December 2022 International Trade (Softwood Lumber)

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With December exports of goods and services at $250.2 billion (-0.9% MoM; +7.6% YoY) and imports at $317.6 billion (+1.3% MoM; +2.0% YoY), the net trade deficit was $67.4 billion (+10.5% MoM; -14.5% YoY). 

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Softwood lumber exports fell (6 MMBF or -6.2%) in December, along with imports (99 MMBF or -8.1%). Exports were 19 MMBF (-16.3%) below year-earlier levels; imports: 90 MMBF (-7.4%) lower. As a result, the year-over-year (YoY) net export deficit was 72 MMBF (-6.5%) smaller. Also, the average net export deficit for the 12 months ending December 2022 was 2.3% 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 (60.5% of total softwood lumber exports; of which Mexico: 39.5%; Canada: 21.0%), Asia (12.7%; especially Japan: 3.4%), and the Caribbean: 20.2% especially the Dominican Republic: 11.1%) were the primary destinations for U.S. softwood lumber exports in December. Year-to-date (YTD) exports to China (2.6% of U.S. total) were -58.3% relative to the same month of the prior year. Meanwhile, Canada was the source of most (75.1%) softwood lumber imports into the United States. Imports from Canada were 6.6% lower YTD/YTD. Overall, YTD exports were down 8.6% compared to the prior year; imports: -2.8%.

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U.S. softwood lumber export activity through the West Coast customs region represented 33.1% of the U.S. total; Gulf: 40.7%, and Eastern: 17.8%. Seattle (12.8% of the U.S. total), Mobile (17.3%), San Diego (16.4%) and Laredo (17.7%) were the most active districts. At the same time, the Great Lakes customs region handled 54.3% of softwood lumber imports -- most notably the Duluth, MN district (18.0%) -- coming into the United States. 

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Southern yellow pine comprised 30.7% of all softwood lumber exports; Douglas-fir (14.3%), treated lumber (12.0%), other pine (11.5%) and finger-jointed (7.5%) were also significant. Southern pine exports were down 15.1% YTD/YTD, while Doug-fir: +2.3%; treated: +11.5%; other pine: (+16.6%); and finger-jointed: -17.3%.

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.