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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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Tuesday, February 7, 2023

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.

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