June 2019 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (5 MMBF or -4.7%) in June; imports also fell (129 MMBF or -9.2%). Exports were 26 MMBF (-18.9%) below year-earlier levels; imports were 124 MMBF (-9.0%) lower. As a result, the year-over-year (YoY) net export deficit was 99 MMBF (-7.9%) smaller. Also, the average net export deficit for the 12 months ending June 2019 was 1.3% 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 (41.5%; of which Canada: 22.6%; Mexico: 18.9%) and Asia (27.5%; especially China: 6.0%; and Japan: 6.2%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 22.2% share. Year-to-date (YTD) exports to China were -65.8% relative to the same months in 2018. Meanwhile, Canada was the source of most (90.7%) of softwood lumber imports into the United States. Imports from Canada were 2.0% lower YTD than the same months in 2018. Overall, YTD exports were down 25.4% compared to 2018; imports: -1.5%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (32.8% of the U.S. total), followed by the Gulf (28.9%) and Eastern (28.3%) regions. Seattle (20.4% of the U.S. total) maintained the lead over Mobile (20.0%) as the single most-active district. At the same time, Great Lakes customs region handled 63.6% 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 27.3% of all softwood lumber exports, Douglas-fir (14.6%) and treated lumber (13.1%) were also significant. Southern pine exports were down 43.4% YTD relative to 2018, while treated: -28.3%; Doug-fir: -6.9%.

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.