March 2020 International Trade (Softwood Lumber)

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Softwood lumber exports retreated (6 MMBF or -5.6%) in March; imports rose (290 MMBF or +27.0%). Exports were 8 MMBF (-7.4%) below year-earlier levels; imports were 103 MMBF (+8.2%) higher. As a result, the year-over-year (YoY) net export deficit was 111 MMBF (+9.6%) larger. However, the average net export deficit for the 12 months ending March 2020 was 0.3% 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 (45.8%; of which Canada: 24.7%; Mexico: 21.2%), Asia (26.8%; especially China: 7.9%; and Japan: 8.0%), and the Caribbean: 19.9% (especially the Dominican Republic: 6.0%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were -33.1% relative to the same months in 2019. Meanwhile, Canada was the source of most (88.2%) of softwood lumber imports into the United States. Imports from Canada were 1.9% higher YTD than the same months in 2019. Overall, YTD exports were down 6.4% compared to 2019; imports: +4.8%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (34.6% of the U.S. total), followed by the Eastern (28.9%) and Gulf (26.5%) regions. Seattle (21.8% of the U.S. total) was the single most-active district, followed by Mobile (16.5%). At the same time, Great Lakes customs region handled 60.7% of softwood lumber imports -- most notably the Duluth, MN district (21.6%) -- coming into the United States. 

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Southern yellow pine comprised 30.3% of all softwood lumber exports, Douglas-fir (15.9%) and treated lumber (12.0%) were also significant. Southern pine exports were up 10.6% YTD relative to 2019, while treated: +1.7%; Doug-fir: -8.6%.

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.