October 2022 International Trade (Softwood Lumber)

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With October exports of goods and services at $256.6 billion (-0.7% MoM; +13.6% YoY) and imports at $334.8 billion (+0.6% MoM; +13.9% YoY), the net trade deficit was $78.2 billion (+5.4% MoM; +14.7% YoY). 

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Softwood lumber exports rose (5 MMBF or +5.1%) in October, along with imports (52 MMBF or +4.1%). Exports were 46 MMBF (-29.8%) below year-earlier levels; imports: 10 MMBF (-0.8%) lower. As a result, the year-over-year (YoY) net export deficit was 35 MMBF (+3.0%) larger. However, the average net export deficit for the 12 months ending October 2022 was 4.1% 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 (56.7% of total softwood lumber exports; of which Mexico: 35.9%; Canada: 20.8%), Asia (12.3%; especially Japan: 2.5%), and the Caribbean: 24.4% especially the Dominican Republic: 11.1%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China (2.3% of U.S. total) were -60.2% relative to the same month of the prior year. Meanwhile, Canada was the source of most (83.0%) softwood lumber imports into the United States. Imports from Canada were 5.0% lower YTD/YTD. Overall, YTD exports were down 6.4% compared to the prior year; imports: -2.3%.

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U.S. softwood lumber export activity through the West Coast customs region represented 31.3% of the U.S. total; Gulf: 41.2%, and Eastern: 18.6%. Seattle (11.4% of the U.S. total), Mobile (21.9%), San Diego (16.7%) and Laredo (14.2%) were the most active districts. At the same time, Great Lakes customs region handled 59.2% of softwood lumber imports -- most notably the Duluth, MN district (19.2%) -- coming into the United States. 

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Southern yellow pine comprised 26.5% of all softwood lumber exports; Douglas-fir (13.3%), treated lumber (17.4%), other pine (9.2%) and finger-jointed (11.1%) were also significant. Southern pine exports were down 17.9% YTD/YTD, while Doug-fir: +7.5%; treated: +12.3%; other pine: (-13.4%); and finger-jointed: -8.3%.

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.