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Economy in Brief

Industrial Materials Prices Surge With Output
by Tom Moeller March 22, 2004

Prices for industrial materials have surged 13.4% since yearend, as measured by the JoC-ECRI index.

Higher prices for metals have led the gain with a 15.5% jump that reflects a 27.5% jump in steel scrap prices and a 32.2% rise in copper prices. Price gains for these metals have eased in recent weeks but zinc (11.0% YTD), tin (19.9%) and lead (15.1%) prices continue up.Aluminum prices are 7.9% higher this year.

Gains in metals prices have accompanied a 4.2% rise in factory sector production since its trough last Spring. During the last ten years there has been a 57% correlation between the level of industrial materials prices and the 6-month change in factory sector industrial production.

Textile prices were lower last week than at yearend led down a 5.3% drop in cotton prices.

Gold prices recently retraced some of the gain through early January which lifted the Handy & Harman base price to $425.50. At $412.00, gold prices recently were up 23.5% y/y.

Commodity Prices 3/19/04 12/31/03 Y/Y 2003 2002 2001
Gold: Handy & Harman Base Price ($/oz.) $412.00 $416.70 23.5% $363.13 $310.05 $271.06
Stainless Steel Scrap ($/gross ton) $1,613.00 $1,265.00 77.6% $953.75 $717.10 $650.52
Copper: High Grade (COMEX, $/Lb.) $1.38 $1.04 77.8% $0.81 $0.72 $0.73
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