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Economy in Brief

FIBER: Industrial Commodity Prices Edge Higher
by Tom Moeller  October 23, 2020

• Increases are scattered.

• Crude oil costs continue to rise.

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) improved 0.2% during the last four weeks. The limited gain followed a 0.2% dip in September factory sector output, which followed four months of strong increase.

Prices in the crude oil & benzene group increased 2.7% during the last four weeks. WTI crude oil prices rose to $40.58 per barrel last week from $39.84 during all of September. Prices of the petro-chemical benzene strengthened 11.9% in the last four weeks but were down 31.6% y/y. Excluding crude oil, industrial commodity prices rose 0.1% during the last four weeks and increased 6.3% during the last year.

Textile group prices improved 1.7% in the last four weeks as cotton prices strengthened 9.9%. The cost of burlap, used for sacks, bags and gardening improved 1.6% (25.4% y/y).

Prices in the metals group improved 0.6% during the last four weeks as the price of aluminum rose 6.4%. The cost of copper scrap gained 1.2%, but steel scrap prices weakened 1.8%. Zinc prices improved 1.6% (-0.4% y/y) while lead prices fell 5.5% in the last four weeks (-20.6% y/y).

These price gains were offset by a 2.7% decline in prices in the miscellaneous group in the last month. Framing lumber costs were off 30.4% Offsetting this decline, natural rubber prices jumped 10.6% during October. Plywood prices have been unchanged since December 2019 (-0.9% y/y).

Strength in industrial output should lead to further improvement in industrial commodity prices. Expectations from the National Association for Business Economics call for a 4.3% rise in output next year following a 7.6% decline this year.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The com-modity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.

FIBER Industrial Materials Price Index (%) 4-Week 3-Month 6-Month 12-Month 2019 2018 2017
All Items 0.2 8.0 26.8 4.2 1.1 -12.0 6.7
  Excluding Crude Oil 0.1 8.5 17.4 6.3 -0.6 -11.1 4.9
 Textiles 1.7 2.4 5.4 3.4 -1.6 -2.8 3.0
  Cotton (cents per pound) 9.9 13.0 32.1 6.1 -6.6 -9.2 9.8
 Metals 0.6 7.1 22.9 5.0 -4.3 -12.2 18.6
  Aluminum ($ per metric ton) 6.4 12.4 25.9 7.2 -6.5 -12.7 26.0
  Copper Scrap (cents per pound) 1.2 5.2 33.9 17.7 3.5 -16.1 29.3
  Steel Scrap ($ per ton) -1.8 10.3 18.5 21.0 -0.8 2.3 16.8
 Crude Oil & Benzene 2.7 1.7 86.4 -16.8 20.2 -20.0 8.1
  Crude Oil (WTI, $ per Barrel) 1.3 -1.5 248.0 -25.6 35.5 -24.4 10.9
 Miscellaneous -2.7 16.7 23.0 15.5 -0.0 -14.8 -0.5
  Framing Lumber ($ per 1000 board ft.) -30.4 9.2 75.9 46.0 22.6 -23.1 20.0
  Natural Rubber (cents per pound) 10.6 39.7 52.4 54.0 10.7 -4.1 -29.6
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