September 2019 International Trade (Softwood Lumber)

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Softwood lumber exports decreased (6 MMBF or -5.7%) in September; imports rose (29 MMBF or +2.4%). Exports were 17 MMBF (-14.0%) below year-earlier levels; imports were 70 MMBF (-5.3%) lower. As a result, the year-over-year (YoY) net export deficit was 44 MMBF (-4.5%) smaller. Also, the average net export deficit for the 12 months ending September 2019 was 4.5% 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 (45.1%; of which Canada: 20.9%; Mexico: 24.2%) and Asia (24.9%; especially China: 6.3%; and Japan: 6.3%) were the primary destinations for U.S. softwood lumber exports; the Caribbean ranked third with a 20.8% share. Year-to-date (YTD) exports to China were -61.8% relative to the same months in 2018. Meanwhile, Canada was the source of most (92.4%) of softwood lumber imports into the United States. Imports from Canada were 4.8% lower YTD than the same months in 2018. Overall, YTD exports were down 22.8% compared to 2018; imports: -4.7%. 

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U.S. softwood lumber export activity through the West Coast customs region represented the largest proportion (37.4% of the U.S. total), followed by the Gulf (32.1%) and Eastern (22.0%) regions. Seattle (22.5% of the U.S. total) maintained the lead over Mobile (18.7%) as the single most-active district. At the same time, Great Lakes customs region handled 65.5% of softwood lumber imports -- most notably the Duluth, MN district (21.2%) -- coming into the United States. 

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Southern yellow pine comprised 24.7% of all softwood lumber exports, Douglas-fir (14.7%) and treated lumber (12.2%) were also significant. Southern pine exports were down 38.1% YTD relative to 2018, while treated: -23.5%; Doug-fir: -8.4%.

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.