July 2016 International Trade (Pulp, Paper & Paperboard)

Month-over-Month (MoM), Year-over-Year (YoY), and Year-to-Date (YTD):

On a month-to-month basis, July’s net exports increased for the first time since April 2016, increasing 104.9 thousand tonnes (6.8%): 1,551 to 1,656 thousand tonnes. July’s net exports were the fourth highest level of the year. Details for July, the prior six months, year-over-year, and year-to-date performance are presented in the table below.

Click image for larger view

Despite the MoM increase in net exports in July, both exports and imports decreased; exports declined by 8.1 thousand tonnes (-0.3%), and imports 113.0 thousand tonnes (-13.2%). Net exports increased because the decrease in exports was less than the decrease in imports.

July exports were down 188 thousand tonnes YoY and imports down 82 thousand tonnes, resulting in a YoY decrease in net exports of 106 thousand tonnes (-6.0%).

Exports are down 99 thousand tonnes YTD while imports are up 50 thousand tonnes, yielding an decrease in net exports of 149 thousand metric tonnes (-1.3%). On a YTD basis 2016 net exports (11,712 thousand tonnes) achieved the fourth highest level since 2006, 8.8% below the peak level of 12,847 thousand tonnes in 2011.

This year’s increase in imports and decrease in exports is consistent with a generally strong U.S. dollar (on trade-weighted basis 6.9% off peak level in 2002:02; for example see August 2016 Currency Exchange Rates). Further, the fact 2016’s YTD net exports are down 1.3% compared to 2015’s West Coast port strike/slowdown-impacted levels underscores a soft global economy. The graph below shows monthly, including a YTD monthly average (first data point of each line in graph below), from 2011 to 2016. 

Click image for larger view

Six-month Cumulative Activity and Trends:

Cumulative activity over the six months ending July 2016 shows net exports are 6.0% below the pace seen over the same months in 2015. Cumulative six-month net exports are lower due principally to lower exports, down 188 thousand tonnes (-7.3%), compared to imports which are down 82 thousand tonnes (-10.0%).

Six-month trend-lines were fit to the data to study recent trends beyond simple cumulative activity.  Two of the three trend lines were negative for the six-month period ending in July with only the net export trend line flat. There was a notable slope change for imports from last month’s six-month trend where the trend ending in June was positively sloped but turned negative for the six-month trend ending in July. This could augur a downshift in U.S. economic activity if the trend continues. Meanwhile the net export six-month trend slope shifted from flat in June to slightly negative in July.

Apart from trend lines, thus far during 2016 May was the export peak for the year, June this year’s import peak, and April is 2016’s net export peak. July’s exports were 5.5% below May’s peak, July’s imports were 13.2% below June’s import peak, and July’s net exports were 7.2% below April’s net export peak. 

Click image for larger view

Notable shifts in country-level details:

Pulp exports (15,896 thousand tonnes) are lower (-0.2%) compared to last year’s levels. Despite exports to China dropping by over 5%, it remains the chief destination of U.S. pulp by a wide margin in 2016, representing 56% of 2016 shipments; July 2015 YTD figures pegged exports to China at 58% of the U.S. total, indicating China’s share of U.S. pulp exports has declined in 2016 relative to 2015. Mexico continues to hold on as the second-ranked destination for U.S. pulp exports, representing 7.5% of 2015 exports compared to India’s 6.9% share. Pulp exports to both countries are up YTD: Mexico’s receipt of U.S. pulp exports has increased 10.4% and India’s are up 13.2%. Indonesia has pushed past Japan as claiming the sixth largest share of U.S. pulp exports by climbing nearly 21% thus far in 2016. 

Click image for larger view

2016 pulp imports (3,656 thousand tonnes YTD) increased 3.8% compared to 2015’s comparable YTD levels. Canada and Brazil, the 1^st and 2^nd ranked pulp import sources, respectively, account for 94% of the pulp imported. Both have posted increases during 2016: Canada an increase of 4.8% and Brazil an increase of 3.3%. Chile, the number three ranked source of pulp imports into the U.S., has declined by 5.8%. Sweden has climbed from number five on the list in 2015 to number four on the list in 2016 on a 7.3% increase in imports while Mexico, which was number four in 2015, has seen imports decline by 12%. The Philippines are up by 89% YTD while continuing to hold onto the number six position. Finland’s imports have more than doubled, pushing it into the top 10 sources for pulp imports into the U.S. As a region Africa shows the largest percentage increase at 89.7%, followed closely by Asia at 60.7%. 

Click image for larger view

Paper and paperboard imports (1,847 thousand tonnes) have dropped by 4.2% in 2016 compared to 2015’s activity. Once again Canada leads the way, providing nearly 83% of the total import volume, while posting a 7.9% drop and accounting for 159.3% of the YTD decrease (130 of 82 thousand tonnes). Finland and China changed positions with one another for the number 2 and 3 rankings as China’s 41.7% increase added over 21 thousand tonnes while Finland’s 5.6% decline deducted nearly 4 thousand tonnes from each respective country’s YTD totals. Among the top 10 import sources, Australia posted a 49.2% gain, Sweden a 59.7% gain, and Chile a 212.6% gain. Among the top 20 countries Germany posted the largest loss at 32.3%. Chile and Taiwan both increased in their ranking among the top 10 while South Korea fell back from 8th to 10th place.  Regionally, Latin American imports grew by 67.6%, Oceania by 48.5%, and Asia by 24.9% while North America, by far the largest import source, fell by 7.3%. 

Click image for larger view

Paper and paperboard exports (1,319 thousand tonnes) dropped by 4.7% YTD 2016. Canada, the number 1 ranked destination for U.S. paper and paperboard exports, holds a slim lead over Mexico, the number 2 ranked destination; exports to Canada have dropped by 0.4% in 2016 compared to 2015 YTD while Mexico has dropped by 4.8 percent. Among 2015’s Top 10 destinations, the “loss leader” in 2016 is India (-33 thousand tonnes, -53.2%, dropping from 4th ranked in 2015 to 10th ranked in 2016 ) followed by Taiwan (-3,602 tonnes, -9.7%, dropping from 5th to 8th). Bucking the general decline in paper and paperboard exports, the following countries showed strong growth thus far in 2016: Japan (+11.8%), Costa Rica (+44.3%), Guatemala (+13.8%), South Korea (+8.2%), Honduras (+44.3%), Colombia (+22.5%), United Kingdom (+15.3%), Hong Kong (+79.4%) and Ecuador (+44.5%). On a regional basis, only the Caribbean and Latin American regions posted increases U.S. paper and paperboard imports. 

