July 2019 International Trade (Softwood Lumber)

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Softwood lumber exports increased (5 MMBF or +4.7%) in July; imports fell (144 MMBF or -11.3%). Exports were 15 MMBF (-11.4%) below year-earlier levels; imports were 237 MMBF (-17.3%) lower. As a result, the year-over-year (YoY) net export deficit was 221 MMBF (-18.0%) smaller. Also, the average net export deficit for the 12 months ending July 2019 was 1.8% 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 (44.1%; of which Canada: 23.1%; Mexico: 20.9%) and Asia (27.8%; especially China: 9.1%; and Japan: 6.7%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 23.0% share. Year-to-date (YTD) exports to China were -64.1% relative to the same months in 2018. Meanwhile, Canada was the source of most (90.4%) of softwood lumber imports into the United States. Imports from Canada were 4.0% lower YTD than the same months in 2018. Overall, YTD exports were down 23.6% compared to 2018; imports: -3.9%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (35.5% of the U.S. total), followed by the Gulf (20.2%) and Eastern (26.6%) regions. Seattle (21.4% of the U.S. total) maintained the lead over Mobile (20.6%) as the single most-active district. At the same time, Great Lakes customs region handled 63.4% of softwood lumber imports -- most notably the Duluth, MN district (23.5%) -- coming into the United States. 

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Southern yellow pine comprised 27.6% of all softwood lumber exports, Douglas-fir (14.5%) and treated lumber (12.8%) were also significant. Southern pine exports were down 40.5% YTD relative to 2018, while treated: -23.8%; Doug-fir: -6.3%.

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.