February 2023 International Trade (Softwood Lumber)

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With February exports of goods and services at $251.2 billion (-2.7% MoM; +8.1% YoY) and imports at $321.7 billion (-1.5% MoM; +0.7% YoY), the net trade deficit was $70.5 billion (+2.7% MoM; -19.2% YoY). 

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Softwood lumber exports fell (2 MMBF or -2.1%) in February, along with imports (144 MMBF or -11.6%). Exports were 10 MMBF (-9.4%) below year-earlier levels; imports: 115 MMBF (-9.5%) lower. As a result, the year-over-year (YoY) net export deficit was 105 MMBF (-9.5%) smaller. Also, the average net export deficit for the 12 months ending February 2023 was 0.6% 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 (58.5% of total softwood lumber exports; of which Mexico: 34.7%; Canada: 23.9%), Asia (14.3%; especially China: 5.1%), and the Caribbean: 19.3% especially Jamaica: 7.6%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 92.2% relative to the same month of the prior year. Meanwhile, Canada was the source of most (80.8%) softwood lumber imports into the United States. Imports from Canada were 7.0% lower YTD/YTD. Overall, YTD exports were down 4.5% compared to the prior year; imports: +2.1%.

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U.S. softwood lumber export activity through the West Coast customs region represented 34.7% of the U.S. total; Gulf: 37.2%, and Eastern: 18.7%. Seattle (15.2% of the U.S. total), Mobile (18.6%), San Diego (16.2%) and Laredo (12.6%) were the most active districts. At the same time, the Great Lakes customs region handled 56.4% of softwood lumber imports -- most notably the Duluth, MN district (18.4%) -- coming into the United States. The Eastern region comprised 22.5% of imports, but that volume was distributed among the districts.

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Southern yellow pine comprised 21.1% of all softwood lumber exports; Douglas-fir (15.4%), treated lumber (16.4%), other pine (8.8%) and finger-jointed (11.4%) were also significant. Southern pine exports were up 26.0% YTD/YTD, while Doug-fir: -14.9%; treated: -13.7%; other pine: (+0.9%); and finger-jointed: -0.7%.

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.