Click image for larger view

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.

December 2015 International Trade (Pulp, Paper & Paperboard)

Month-over-Month (MoM), Year-over-Year (YoY), and Year-to-Date (YTD):

On a month-to-month basis, December's net exports increased for the first time since August 2015, rising by 57.6 thousand tonnes (3.7%) -- from 1,557 to 1,614 thousand tonnes.  December's net exports were the eighth highest level of the year.  Details for December, the prior six months, year-over-year, and year-to-date performance are presented in the table below.

Click image for larger view

Both exports and imports increased between November and December: exports by 72.2 thousand tonnes (3.1%) and imports by 14.6 thousand tonnes (2.0%).  Net exports increased because the increase in exports was greater than the increase in imports.

December YoY exports were down 103 thousand tonnes and imports down 83 thousand tonnes, resulting in a YoY decrease in net exports of 19 thousand tonnes (-1.2%). 

YTD exports are up 493 thousand tonnes while imports are down 507 thousand tonnes, yielding an increase in net exports of 1,001 thousand tonnes (5.3%).  2015 net exports achieved the third highest level since 2005. 

This year's decline in imports and increase in exports is counterintuitive with reported stronger 2015 U.S. growth compared to global growth and a strengthening U.S. dollar.  The graph below shows monthly, including a YTD monthly average (first data point of each line in graph below), from 2010 to 2015. 

Click image for larger view

While the West Coast port slowdown may explain some of the early 2015 results, and 2Q results reflect some degree of "catch-up" from the port slowdown, the annual results suggest other factors are responsible.

Six-month Cumulative Activity and Trends:

Cumulative activity over the six months ending December 2015 shows net exports are 6.1% above the pace seen over the six months ending in December 2014.  Cumulative six-month net exports are principally higher due to higher exports, up 228 thousand tonnes (1.6%), compared to imports which are down 339 thousand tonnes (6.9%). 

Six-month trend-lines were fit to the data to study recent trends beyond simple cumulative activity.   All three trend lines remained negative for the six-month period ending in December. 

Apart from trend lines, in 2015 May was the export peak, June the import peak, and May the net export peak.  December's exports were 10.3% below May's export peak; December's imports were 11.1% below June's import peak; and December's net exports were 14.5% below May's net export peak. 

Click image for larger view

In terms of notable shifts in country-level details:

Pulp exports (26,898 thousand tonnes 2015) are higher (2.0%) compared to last year's levels.  China remained the chief destination of U.S. pulp by a wide margin in 2015, representing 58% of 2015 shipments; December 2014 figures pegged exports to China at 56% of the U.S. total, indicating China's share of U.S. pulp exports has grown in 2015 relative to 2014.  China's 2015 exports have increased by 5.3% compared to the same period in 2014.  Mexico leapfrogged India as the second-ranked destination for U.S. pulp exports, representing 6.7% of 2015 exports compared to India's 6.4% share.  Pulp exports to both countries are down YTD: Mexico's receipt of U.S. pulp export have fallen by over 4% and India's are down by nearly 9%.  In addition to Mexico and India swapping spots in 2015, among 2014's top 10 destinations Japan and Indonesia also swapped, Japan moving up from number 7 to number 6 by purchasing 6.4% more pulp while Indonesia has purchased 7.3% less pulp.  

Click image for larger view

2015 pulp imports (6,036 thousand tonnes YTD) decreased -4.9% compared to 2014's levels.  Canada and Brazil, the 1st and 2nd ranked pulp import sources, respectively, account for nearly 94% of the pulp imported.  Despite their top ranking, Canada has logged a decline (-6.6%) in pulp imported while Brazil has decreased (-0.3%) its imports compared to 2014's levels.  Chile, the number three ranked source of pulp imports into the U.S., has increased imports by 1.3%.  Norway has climbed from a 10th ranked place in 2014 to 8th in 2015 with an over 114% increase in pulp imports to the U.S., the Philippines from 12th ranked in 2014 to 6th ranked in 2015 with an increase over 300%, and Germany from 13th ranked to 10th ranked.  For the year China (9th in 2014, 12th in 2015) and Finland (8th in 2014, 11th in 2015) have fallen out of the top 10 importers of pulp into the US.  As a region Asia shows the largest percentage increase in imports into the U.S. at 59.7% while Caribbean nations collectively posted the largest percentage decline at 86.6%. 

Click image for larger view

2015 Paper and paperboard imports (3,197 thousand tonnes ) dropped by 5.8% compared to 2014's activity.  Once again Canada led the way, accounting for nearly 86% of the total import volume and 114.2% of the YTD decrease (223 of 196 thousand tonnes).  Finland and China held onto their number 2 and 3 rankings despite posting respective 5.5% and 2.3% decreases in 2015 compared to 2014.  One notable development on a percentage basis is Australia, which has vaulted from being the 7th ranked supplier during the first ten months of 2014 to the 4th ranked supplier during 2015, posting an increase of 136.3%.  Mexico slipped from the 4th to 5th place ranking despite importing 15.8% more into the U.S.  In other top 10 changes from 2014, Sweden has dropped from 5th in 2014 to 6th in 2015 with a 12.5% drop in paper and paperboard imports into the U.S and South Korea slipped from 6th to 8th with pulp and paperboard imports declining by over 46.9%.   Meanwhile Taiwan vaulted to the 9th ranked spot from 12th ranked in 2014 with an increase of 105.5% in imports shipped to the U.S. 

