January 2024 International Trade (Softwood Lumber)

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With January exports of goods and services at $257.2 billion (+0.1% MoM; -0.4% YoY) and imports at $324.6 billion (+1.1% MoM; -1.2% YoY), the net trade deficit was $67.4 billion (+5.1% MoM; -4.1% YoY). 

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Softwood lumber exports rose (11 MMBF or +15.2%) in January, while imports fell (31 MMBF or -2.7%). Exports were 2 MMBF (+1.6%) above year-earlier levels; imports: 116 MMBF (-9.4%) lower. As a result, the year-over-year (YoY) net export deficit was 118 MMBF (-10.4%) lower. Also, the average net export deficit for the 12 months ending January 2024 was 9.0% 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 (53.8% of total softwood lumber exports -- of which Mexico: 34.0%; Canada: 19.8%), Asia (16.5% -- especially India: 4.4%; Japan: 3.2%; China: 3.0%), and the Caribbean (22.4% -- especially the Dominican Republic: 10.0%; Bahamas: 2.4%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 16.9% lower than the same month(s) of the prior year. Meanwhile, Canada was the source of most (81.2%) softwood lumber imports into the United States. Imports from Canada were 2.1% higher YTD/YTD. Overall, YTD exports were up 1.6% compared to the prior year; imports: -9.4%.

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U.S. softwood lumber export activity through the Gulf customs region represented 36.2% of the U.S. total; West Coast: 32.4%, and Eastern: 23.4%. Mobile (18.7% of the U.S. total), San Diego (16.4%) Seattle (13.2%), and Laredo (11.2%) were the most active districts. At the same time, the Great Lakes customs region handled 53.4% of softwood lumber imports -- most notably the Duluth, MN district (14.4%) -- coming into the United States. 

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Southern yellow pine comprised 24.7% of all softwood lumber exports; other pine (14.0%), Douglas-fir (13.7%), treated lumber (12.5%), and finger-jointed (10.5%) 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.