February 2020 International Trade (Softwood Lumber)

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Softwood lumber exports edged up (1 MMBF or +0.9%) in February; imports rose (45 MMBF or +4.4%). Exports were 1 MMBF (+1.2%) above year-earlier levels; imports were 74 MMBF (+7.4%) lower. As a result, the year-over-year (YoY) net export deficit was 73 MMBF (+8.1%) larger. Also, the average net export deficit for the 12 months ending February 2020 was 0.4% 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 (42.1%; of which Canada: 22.6%; Mexico: 19.5%), Asia (24.6%; especially China: 7.4%; and Japan: 5.0%), and the Caribbean: 26.0% (especially the Dominican Republic: 9.1%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were -38.1% relative to the same months in 2019. Meanwhile, Canada was the source of most (88.7%) of softwood lumber imports into the United States. Imports from Canada were 0.8% higher YTD than the same months in 2019. Overall, YTD exports were down 5.9% compared to 2019; imports: +2.7%. 

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U.S. softwood lumber export activity through the Gulf customs region represented the largest proportion (34.0% of the U.S. total), followed by the West Coast (33.3%) and Eastern (24.4%) regions. Seattle (19.2% of the U.S. total) was overtaken by Mobile (24.8%) as the single most-active district. At the same time, Great Lakes customs region handled 59.2% of softwood lumber imports -- most notably the Duluth, MN district (24.3%) -- coming into the United States. 

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Southern yellow pine comprised 31.0% of all softwood lumber exports, Douglas-fir (13.2%) and treated lumber (13.9%) were also significant. Southern pine exports were up 7.7% YTD relative to 2019, while treated: +9.9%; Doug-fir: -8.4%.

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.