Click image for larger view

Paper and paperboard exports (2,375 thousand tonnes) dropped by 1.5% during 2015.  Canada, the top-ranked destination for U.S. paper and paperboard exports, holds a slim lead over Mexico, the number 2 ranked destination, despite exports to Canada dropping by 0.3% in 2015 compared to 2014 while Mexico has grown by 16.1 percent from 2014 to 2015.  Among 2014's top 10 destinations, the "loss leader" in 2015 is India (-31 thousand tonnes, -23.6%) from 2014, followed by Costa Rica (-25 thousand, -31.9%) and Japan (-13 thousand tonnes, -7.9%).  Bucking the general decline in paper and paperboard exports, as already noted, Mexico's receipts of U.S. paper and paperboard exports is up.  South Korea (+10.2%), Guatemala (+3.9%), and China (+9.1%) are receiving more U.S. exports of paper and paperboard as well.  

Click image for larger view

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.

November 2015 International Trade (Pulp, Paper & Paperboard)

Month-over-Month (MoM), Year-over-Year (YoY), and Year-to-Date (YTD):

On a month-to-month basis, November's net exports posted the third consecutive monthly decline, dropping 51.8 thousand tonnes (-3.2%): 1,608 to 1,557 thousand tonnes. November's net exports were the second lowest level of the year thus far, supplanting October for that title and pushing it third lowest for the year. While February was lower than September, October, and November net exports, both January and March, it was likely impacted by the West Coast port slowdown. Details for November, the prior six months, year-over-year, and year-to-date performance are presented in the table below.

Click image for larger view

Both exports and imports fell between November and October; exports decreased by 138.1 thousand tonnes (-5.7%) and imports decreased by 86.4 thousand tonnes (-10.5%). The reason net exports fell is because the decline in exports was greater than the decline in imports.

On a year-over-year basis November exports were down 76.2 thousand tonnes and imports up 25.1 thousand tonnes, resulting in a year-over-year decrease in net exports of 101.3 thousand tonnes (-6.1%).

On a year-to-date basis exports are up 596 thousand tonnes while imports are down 424 thousand tonnes, yielding an increase in net exports of 1,020 thousand metric tonnes (5.9%). Net exports are on track to achieve the third highest level since 2005.

The year-to-date decline in imports and increase in exports is counterintuitive with reported stronger 2015 US growth compared to global growth and a strengthening U.S. dollar. As noted in prior repots, this trend has been consistently evident from April 2015's YTD through October 2015's YTD results; in the seven months of reported data since April four of the seven have been the second highest month of net exports since 2005 and two have been the third highest month. However, this pattern was broken in October when October 2015's monthly result ranked as the seventh highest monthly total of eleven since 2005. November improved modestly, increasing to the sixth highest monthly total of eleven Novembers since 2005. The graph below shows monthly, including a YTD monthly average (first data point of each line in graph below), from 2010 to 2015. 

Click image for larger view

While the West Coast port slowdown may explain some of the early 2015 results, and 2Q results reflect some degree of "catch-up" from the port slowdown, the YTD results suggests other factors are responsible for the YTD performance.

In particular, the reduction in YTD imports might suggest US economic activity may not be as strong as is generally believed. With a strong U.S. dollar and active U.S. growth compared to global growth the expectation would be imports would increase to support U.S. domestic economic growth. Cheap oil should have made such an outcome even more likely. The most notable drop in imports is from Canada. The bulk of the YTD increase in exports was driven by exports to China, suggesting China's economic slowdown has not yet adversely impacted sectors consuming pulp. More country by country details are covered below.

Six-month Cumulative Activity and Trends:

Cumulative activity over the six months ending November 2015 shows net exports are 7.1% above the pace seen over the six months ending in November 2014. Cumulative six-month net exports are principally higher due to higher exports, up 451 thousand tonnes or 3.2 percent, compared to imports which are down 211 thousand tonnes, or 4.3 percent.

Six-month trend-lines were fit to the data to study recent trends beyond simple cumulative activity. All three trend lines remained negative for the six-month period ending in November.

Apart from trend lines, thus far in 2015 May was the export peak, June the import peak, and May the net export peak. November's exports were 12.8% below May's export peak, November's imports were 13.0% below June's import peak, and November's net exports were 17.5% below May's net export peak. 

Click image for larger view

In terms of notable shifts in country-level details:

Pulp exports (24,720 thousand tonnes YTD) are higher (2.6%) compared to last year's YTD levels. China remains the chief destination of U.S. pulp by a wide margin, representing 58% of YTD shipments; November 2014 YTD figures pegged exports to China at 56% of the U.S. total, indicating China's share of US pulp exports has grown in 2015 relative to 2014. China's exports have increased by 6.9% YTD compared to the same period in 2014. Mexico leapfrogged India as the second-ranked destination for U.S. pulp exports, representing 6.7% of YTD exports compared to India's 6.3% share. Pulp exports to both countries are down YTD: Mexico's receipt of U.S. pulp export have fallen by over 4% and India's are down by nearly 12%. In addition to Mexico and India swapping spots in 2015, among 2014's top 10 destinations Japan and Indonesia also swapped, Japan moving up from number 7 to number 6 by purchasing 5.1% more pulp YTD while Indonesia has purchased 7.6% less pulp YTD. 

Click image for larger view

Pulp imports (5,537 thousand tonnes YTD) decreased -4.2% compared to prior YTD levels. Canada and Brazil, the 1st and 2nd ranked pulp import sources, respectively, account for nearly 94% of the pulp imported. Despite their top ranking, Canada has logged a decline (-7.1%) in pulp imported while Brazil has increased (+2.9%) its imports compared to prior YTD levels. Chile, the number three ranked source of pulp imports into the U.S., has increased its imports YTD by nearly 2%. Norway has climbed from a 10th ranked place in 2014 to 8th in 2015 with an over 330% increase in pulp imports to the U.S., the Philippines from 12th ranked in 2014 to 7th ranked in 2015 with an increase over 260%, and Germany from 13th ranked to 10th ranked. On a YTD basis China (9th in 2014, 11th in 2015) and Finland (8th in 2014, 12th in 2015) have fallen out of the 10 ten importers of pulp into the US. As a region Asia shows the largest percentage increase in imports into the U.S. at 44.6% while Caribbean nations collectively posted the largest percentage decline at 87.0%. 

