January 2023 International Trade (Softwood Lumber)

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With January exports of goods and services at $257.5 billion (+3.4% MoM; +13.3% YoY) and imports at $325.8 billion (+3.0% MoM; +3.5% YoY), the net trade deficit was $68.3 billion (+1.6% MoM; -21.9% YoY). 

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Softwood lumber exports rose (5 MMBF or +5.5%) in January, along with imports (115 MMBF or +10.3%). Exports were 1 MMBF (+0.9%) above year-earlier levels; imports: 163 MMBF (+15.2%) higher. As a result, the year-over-year (YoY) net export deficit was 162 MMBF (+16.7%) larger. Also, the average net export deficit for the 12 months ending January 2023 was 0.5% above 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 (59.3% of total softwood lumber exports; of which Mexico: 34.0%; Canada: 25.3%), Asia (12.8%; especially China: 3.7%), and the Caribbean: 19.0% especially the Dominican Republic: 9.3%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 160.6% relative to the same month of the prior year. Meanwhile, Canada was the source of most (72.1%) softwood lumber imports into the United States. Imports from Canada were 2.8% lower YTD/YTD. Overall, YTD exports were up 0.9% compared to the prior year; imports: +15.2%.

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U.S. softwood lumber export activity through the West Coast customs region represented 36.7% of the U.S. total; Gulf: 36.0%, and Eastern: 17.9%. Seattle (15.9% of the U.S. total), Mobile (18.6%), San Diego (16.8%) and Laredo (11.2%) were the most active districts. At the same time, the Great Lakes customs region handled 48.1% of softwood lumber imports -- most notably the Duluth, MN district (16.4%) -- coming into the United States. The Eastern region comprised 30.8% of imports, but that volume was distributed among the districts.

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Southern yellow pine comprised 23.7% of all softwood lumber exports; Douglas-fir (16.6%), treated lumber (13.6%), other pine (10.7%) and finger-jointed (8.0%) were also significant. Southern pine exports were up 30.2% YTD/YTD, while Doug-fir: -3.7%; treated: -20.7%; other pine: (+23.3%); and finger-jointed: -7.1%.

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.