July 2022 International Trade (Softwood Lumber)

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With July exports of goods and services at $259.3 billion (+0.2% MoM; +21.1% YoY) and imports at $329.9 billion (-2.9% MoM; +16.4% YoY), the net trade deficit was $70.7 billion (-12.6% MoM; +1.8% YoY). 

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Softwood lumber exports fell (17 MMBF or -13.1%) in July, along with imports (121 MMBF or -8.5%). Exports were 16 MMBF (-12.6%) below year-earlier levels; imports: 64 MMBF (+5.1%) higher. As a result, the year-over-year (YoY) net export deficit was 81 MMBF (+7.2%) larger. However, the average net export deficit for the 12 months ending July 2022 was 9.1% below 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: 35.1%; Canada: 25.8%), Asia (13.7%; especially Japan: 4.1%), and the Caribbean: 17.5% especially the Dominican Republic: 4.9%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China (3.6% of U.S. total) were -47.9% relative to the same month of the prior year. Meanwhile, Canada was the source of most (81.5%) softwood lumber imports into the United States. Imports from Canada were 7.5% lower YTD/YTD. Overall, YTD exports were up 4.2% compared to the prior year; imports: -4.7%.

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U.S. softwood lumber export activity through the West Coast customs region represented 33.3% of the U.S. total; Gulf: 34.5%, and Eastern: 20.9%. Seattle (17.1% of the U.S. total), Mobile (14.4%), San Diego (14.9%) and Laredo (13.6%) were among the most active districts. At the same time, Great Lakes customs region handled 56.1% of softwood lumber imports -- most notably the Duluth, MN district (22.1%) -- coming into the United States. 

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Southern yellow pine comprised 22.9% of all softwood lumber exports; Douglas-fir (16.1%), treated lumber (12.8%), other pine (13.0%) and finger-jointed (8.0%) were also significant. Southern pine exports were down 6.8% YTD/YTD, while Doug-fir: +22.5%; treated: +15.3%; other pine: (+5.2%); and finger-jointed: +23.2%.

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.