Click image for larger view

Paper and paperboard imports (2,944 thousand tonnes YTD) have dropped by nearly 6% year-to-date compared to prior YTD activity. Once again Canada leads the way, accounting for nearly 86% of the total import volume and 117.5% of the YTD decrease (215 of 183 thousand tonnes). Finland and China held onto their number 2 and 3 rankings despite posting 2.2% and 3.7% decreases YTD, respectively. One notable development on a percentage basis is Australia, which has vaulted from being the 7th ranked supplier during the first ten months of 2014 to the 4th ranked supplier during the first ten months of 2015, posting an increase of 161.6%. Mexico slipped from the 4th to 5th place ranking despite importing 14.8% more into the U.S. YTD. In other top 10 changes from 2014, Swedan has dropped from 5th in 2014 to 6th in 2015 with a 7.7% drop in paper and paperboard imports into the U.S and South Korea slipped from 6th to 8th with pulp and paperboard imports declining by over 50%. Meanwhile Taiwan vaulted to the 9th ranked spot from 12th ranked in 2014 with an increase of 171.9% in imports shipped to the U.S. 

Click image for larger view

Paper and paperboard exports (2,188 thousand tonnes) dropped by 1.2% on a YTD basis. Canada, the number 1 ranked destination for U.S. paper and paperboard exports, holds a slim lead over Mexico, the number 2 ranked destination, despite exports to Canada dropping by 0.4% YTD compared to 2014 while Mexico has grown by 18.9 percent 2014 to 2015 YTD. Among 2014's Top 10 destinations, the "loss leader" in 2015 is India (-34 thousand tonnes, -27.4% from prior YTD) followed by Costa Rica (-23 thousand, -31.5% from prior YTD), and Japan (-14 thousand tonnes, -9.4% from prior YTD). Bucking the general decline in paper and paperboard exports, as already noted, Mexico's receipts of U.S. paper and paperboard exports is up. South Korea (+12.0%) and China (+9.1%) are both receiving more U.S. exports of paper and paperboard as well. 

Click image for larger view

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.

October 2015 International Trade (Pulp, Paper & Paperboard)

Month-over-Month, Year-over-Year, and Year-to-Date:

On a month-over-month basis, October's net exports posted a slight decrease of 16.9 thousand tonnes (-1.0%): 1,625 to 1,608 thousand tonnes. October's net exports were the second lowest level of the year thus far, supplanting September for that title and pushing it third lowest for the year. While February was lower than both September and October net exports, both January and March, which were affected by the West Coast port slowdown, were higher. Details for October, the prior six months, year-over-year, and year-to-date performance are presented in the table below.

Click image for larger view

Despite month-over-month net exports decreasing, October exports increased by 58.4 thousand tonnes (2.5%) from September's level. The reason net exports fell even though exports increased is because imports in October increased at a faster rate than exports, rising by 75.3 thousand tonnes (10.1%), resulting in the 16.9 thousand tonne decline in net exports.

On a year-over-year basis October exports were down 40.4 thousand tonnes and imports up 5.3 thousand tonnes, resulting in a year-over-year decrease in net exports of 45.7 thousand tonnes (-2.8%).

On a year-to-date basis exports are up 672 thousand tonnes while imports are down 449 thousand tonnes, yielding an increase in net exports of 1,121 thousand metric tonnes (7.1%). Net exports are on track to achieve the third highest level since 2005.

The year-to-date decline in imports and increase in exports is counterintuitive with reported stronger 2015 US growth compared to global growth and a strengthening U.S. dollar. As noted in prior repots, this trend has been consistently evident from April 2015's YTD through September 2015's YTD results; in the seven months of reported data since April four of the five have been the second highest month of net exports since 2005 and two have been the third highest month. However, this pattern was broken in October when October 2015's monthly result ranked as the seventh highest monthly total of eleven since 2005.

While the West Coast port slowdown may explain some of the early 2015 results, and 2Q results reflect some degree of "catch-up" from the port slowdown, the YTD results suggests other factors are responsible for the YTD performance.

In particular, the reduction in YTD imports might suggest US economic activity may not be as strong as is generally believed. With a strong U.S. dollar and active U.S. growth compared to global growth the expectation would be imports would increase to support U.S. domestic economic growth. Cheap oil should have made such an outcome even more likely. The most notable drop in imports is from Canada. The bulk of the YTD increase in exports was driven by exports to China, suggesting China's slowdown has not yet adversely impacted sectors consuming pulp. More country by country details are covered below.

Six-month Cumulative Activity and Trends:

Cumulative activity over the six months ending August 2015 shows net exports are 11.5% above the pace seen over the six months ending in August 2014. Cumulative six-month net exports are principally higher due to higher exports, up 766 thousand tonnes or 5.4 percent, compared to imports which are down 299 thousand tonnes, or 6.0 percent.

Six-month trend-lines were fit to the data to study recent trends beyond simple cumulative activity. All three trend lines remained negative although the import trend is barely negative for the six-month period ending in October.

Apart from trend lines, thus far in 2015 May was the export peak, June the import peak, and May the net export peak. October's exports were 7.7% below May's export peak, October's imports were 2.6% below June's import peak, and October's net exports were 14.8% below May's net export peak. 

Click image for larger view

In terms of notable shifts in country-level details:

Pulp exports (22,614 thousand tonnes YTD) are higher (3.2%) compared to last year's YTD levels. China remains the chief destination of U.S. pulp by a wide margin, representing 58% of YTD shipments; October 2014 YTD figures pegged exports to China at 56% of the U.S. total, indicating China's share of US pulp exports has grown in 2015 relative to 2014. China's exports have increased by 8.5% YTD compared to the same period in 2014. Mexico leapfrogged India as the second-ranked destination for U.S. pulp exports, representing 6.7% of YTD exports compared to India's 6.2% share. Pulp exports to both countries are down YTD: Mexico's receipt of U.S. pulp export have fallen by over 5% and India's are down by nearly 14%. In addition to Mexico and India swapping spots in 2015, among 2014's top 10 destinations Japan and Indonesia also swapped, Japan moving up from number 7 to number 6 by purchasing 6.6% more pulp YTD while Indonesia has purchased 7.6% less pulp YTD. 

