November 2019 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (7 MMBF or -6.3%) in November; imports fell (183 MMBF or -14.8%). Exports were 23 MMBF (-18.1%) below year-earlier levels; imports were 76 MMBF (-6.8%) lower. As a result, the year-over-year (YoY) net export deficit was 53 MMBF (-5.3%) smaller. Also, the average net export deficit for the 12 months ending November 2019 was 3.0% 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 (43.7%; of which Canada: 20.9%; Mexico: 22.9%) and Asia (27.7%; especially China: 6.9%; and Japan: 7.1%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 21.1% share. Year-to-date (YTD) exports to China were -61.2% relative to the same months in 2018. Meanwhile, Canada was the source of most (86.8%) of softwood lumber imports into the United States. Imports from Canada were 5.0% lower YTD than the same months in 2018. Overall, YTD exports were down 22.8% compared to 2018; imports: -4.9%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (33.6% of the U.S. total), followed by the Eastern (29.2%) and Gulf (28.5%) regions. Seattle (18.6% 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 60.1% of softwood lumber imports -- most notably the Duluth, MN district (20.9%) -- coming into the United States. 

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Southern yellow pine comprised 24.5% of all softwood lumber exports, Douglas-fir (14.3%) and treated lumber (14.1%) were also significant. Southern pine exports were down 36.8% YTD relative to 2018, while treated: -23.8%; Doug-fir: -6.2%.

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.