern pine exports were up 4.6% YTD relative to 2017, while treated: -7.5%; Doug-fir: -8.9%.
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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