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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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Tuesday, May 7, 2019

February 2019 International Trade (Softwood Lumber)

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Softwood lumber exports turned down (15 MMBF or -12.4%) in February; meanwhile, imports fell (48 MMBF or -4.6%). Exports were 42 MMBF (-8.5%) below year-earlier levels; imports were 16 MMBF (-1.6%) lower. As a result, the year-over-year (YoY) net export deficit was 26 MMBF (+3.0%) larger. Also, the average net export deficit for the 12 months ending February 2019 was 0.1% larger 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: 21.8%; Mexico: 17.7%) and Asia (36.7%; especially China: 13.9%; Japan: 8.0%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 17.5% share. Year-to-date (YTD) exports to China were -63.3% relative to the same months in 2018. Meanwhile, Canada was the source of most (90.9%) of softwood lumber imports into the United States. Imports from Canada were -5.6% lower YTD than the same months in 2018. Overall, YTD exports were down 18.8% compared to 2018; imports: -5.3%. 
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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (35.2% of the U.S. total), followed by the Eastern (33.5%) and Gulf (23.1%) regions. Seattle (22.4% of the U.S. total) maintained the lead over Mobile (14.4%) as the single most-active district. At the same time, Great Lakes customs region handled 65.4% of softwood lumber imports -- most notably the Duluth, MN district (23.5%) -- coming into the United States. 
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Southern yellow pine comprised 25.7% of all softwood lumber exports, Douglas-fir (15.3%) and treated lumber (13.5%). Southern pine exports were down 42.3% YTD relative to 2018, while treated: -27.7%; Doug-fir: -10.3%.
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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