January 2020 International Trade (Softwood Lumber)

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Softwood lumber exports increased (13 MMBF or +13.4%) in January; imports fell (209 MMBF or -16.9%). Exports were 15 MMBF (-12.1%) below year-earlier levels; imports were 19 MMBF (-1.8%) lower. As a result, the year-over-year (YoY) net export deficit was 5 MMBF (-0.5%) smaller. Also, the average net export deficit for the 12 months ending January 2020 was 0.9% 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 (45.1%; of which Canada: 18.4%; Mexico: 26.7%) and Asia (27.3%; especially China: 7.7%; and Japan: 5.9%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 21.7% share (especially the Dominican Republic: 10.5%). Year-to-date (YTD) exports to China were -28.2% relative to the same months in 2019. Meanwhile, Canada was the source of most (86.1%) of softwood lumber imports into the United States. Imports from Canada were 3.1% lower YTD than the same months in 2019. Overall, YTD exports were down 32.3% compared to 2019; imports: -1.8%. 

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U.S. softwood lumber export activity through the Gulf customs region represented the largest proportion (34.2% of the U.S. total), followed by the West Coast (33.5%) and Eastern (26.0%) regions. Seattle (17.4% of the U.S. total) was overtaken by Mobile (20.1%) as the single most-active district. At the same time, Great Lakes customs region handled 59.6% of softwood lumber imports -- most notably the Duluth, MN district (19.8%) -- coming into the United States. 

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Southern yellow pine comprised 27.0% of all softwood lumber exports, Douglas-fir (12.8%) and treated lumber (16.2%) were also significant. Southern pine exports were down 5.3% YTD relative to 2019, while treated: +15.3%; Doug-fir: -3.6%.

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.