March 2023 International Trade (Softwood Lumber)

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With March exports of goods and services at $256.2 billion (+2.1% MoM; +5.0% YoY) and imports at $320.4 billion (-0.3% MoM; -8.6% YoY), the net trade deficit was $64.2 billion (-9.1% MoM; -39.7% YoY). 

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Softwood lumber exports rose (21 MMBF or +21.8%) in March, along with imports (163 MMBF or +14.9%). Exports were 10 MMBF (+9.3%) above year-earlier levels; imports: 130 MMBF (-9.4%) lower. As a result, the year-over-year (YoY) net export deficit was 140 MMBF (-11.0%) smaller. Also, the average net export deficit for the 12 months ending March 2023 was 1.1% 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 (58.6% of total softwood lumber exports; of which Mexico: 34.8%; Canada: 23.8%), Asia (14.7%; especially China: 5.0%), and the Caribbean (20.7%; especially the Dominican Republic: 7.7%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 127.8% higher than the same month of the prior year. Meanwhile, Canada was the source of most (83.4%) softwood lumber imports into the United States. Imports from Canada were 7.7% lower YTD/YTD. Overall, YTD exports were up 0.3% compared to the prior year; imports: -2.2%.

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U.S. softwood lumber export activity through the West Coast customs region represented 31.7% of the U.S. total; Gulf: 38.2%, and Eastern: 21.8%. Seattle (14.7% of the U.S. total), Mobile (18.0%), San Diego (14.7%) and Laredo (13.2%) were the most active districts. At the same time, the Great Lakes customs region handled 57.8% of softwood lumber imports -- most notably the Duluth, MN district (20.5%) -- coming into the United States. The Eastern region comprised 19.6% of imports, but that volume was distributed among the districts.

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Southern yellow pine comprised 23.9% of all softwood lumber exports; Douglas-fir (13.7%), treated lumber (13.2%), other pine (11.3%) and finger-jointed (9.7%) were also significant.

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.