September 2020 International Trade (Softwood Lumber)

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Softwood lumber exports fell (4 MMBF or -4.7%) in September whereas imports rose (85 MMBF or +6.3%). Exports were 18 MMBF (-17.6%) below year-earlier levels; imports were 185 MMBF (+14.9%) higher. As a result, the year-over-year (YoY) net export deficit was 203 MMBF (+17.8%) larger. Also, the average net export deficit for the 12 months ending September 2020 was 1.1% larger 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 (52.1%; of which Canada: 27.3%; Mexico: 24.8%), Asia (18.9%; especially China: 6.3%; and Japan: 4.8%), and the Caribbean: 24.3% (especially the Dominican Republic: 91%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were -12.1% relative to the same months in 2019. Meanwhile, Canada was the source of most (88.9%) of softwood lumber imports into the United States. Imports from Canada were 4.7% lower YTD than the same months in 2019. Overall, YTD exports were down 17.8% compared to 2019; imports: -0.8%.

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (37.1% of the U.S. total), followed by the Eastern (26.1%) and Gulf (26.1%) regions. Seattle (18.5% of the U.S. total) was the single most-active district, followed by Mobile (17.3%) and San Diego (16.2%). At the same time, Great Lakes customs region handled 60.7% of softwood lumber imports -- most notably the Duluth, MN district (20.9%) -- coming into the United States.

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Southern yellow pine comprised 23.0% of all softwood lumber exports; Douglas-fir (16.3%) and treated lumber (15.5%) were also significant. Southern pine exports were down 14.4% YTD relative to 2019, while treated: -9.6%; Doug-fir: -12.6%.

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.