May 2020 International Trade (Softwood Lumber)

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Softwood lumber exports advanced (5 MMBF or +6.3%) in May; imports fell (109 MMBF or -9.0%). Exports were 32 MMBF (-27.0%) below year-earlier levels; imports were 309 MMBF (-22.0%) lower. As a result, the year-over-year (YoY) net export deficit was 277 MMBF (-21.6%) smaller. Also, the average net export deficit for the 12 months ending May 2020 was 5.3% 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 (46.9%; of which Canada: 31.9%; Mexico: 14.9%), Asia (32.4%; especially China: 14.2%; and Japan: 8.7%), and the Caribbean: 16.8% (especially the Dominican Republic: 4.9%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were -20.6% relative to the same months in 2019. Meanwhile, Canada was the source of most (84.0%) of softwood lumber imports into the United States. Imports from Canada were 10.2% lower YTD than the same months in 2019. Overall, YTD exports were down 16.1% compared to 2019; imports: -6.4%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (45.8% of the U.S. total), followed by the Eastern (24.9%) and Gulf (20.7%) regions. Seattle (33.1% of the U.S. total) was the single most-active district, followed by Mobile (14.4%). At the same time, Great Lakes customs region handled 59.2% 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 23.0% of all softwood lumber exports, Douglas-fir (18.7%) and treated lumber (13.3%) were also significant. Southern pine exports were down 4.4% YTD relative to 2019, while treated: -9.1%; Doug-fir: -13.7%.

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.