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.