November 2018 International Trade (Softwood Lumber)

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Softwood lumber exports turned lower (26 MMBF or -17.1%) in November, along with imports (168 MMBF or -13.0%). Exports were 26 MMBF (-17.1%) below year-earlier levels; imports were 220 MMBF (-16.3%) lower. As a result, the year-over-year (YoY) net export deficit was 194 MMBF (-16.3%) smaller. Also, the average net export deficit for the 12 months ending November 2018 was 3.0% 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 (39.5%; of which Canada: 22.0%; Mexico: 17.5%) and Asia (27.9%; especially China: 9.9%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 25.9% share. Year-to-date (YTD) exports to China were -14.1% relative to the same months in 2017. Meanwhile, Canada was the source of most (88.7%) of softwood lumber imports into the United States. Imports from Canada were 4.2% lower YTD than the same months in 2017. Overall, YTD exports were up 2.1% compared to 2017, while imports were down -2.5%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (32.5% of the U.S. total), followed by the Gulf region (30.7%) and the Eastern (27.0%) regions. Moreover, Mobile (22.1% of the U.S. total) extended its lead over Seattle (19.8%) as the single most-active district. At the same time, Great Lakes customs region handled 64.0% of softwood lumber imports -- most notably the Duluth, MN district (26.2%) -- coming into the United States. 

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Southern yellow pine comprised 25.7% of all softwood lumber exports, Douglas-fir (13.9%) and treated lumber (12.0%). Southern pine exports were up 1.6% YTD relative to 2017, while treated: -10.7%; Doug-fir: -8.8%.

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.