Click image for larger view

Pulp imports (5,053 thousand tonnes YTD) decreased -5.1% compared to prior YTD levels. Canada and Brazil, the 1st and 2nd ranked pulp import sources, respectively, account for over 93% of the pulp imported. Despite their top ranking, Canada has logged a decline (-8.0%) in pulp imported while Brazil has barely increased (+0.6%) its imports compared to prior YTD levels. On the other hand, Chile, while maintaining its number three rank, has increased its imports YTD by nearly 6%. Norway has climbed from a 10th ranked place in 2014 to 8th in 2015 with an over 500% increase in pulp imports to the U.S., the Philippines from 12th ranked in 2014 to 7th ranked in 2015 with an increase over 260%, and Germany from 13th ranked to 10th ranked. On a YTD basis China (9th in 2014, 11th in 2015) and Finland (8th in 2014, 12th in 2015) have fallen out of the 10 ten importers of pulp into the US. As a region Europe shows the largest percentage increase in imports into the U.S. at 56.7% while Caribbean nations collectively posted the largest percentage decline at 87.3%. 

Click image for larger view

Paper and paperboard imports (2,691 thousand tonnes YTD) have dropped by over 6% year-to-date compared to prior YTD activity. Once again Canada leads the way, accounting for 86% of the total import volume and 113.6% of the YTD decrease (201 of177 thousand tonnes). Finland and China held onto their number 2 and 3 rankings despite posting 1.9% and 7.0% decreases YTD, respectively. One notable development on a percentage basis is Australia, which has vaulted from being the 7th ranked supplier during the first ten months of 2014 to the 4th ranked supplier during the first ten months of 2015, posting an increase of 143.6%. Mexico slipped from the 4th to 5th place ranking despite importing 14.3% more into the U.S. YTD. In other top 10 changes from 2014, Sweden has dropped from 5th in 2014 to 6th in 2015 with a 16.1% drop in paper and paperboard imports into the U.S and South Korea slipped from 6th to 8th with pulp and paperboard imports declining by nearly 53%. Meanwhile Taiwan vaulted to the 9th ranked spot from 12th ranked in 2014 with an increase of 190.8% in imports shipped to the U.S. 

Click image for larger view

Paper and paperboard exports (2,000 thousand tonnes) dropped by 1.6% on a YTD basis. Mexico and Canada swapped places as the number 1 destination for U.S. paper and paperboard exports, with Mexico growing by 18.3 percent YTD over same period in 2014, while Canada's purchases of U.S. paper and paperboard declined by 0.9 percent. Among 2014's Top 10 destinations, the "loss leader" in 2015 is India (-29 thousand tonnes, -25.5% from prior YTD) followed by Costa Rica (-19 thousand, -29.1% from prior YTD), and Japan (-18 thousand tonnes, -12.1% from prior YTD). Bucking the general decline in paper and paperboard exports, as already noted, Mexico's receipts of U.S. paper and paperboard exports is up. South Korea (+10.3%) and China (+6.2%) are both receiving more U.S. exports of paper and paperboard as well. 

Click image for larger view

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.

August 2015 International Trade (Pulp, Paper & Paperboard)

Month-over-Month, Year-over-Year, and Year-to-Date:

* On a month-to-month basis, August's net exports posted a slight increase of 12.9 thousand tonnes. Details for August, the prior six months, year-over-year, and year-to-date performance are presented in the table below.

Click image for larger view

* Despite month-to-month net exports growing, August exports declined by 92.7 thousand tonnes (3.6%) from July.  The reason net exports increased even though exports declined is because imports declined even more, dropping by 105.6 thousand tonnes (12.8%).  

* On a year-over-year basis August exports were up 74.4 thousand tonnes and imports down 94.7 thousand tonnes, resulting in a year-over-year increase in net exports of 169.1 thousand tonnes.  

* On a year-to-date basis exports are up 545 thousand tonnes while imports are down 363 thousand tonnes, yielding an increase in net exports of 908 thousand metric tonnes (7.1%).  Net exports are on track to achieve the third highest level since 2005.  The year-to-date decline in imports and increase in exports is counterintuitive with reported stronger 2015 US growth compared to global growth and a strengthening U.S. dollar.  However, this trend has been consistently evident and expanding in this series since April 2015's YTD; in the five months of reported data since April four of the five have been the second highest month of net exports since 2005 and one has been the third highest month.  

While the West Coast port slowdown may explain some of the early 2015 results, the continuing expansion in exports (145 thousand tonnes YTD increase through May2015 compared to YTD May 2014 to 545 thousand tonnes YTD increase through August 2015 compared to YTD August 2014) and continuing decline in imports (121 thousand tonnes YTD decrease through Feb 2015 compared to Feb 2014 YTD to 363 thousand tonnes through August 2015 compared to August 2014 YTD) suggests other factors are responsible for the YTD performance through August.

In particular, the reduction in imports might suggest US economic activity may not be as strong as is generally believed.  With a strong U.S. dollar and active U.S. growth compared to global growth the expectation would be imports would increase to support U.S. domestic economic growth.  Cheap oil should have made such an outcome even more likely.  The most notable drop in imports is from Canada.  The bulk of the YTD increase in exports was driven by exports to China, suggesting China's slowdown has not yet adversely impacted sectors consuming pulp.  More country by country details are covered below.  

Six-month Cumulative Activity and Trends: 

* Cumulative activity over the six months ending August 2015 shows net exports are 11.1% above the pace seen over the six months ending in August 2014.  Cumulative six-month net exports are principally higher due to higher exports, up 808 thousand tonnes or 5.6 percent, compared to imports which are down 243 thousand tonnes, or 4.8 percent.  

