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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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Friday, December 14, 2018

October 2018 International Trade (Softwood Lumber)

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Softwood lumber exports turned higher (31 MMBF or +26.3%) in October, but imports receded further (25 MMBF or -1.9%). Exports were 1 MMBF (+0.8%) above year-earlier levels; imports were 95 MMBF (-6.8%) lower. As a result, the year-over-year (YoY) net export deficit was 96 MMBF (7.8%) smaller. Also, the average net export deficit for the 12 months ending October 2018 was 1.4% smaller than the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the graph above). 
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North America (of which Canada: 20.5%; Mexico: 20.9%) and Asia (26.6%; especially China: 12.9%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 25.2% share. Year-to-date (YTD) exports to China were -8.1% relative to the same months in 2017. Meanwhile, Canada was the source of most (87.3%) of softwood lumber imports into the United States. Imports from Canada were 2.7% lower YTD than the same months in 2017. Overall, YTD exports were up 4.2% compared to 2017, while imports were down -1.0%. 
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U.S. softwood lumber export activity through the Gulf customs region represented the largest proportion (33.4% of the U.S. total), followed by the West Coast region (29.4%) and the Eastern (28.3%) regions. Moreover, Mobile (20.8% of the U.S. total) overtook Seattle (16.0%) as the single most-active district; Savannah: 13.0%. At the same time, Great Lakes customs region handled 61.4% of softwood lumber imports -- most notably the Duluth, MN district (27.0%) -- coming into the United States. 
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Southern yellow pine comprised 29.0% of all softwood lumber exports, Douglas-fir (9.6%) and treated lumber (14.0%). Southern pine exports were up 4.6% YTD relative to 2017, while treated: -7.5%; Doug-fir: -8.9%.
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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