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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Friday, May 13, 2022

March 2022 International Trade (Softwood Lumber)

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With March exports of goods and services at a record $241.7 billion (+5.6% MoM; +17.7% YoY) and imports at an all-time-high $351.5 billion (+10.3% MoM; +27.0% YoY), the net trade deficit was $109.8 billion (+22.3% MoM; +53.8% YoY), exceeding $100 billion for the first time. 

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Softwood lumber exports were virtually unchanged (+1 MMBF or 1.0%) in March, but imports jumped (179 MMBF or +14.8%). Exports were 6 MMBF (5.8%) above year-earlier levels; imports were 69 MMBF (4.7%) lower. As a result, the year-over-year (YoY) net export deficit was 75 MMBF (5.5%) smaller. Also, the average net export deficit for the 12 months ending March 2022 was 1.8% lower than the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the lumber-trade graph above).

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North America (60.9% of total softwood lumber exports; of which Mexico: 30.6%; Canada: 30.3%), Asia (12.5%; especially Japan: 30.5%; and Pakistan: 1.6%), and the Caribbean: 20.4% especially the Dominican Republic: 6.2%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China (1.8% of U.S. total) were -53.0% relative to the same month of the prior year. Meanwhile, Canada was the source of most (82.9%) softwood lumber imports into the United States. Imports from Canada were 9.4% lower YTD/YTD. Overall, YTD exports were up 10.2% compared to the prior year; imports: -5.9%.

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U.S. softwood lumber export activity through the West Coast customs region represented 34.7% of the U.S. total; Gulf: 27.2%, and Eastern: 25.1%. Seattle (16.4% of the U.S. total), Mobile (10.9%), San Diego (14.8%) and Laredo (8.2%) were among the most active districts. At the same time, Great Lakes customs region handled 53.9% of softwood lumber imports -- most notably the Duluth, MN district (20.6%) -- coming into the United States. 

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Southern yellow pine comprised 17.7% of all softwood lumber exports; Douglas-fir (18.6%), treated lumber (14.8%), other pine (9.4%) and finger-jointed (10.4%) were also significant. Southern pine exports were down 13.2% YTD/YTD, while Doug-fir: +28.8%; and treated: +27.3%.

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.

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