* Six-month trend-lines were fit to the data to study recent trends beyond simple cumulative activity.   Two of the three trend lines (exports and imports) switched from being strongly positive on the six month trend ending in July (16.43% and 12.58% for exports and imports, respectively) to negative on the six month trend ending in August.  In both cases the principal cause for the switch in slope was dropping early 2015 months, which had been affected by the West Coast Port slowdown, from the six-month trend line calculation.    Because the rate of decline on imports is greater than the rate of decline on exports in the latest six month trend, the net export trend declined but remains on a positive slope (18.28% in six months ending July to 2.29% in six months ending August).

Click image for larger view

Notable shifts in country-level details:

* Pulp exports (18,223 thousand tonnes YTD) are higher (3.3%) compared to last year's YTD levels.  China remains the chief destination of U.S. pulp by a wide margin, representing 58% of YTD shipments; August 2014 YTD figures pegged exports to China at 56% of the U.S. total.  China's exports have increased by 8.3% YTD compared to the same period in 2013.  Mexico leapfrogged India as the second-ranked destination for U.S. pulp exports, representing 6.8% of YTD exports compared to India's 6.1% share.  Pulp exports to both countries are down YTD: Mexico's receipt of U.S. pulp export have fallen by over 3% and India's are down by over 13%.  In addition to Mexico and India swapping spots in 2015, among 2014's top 10 destinations Japan and Indonesia also swapped, Japn moving up from number 7 to number 6 by purchasing 4.4% more pulp YTD while Indonesia has purchased 7.2% less pulp YTD.  

Click image for larger view

* Pulp imports (3,987 thousand tonnes YTD) decreased -6.3% compared to prior YTD levels.  Canada and Brazil, the 1st and 2nd ranked pulp import sources, respectively, account for over 93% of the pulp imported.  Despite their top ranking, both have logged declines in pulp imported compared to prior YTD levels.  On the other hand, Chile, while maintaining its number three rank, has increased its imports YTD by nearly 18%.  Norway has climbed from a 10th ranked place in 2014 to 7th in 2015 with a nearly 550% increase in pulp imports to the U.S., the Philippines from 12th ranked in 2014 to 9th ranked in 2015, and Germany from 13th ranked to 9th ranked.  As a region Europe shows the largest percentage increase in imports into the U.S. at 63.2% while Caribbean nations collectively posted the largest percentage decline at 91.4%.

Click image for larger view

* Paper and paperboard imports (2,185 thousand tonnes YTD) have dropped by over 4% year-to-date compared to prior YTD activity.  Once again Canada leads the way, accounting for 86% of the total import volume and 139.4% of the YTD decrease (131 of 94 thousand tonnes).  Finland easily held onto its number 2 rank on a 10.5% increase in imports to the U.S. while China maintained its hold as the 3rd ranked source of paper and paperboard imports despite a drop of 8% YTD.  One notable development on a percentage basis is Australia, which has vaulted from being the 7th ranked supplier during the first eight months of 2014 to the 4th ranked supplier during the first eight months of 2015, posting an increase of 288%.  Mexico slipped from the 4th to 5th place ranking despite importing 16.8% more into the U.S. YTD.  In other top 10 changes from 2014, Swedan has dropped from 5th in 2014 to 7th in 2015 with a 17.1% drop in paper and paperboard imports into the U.S and South Korea slipped from 6th to 9th with pulp and paperboard imports declining by nearly 53%.   Meanwhile Taiwan vaulted to the 8th ranked spot from 12th ranked in 2014 with an increase of 247.2% in imports shipped to the U.S.

Click image for larger view

* Paper and paperboard exports (1,586 thousand tonnes) dropped by 2.0% on a YTD basis.  Mexico and Canada swapped places as the number 1 destination for U.S. paper and paperboard exports, with Mexico growing by 20.1 percent YTD over same period in 2014, while Canada's purchases of U.S. paper and paperboard declined by 1.3 percent.  Among 2014's Top 10 destinations, the "loss leader" is India (-22 thousand tonnes, -24.2% from prior YTD) followed by Japan (-19 thousand tonnes, -16.0% from prior YTD), and Costa Rica (-16 thousand, -30.0% from prior YTD).  Bucking the general decline in paper and paperboard exports, as already noted, Mexico's receipts of U.S. paper and paperboard exports is up.  South Korea (+7.0%) and China (+7.1%) are both receiving more U.S. exports of paper and paperboard as well.  Guatemala (+0.4%) and Honduras (-0.3%) are essentially level with 2014's activity thus far in 2015.

Click image for larger view

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.

November 2014 International Trade (Pulp, Paper & Paperboard)

Click image for larger view

Month-over-Month, Year-over-Year (YoY), and Year-to-Date (YTD):

* On a month-over-month basis, November’s net exports posted a scant increase of 4 thousand tonnes, or 0.2%, after October net exports were up by 21% from September. Despite November essentially flat-lining, the marginal increase resulted in November posting the highest level of net exports since January 2014.

* While this performance seems to belie the well documented West Coast port slowdown, when viewed on the basis of total tonnes processed (imports plus exports), the slowdown is more apparent, dropping from 3.3 million tonnes in October to 3.1 million tonnes in November. November’s net exports grew marginally because imports fell by 106 thousand tonnes while exports fell by 102 thousand tonnes, resulting in a net increase of 4 thousand tonnes.

* On a YoY basis November exports were down 51 thousand tonnes and imports down 94 thousand tonnes, resulting in a YoY increase in net exports of 43 thousand tonnes. On a YTD basis, exports are down 182 thousand tonnes while imports are up 132 thousand tonnes, yielding a decline in net exports of 314 thousand metric tonnes (-1.8%). The YTD increase in imports and decline in exports is consistent with 2014’s emerging trends of slowing global growth and a strengthening U.S. dollar.

Six-month Cumulative Activity and Trends:

* Cumulative activity over the six months ending November 2014 shows net exports are 1.0% below the pace seen over the six months ending in November 2013. Cumulative six-month net exports are principally lower due to higher imports (up 61 thousand tonnes or 1.3%) compared to exports (down 29 thousand tonnes, or 0.2%).

