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Economy in Brief

FIBER: Industrial Commodity Prices Stage A Broad-based Retreat
by Tom Moeller  November 2, 2011

Industrial commodity prices weakened broadly with recent evidence of a lethargic economy. At 161.7, the latest price index from the Foundation for International Business and Economic Research (FIBER), which covers industrial materials prices, was at its lowest in twelve months. Year-to-year, the decline is a modest 2.9%, but since the April peak prices have fallen 13.6%.

Weakness amongst the FIBER index subgroups has been broad-based. Textiles prices were led lower by cotton which fell by nearly one-quarter y/y and have halved their spring peak. Crude oil & benzene prices also fell with crude oil at $90.74, though recently there has been tentative stabilization. Regardless, they remained down versus the spring, 2011 peak of $113.93. Prices in the miscellaneous group fell with lower lumber and rubber prices. Lumber prices recently have held up but rubber prices continued down. Prices in the metals group continued weak. Prices for copper scrap fell sharply, off by one-quarter from the peak, but recently found a floor. Steel scrap prices have just leveled off at their recovery high. Lead, zinc and aluminum prices remain depressed.

Overall, prices for industrial materials should be characterized as a coincident indicator of the economy. As such, recent weakness paints a picture of lost forward momentum. Glimmers of a rebound are to be found in various prices, but the lack of a broad-based recovery in prices suggests continued moderate economic growth.

Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.

FIBER Industrial Materials Price Index (1990=100) 10/28/11 Y/Y % 2010 2009 2008
All Items 161.7 -2.9 158 121 149
  Textiles 81.8 -5.8 81 73 74
  Cotton (cents per pound) 97.4 -21.4 87.8 52.5 58.0
 Metals 245.2 -10.5 240 168 233
  Aluminum ($ per metric ton) 2,180.3 -6.7 2,172 1,662 2,571
  Copper Scrap (cents per pound) 337.4 -13.6 327 197 280
  Steel Scrap ($ per ton) 418.3 26.2 326 204 350
 Crude Oil & Benzene 190.7 2.7 182 151 200
  Crude Oil ($ per Barrel) 90.74 8.3 79.43 61.71 99.73
 Miscellaneous 183.8 4.3 179 128 159
  Natural Rubber (cents per pound) 228.2 9.4 182 84 124
  Framing Lumber ($ per 1000 board ft.) 260 -1.2 282 221 253

FIBER is the Foundation for International Business & Economic Research

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