August 2019 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (7 MMBF or -6.3%) in August; imports rose (88 MMBF or +7.8%). Exports were 34 MMBF (-23.9%) below year-earlier levels; imports were 128 MMBF (-9.5%) lower. As a result, the year-over-year (YoY) net export deficit was 94 MMBF (-7.8%) smaller. Also, the average net export deficit for the 12 months ending August 2019 was 3.9% smaller 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 (42.8%; of which Canada: 21.8%; Mexico: 20.9%) and Asia (30.4%; especially China: 8.4%; and Japan: 7.9%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 19.9% share. Year-to-date (YTD) exports to China were -62.9% relative to the same months in 2018. Meanwhile, Canada was the source of most (91.1%) of softwood lumber imports into the United States. Imports from Canada were 4.8% lower YTD than the same months in 2018. Overall, YTD exports were down 23.7% compared to 2018; imports: -4.6%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (34.9% of the U.S. total), followed by the Gulf (30.2%) and Eastern (26.7%) regions. Seattle (20.7% of the U.S. total) maintained the lead over Mobile (19.9%) as the single most-active district. At the same time, Great Lakes customs region handled 64.6% of softwood lumber imports -- most notably the Duluth, MN district (22.4%) -- coming into the United States. 

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Southern yellow pine comprised 26.1% of all softwood lumber exports, Douglas-fir (15.7%) and treated lumber (11.7%) were also significant. Southern pine exports were down 38.9% YTD relative to 2018, while treated: -24.8%; Doug-fir: -7.2%.

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.