* Six-month trend lines were fit to the data to study recent trends beyond simple cumulative activity. November’s six month trend line on net exports switched to positive compared to October’s negative six month trend line. As noted previously, the reason for the change from negative to positive is more about the decline in imports than the increase in exports. Exports’ six-month trend did tick up from slightly negative in October to flat for the six months ending in November. On the other hand, the six-month import trend line became negative for November after being flat in October. 

Click image for larger view

In terms of notable shifts in country-level details:

* Pulp exports (24,096 thousand tonnes YTD) are down slightly (-0.1%) compared to last year’s YTD levels. China remains the chief destination of U.S. pulp by a wide margin, representing 56% of YTD shipments. Nevertheless China’s exports have declined by 4.2% YTD compared to the same period in 2013. India surpassed Mexico as the second-ranked destination for U.S. pulp exports, representing 7.3% of YTD exports compared to Mexico’s 7.2% share. While Mexico’s receipt of U.S. pulp export are up nearly 10% YTD and India’s are up by 25%. Among 2013’s top 10 destinations, the most significant change is Indonesia where U.S. pulp exports are 43% higher than prior YTD levels, causing it to jump from the ninth-ranked 2013 YTD destination to the sixth-ranked 2014 YTD destination. In terms of declines among 2013’s top 10 destinations, Italy posted the most notable drop on a percentage basis (nearly -25%). 

Click image for larger view

* Paper and paperboard exports (2,215 thousand tonnes) dropped by 6.6% on a YTD basis. Canada has leapfrogged Mexico as the top destination for U.S. paper and paperboard exports, growing by 15.8% YTD over same period in 2013, while Mexico’s purchases of U.S. paper and paperboard declined by 6.2%. Among 2013’s Top 10 destinations, the “loss leader” is India (102 thousand tonnes, -45.0% from prior YTD) followed by Mexico (32 thousand tonnes, -6.2% from prior YTD), Japan (22 thousand, -12.5% from prior YTD) and China (16 thousand tonnes, -25.1% from prior YTD). Canada’s receipt of U.S. paper and paperboard exports bucks the general decline. Costa Rica and Guatemala are also receiving higher levels of U.S. paper and paperboard exports; Costa Rica’s YTD receipts are up by over 21 thousand tonnes (+4.1%) and Guatemala is up over 7 thousand tonnes (+16.1%). 

Click image for larger view

* Pulp imports (5,778 thousand tonnes YTD) decreased -1.3% compared to prior YTD levels. Canada and Brazil -- the first- and second-ranked pulp import sources, respectively -- account for nearly 94% of the pulp imported. Despite their top ranking, both have logged declines in pulp imported compared to prior YTD levels. On the other hand, Chile, while maintaining its number three rank, has increased its imports YTD by nearly 85%. Likewise Mexico has increased its pulp imports by over one-third compared to prior YTD levels. As a supply source, Uruguay has climbed to the sixth-ranked source for imported pulp in 2014 after not recording any shipments through the first 11 months of 2013. Among 2013’s YTD top-ten sources for pulp, Germany (ranked tenth YTD  in 2013) posted the largest percentage drop (nearly 28%), dropping to the 12^th-ranked source for 2014 YTD. 

Click image for larger view

* Paper and paperboard imports (3,126 thousand tonnes YTD) have expanded by over 7% YTD compared to prior YTD activity. Once again Canada leads the way, accounting for nearly 88% of the total import volume and 67% of the YTD increase (139 of 208 thousand tonnes). One notable development on a percentage basis is Australia, which has vaulted from being the 29^th ranked supplier during the first 11 months of 2013 to the 7^th ranked supplier during the first 11 months of 2014, posting an eye-popping increase of 13,293% (from 164 tonnes YTD through November 2013 to 21,925 tonnes YTD through November 2014). In other top-ten changes from 2013, Sweden dropped from number four to number five, with pulp and paperboard imports declining by over 18%, Germany dropped from number six to number eight on a 15% decrease, and Indonesia dropped from eight to number nine on a 29% decline.

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.

September 2014 International Trade (Pulp, Paper & Paperboard)

Click image for larger view

On a month-to-month basis, September's net exports reversed August's 10.3 percent increase, posting a 14.3 percent decrease. September's drop reasserted the downward string of month-to-month declines that occurred between March and July. September year-to-date (YTD) net exports trail prior YTD levels by 380,000 tonnes (2.6 percent), falling further behind August's YTD pace. Consistent with slowing global growth, lower YTD exports accounted for over two-thirds of the change from August YTD. Meanwhile, U.S. imports YTD increased from the prior month's pace, closing 2.8 percent higher than the prior year's level.

Cumulative activity over the six months ending September 2014 shows net exports are 1.6 percent below the pace seen during the same period in 2013; cumulative net exports are lower due to higher imports. Six-month trend-lines were fit to the data to study recent trends. September's six month trend-line on net exports became more negative compared to August's six month trend-line. Exports’ six-month trend also became more negative compared to the August's trend-line. The six-month import trend-line became more positive in September. 

Click image for larger view

In terms of notable shifts in country-level details:

Pulp exports (19.661 million tonnes YTD) are essentially flat (-0.04 percent) compared to last year's YTD levels. China remains the chief destination of U.S. pulp by a wide margin, representing 55 percent of YTD shipments. Nevertheless China's exports have declined by 4.0 percent YTD compared to the same period in 2013. India narrowly surpassed Mexico as the second-ranked destination for U.S. pulp exports, representing 7.4 percent of YTD exports compared to Mexico's 7.3 percent share. While Mexico's receipt of U.S. pulp export are up nearly 10 percent YTD and India's are up by nearly 27 percent. Among 2013's top 10 destinations, the most significant change is Indonesia where U.S. pulp exports are over 46 percent higher than prior YTD levels, causing it to jump from the ninth-ranked 2013 YTD destination to the sixth-ranked 2014 YTD destination. 

