December 2019 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (8 MMBF or -8.2%) in December; imports rose (191 MMBF or +18.2%). Exports were 2 MMBF (1.8%) above year-earlier levels; imports were 123 MMBF (11.1%) higher. As a result, the year-over-year (YoY) net export deficit was 122 MMBF (11.9%) larger. Also, the average net export deficit for the 12 months ending December 2019 was 1.5% 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 (41.0%; of which Canada: 19.8%; Mexico: 21.2%) and Asia (29.7%; especially China: 7.6%; and Japan: 7.4%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 22.4% share (especially Dominican Republic: 7.3%). Year-to-date (YTD) exports to China were -59.7% relative to the same months in 2018. Meanwhile, Canada was the source of most (86.5%) of softwood lumber imports into the United States. Imports from Canada were 4.1% lower YTD than the same months in 2018. Overall, YTD exports were down 21.5% compared to 2018; imports: -3.7%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (33.5% of the U.S. total), followed by the Gulf (31.6%) and Eastern (25.7%) regions. Seattle (18.6% of the U.S. total) was overtaken by Mobile (21.2%) as the single most-active district. At the same time, Great Lakes customs region handled 62.5% of softwood lumber imports -- most notably the Duluth, MN district (23.9%) -- coming into the United States. 

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Southern yellow pine comprised 27.0% of all softwood lumber exports, Douglas-fir (16.5%) and treated lumber (12.8%) were also significant. Southern pine exports were down 34.1% YTD relative to 2018, while treated: -21.4%; Doug-fir: -5.3%.

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.