September 2022 International Trade (Softwood Lumber)

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With September exports of goods and services at $258.0 billion (-1.1% MoM; +21.9% YoY) and imports at $331.3 billion (+1.5% MoM; +14.3% YoY), the net trade deficit was $73.3 billion (+11.6% MoM; -6.4% YoY). 

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Softwood lumber exports fell (27 MMBF or -20.9%) in September, along with imports (144 MMBF or -10.2%). Exports were 41 MMBF (-28.8%) below year-earlier levels; imports: 41 MMBF (+3.3%) higher. As a result, the year-over-year (YoY) net export deficit was 82 MMBF (+7.6%) larger. However, the average net export deficit for the 12 months ending September 2022 was 5.5% 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 (57.5% of total softwood lumber exports; of which Mexico: 32.0%; Canada: 25.6%), Asia (14.1%; especially Japan: 3.1%), and the Caribbean: 20.7% especially the Dominican Republic: 6.9%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China (3.0% of U.S. total) were -58.3% relative to the same month of the prior year. Meanwhile, Canada was the source of most (85.2%) softwood lumber imports into the United States. Imports from Canada were 4.8% lower YTD/YTD. Overall, YTD exports were down 3.0% compared to the prior year; imports: -2.5%.

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U.S. softwood lumber export activity through the West Coast customs region represented 31.8% of the U.S. total; Gulf: 32.7%, and Eastern: 24.1%. Seattle (14.5% of the U.S. total), Mobile (15.5%), San Diego (15.4%) and Laredo (10.5%) were the most active districts. At the same time, Great Lakes customs region handled 58.4% 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 21.2% of all softwood lumber exports; Douglas-fir (13.4%), treated lumber (18.0%), other pine (11.1%) and finger-jointed (10.3%) were also significant. Southern pine exports were down 16.1% YTD/YTD, while Doug-fir: +11.9%; treated: +15.5%; other pine: (-7.7%); and finger-jointed: -2.2%.

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.