Click image for larger view

Paper and paperboard exports (1.808 million tonnes) dropped by 7.7 percent on a YTD basis. Among 2013's top 10 destinations, the "loss leader" is India (-87,000 tonnes, or 46.5 percent from prior YTD), followed by Mexico (-44,000 tonnes, or 9.9 percent from prior YTD), Japan (-17,000 or 11.5 percent) and China (-14,000 or 26.7 percent). Bucking the general decline in paper and paperboard exports, Canada's receipt of U.S. paper and paperboard exports are up by 71,000 tonnes (+16.9 percent). Costa Rica and Guatemala are also receiving higher levels of U.S. paper and paperboard exports; Costa Rica's YTD receipts are up by over 18,000 tonnes (+43.0 percent) and Guatemala is up over 4,000 tonnes (+11.8 percent). 

Click image for larger view

Pulp imports (4.805 million tonnes YTD) increased 0.3 percent compared to prior YTD levels. Canada and Brazil, the 1st and 2nd ranked pulp import sources, respectively, account for 94 percent of the pulp imported. Despite their top ranking, both have logged declines in pulp imported compared to prior YTD levels. On the other hand, Chile, while maintaining its number three rank, has increased its imports YTD by over 86 percent. As a supply source, Indonesia has climbed from being the twelfth-ranked supplier during the first nine months of 2013 to the ninth-ranked supplier during the first nine months of 2014, posting a YTD increase of 66 percent. 

Click image for larger view

Paper and paperboard imports (2.570 million tonnes YTD) have expanded by over 8 percent year-to-date compared to prior YTD activity. Once again Canada leads the way, accounting for 88 percent of the total import volume and 68 percent of the YTD increase (133,000 of 194,000 tonnes). One notable development on a percentage basis is Australia, which has vaulted from being the 29^th ranked supplier during the first nine months of 2013 to the 7^th ranked supplier during the first nine months of 2014, posting an eye-popping increase of 85,889 percent -- from 19 tonnes to 16,682 tonnes.

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.

July 2014 International Trade (Pulp, Paper & Paperboard)

Click image for larger view

July's results essentially extended 2Q’s trend in pulp and paper trade: stronger domestic demand but generally weak global demand. Although July exports did tick higher, it barely did so, registering a scant 0.1 percent increase while showing the first increase in imports since April. Imports broke out of their recent trading range between 800,000 and 815,000 tonnes, posting a 15.9 percent increase over June's level. Sharply higher imports and barely higher exports yielded a decline in net exports, dropping by 7.8 percent on month-to-month basis ("M2M"), a year-over-year ("Y2Y") decline of 10.9 percent, and YTD decline of 3.0 percent.

The six-month export trend swapped from marginally negative to marginally positive, switching from a 1.6 percent January-to-June decline to a 1.5 percent February-to-July increase. The six-month trend on imports exploded higher, jumping from a 3.8 percent trend increase between January and June to a 17.4 percent increase between February and July. Despite the export trend shifting from negative to positive, the much higher trend on imports means the six-month net-export trend fell, dropping from -4.2 percent from January to June to -5.9 percent from February to July. 

Click image for larger view

In terms of notable shifts in country-level details: Pulp exports (15.422 million tonnes YTD) increased by 0.3 percent compared to prior YTD levels. China remains the chief destination of U.S. pulp by a wide margin, representing 56 percent of YTD shipments compared to Mexico, the second-ranked destination at 7.3 percent. Nevertheless China's exports have declined by 2.2 percent YTD compared to the same period in 2013. Mexico's receipt of U.S. pulp export are up nearly 10 percent YTD and India's, the third ranked destination for U.S. pulp exports, are up by nearly 22 percent. Among 2013's top 10 destinations, the most significant change is Indonesia where U.S. pulp exports are over 41 percent higher than prior YTD levels, causing it to jump from the ninth-ranked 2013 YTD destination to the sixth-ranked 2014 YTD destination.

Click image for larger view

Paper and paperboard exports (1.422 million tonnes) dropped by 7.0 percent on a YTD basis. Among 2013's Top 10 destinations, the "loss leader" is India (70,000 tonnes, -46.8 percent from prior YTD) followed by China (13,000 tonnes, -32.7 percent), Mexico (24,000 tonnes, -7.1 percent), and Japan (10,000 tonnes, -9.1 percent). Bucking the general decline in paper and paperboard exports, YTD paper and paperboard exports to Canada are up by 57,000 tonnes (+17.9 percent) compared to prior YTD levels. Costa Rica, Guatemala, and Peru are also receiving higher levels of U.S. paper and paperboard exports; Costa Rica's YTD receipts are up by nearly 16,000 tonnes (+48.1 percent), Guatemala is up nearly 6,000 tonnes (+18.5 percent) and Peru is up over 4,000 tonnes (+44.7 percent). 

Click image for larger view

Pulp imports (3.729 million tonnes YTD) increased 2.5 percent compared to prior YTD levels. The most significant drop is from Brazil, which has fallen by 1.9 percent. However, imports from Canada, up by 2.0 percent YTD compared to prior year levels, overwhelms Brazil's reduction. Canada and Brazil, the 1st and 2nd ranked pulp import sources, respectively, account for over 94 percent of the pulp imported. Chile, while maintaining its number three rank, has nearly doubled its imports YTD. As a supply source, Indonesia has climbed from being the twelfth-ranked supplier during the first seven months of 2013 to the ninth-ranked supplier during the first seven months of 2014, posting a YTD increase of nearly 66 percent. 

Click image for larger view

Paper and paperboard imports (1.762 million tonnes YTD) have expanded by over 10 percent year-to-date compared to prior YTD activity. Once again Canada leads the way, accounting for nearly 79 percent of the YTD increase (149,000 tonnes). Canada is by far the most significant source of imported paper and paperboard in 2014, accounting for 89 percent of all paper and paperboard imported. One notable development on a percentage basis is Australia, which has vaulted from being the 29th ranked supplier during the first seven months of 2013 to the 8th ranked supplier during the first seven months of 2014, posting an eye-popping increase over 63,600 percent -- from 13 tonnes to 8,472 tonnes.

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.