March 2019 International Trade (Softwood Lumber)

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Softwood lumber exports edged up (3 MMBF or +3.1%) in March; meanwhile, imports jumped (261 MMBF or +26.1%). Exports were 60 MMBF (-35.3%) below year-earlier levels; imports were 19 MMBF (+1.5%) 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 March 2019 was 1.9% 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 (47.5%; of which Canada: 28.2%; Mexico: 19.4%) and Asia (28.6%; especially China: 9.2%; and Japan: 7.5%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 16.1% share. Year-to-date (YTD) exports to China were -67.1% relative to the same months in 2018. Meanwhile, Canada was the source of most (92.9%) of softwood lumber imports into the United States. Imports from Canada were -2.7% lower YTD than the same months in 2018. Overall, YTD exports were down 25.0% compared to 2018; imports: -2.8%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (36.6% of the U.S. total), followed by the Eastern (27.5%) and Gulf (23.3%) regions. Seattle (23.5% of the U.S. total) maintained the lead over Mobile (14.2%) as the single most-active district. At the same time, Great Lakes customs region handled 67.4% of softwood lumber imports -- most notably the Duluth, MN district (27.3%) -- coming into the United States. 

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Southern yellow pine comprised 24.0% of all softwood lumber exports, Douglas-fir (16.2%) and treated lumber (13.1%). Southern pine exports were down 47.8% YTD relative to 2018, while treated: -29.4%; Doug-fir: -10.1%.

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.