May 2019 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (3 MMBF or -2.2%) in May; imports also fell (44 MMBF or -3.0%). Exports were 46 MMBF (-28.2%) below year-earlier levels; imports were unchanged (0.0%). As a result, the year-over-year (YoY) net export deficit was 46 MMBF (+3.7%) larger. Also, the average net export deficit for the 12 months ending May 2019 was 3.8% 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 (44.2%; of which Canada: 26.3%; Mexico: 17.9%) and Asia (29.4%; especially China: 7.4%; and Japan: 7.6%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 19.7% share. Year-to-date (YTD) exports to China were -64.8% relative to the same months in 2018. Meanwhile, Canada was the source of most (89.9%) of softwood lumber imports into the United States. Imports from Canada were 0.4% lower YTD than the same months in 2018. Overall, YTD exports were down 26.5% compared to 2018; imports: +0.2%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (36.9% of the U.S. total), followed by the Gulf (26.7%) and Eastern (25.8%) regions. Seattle (23.9% of the U.S. total) maintained the lead over Mobile (17.7%) as the single most-active district. At the same time, Great Lakes customs region handled 62.4% of softwood lumber imports -- most notably the Duluth, MN district (24.0%) -- coming into the United States. 

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Southern yellow pine comprised 24.2% of all softwood lumber exports, Douglas-fir (15.9%) and treated lumber (12.1%). Southern pine exports were down 46.6% YTD relative to 2018, while treated: -28.9%; Doug-fir: -5.5%.

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.