August 2020 International Trade (Softwood Lumber)

 

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Softwood lumber exports edged up (1 MMBF or +0.6%) in August whereas imports jumped (132 MMBF or +10.9%). Exports were 20 MMBF (-18.4%) below year-earlier levels; imports were 129 MMBF (+10.6%) higher. As a result, the year-over-year (YoY) net export deficit was 149 MMBF (+13.5%) larger. However, the average net export deficit for the 12 months ending August 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 (49.4%; of which Canada: 26.4%; Mexico: 23.0%), Asia (20.2%; especially China: 6.7%; and Japan: 5.1%), and the Caribbean: 23.9% (especially the Dominican Republic: 8.3%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were -11.6% relative to the same months in 2019. Meanwhile, Canada was the source of most (88.4%) of softwood lumber imports into the United States. Imports from Canada were 6.6% lower YTD than the same months in 2019. Overall, YTD exports were down 17.8% compared to 2019; imports: -2.8%.

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (37.4% of the U.S. total), followed by the Eastern (23.6%) and Gulf (28.8%) regions. Seattle (19.6% of the U.S. total) ceded the title of single most-active district to Mobile (21.2%), followed by San Diego (15.9%) and. At the same time, Great Lakes customs region handled 60.1% of softwood lumber imports -- most notably the Duluth, MN district (24.4%) -- coming into the United States.

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Southern yellow pine comprised 26.8% of all softwood lumber exports, Douglas-fir (15.2%) and treated lumber (14.2%) were also significant. Southern pine exports were down 13.4% YTD relative to 2019, while treated: -11.2%; Doug-fir: -13.1%.

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.