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Economy in Brief

FIBER: Industrial Commodity Prices Remain Weak
by Tom Moeller  July 11, 2012

Talk of global recession continues to pressure commodity prices downward. At 160.8, the latest price index from the Foundation for International Business and Economic Research (FIBER) was down 6.3% from its recent high and off 7.5% from one year ago. During the last ten years there has been a 44% correlation between the three-month change in prices and the change in factory sector industrial production.

In the metals group, prices have fallen 22.6% y/y led lower by aluminum prices which are off one quarter y/y and by nearly one-third from the 2011 peak. Copper scrap price declines also have been sizable and steel scrap prices have given up earlier strength. Textile prices remain weak (-10.7% y/y) led by declines in cotton prices, which are down nearly one-half y/y and by two-thirds from the 2011 peak.

Though they recently have bounced up a bit, lower crude oil prices (-9.6% y/y) have added to the weakness in the overall pricing environment. Prices for the petro-chemical benzene have strengthened considerably. In the miscellaneous group, prices have given up earlier strength. Lumber & plywood prices have fallen 6.2% since May while natural rubber prices also have fallen with lessened strength in global motor vehicle sales.

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

Monetary Policy, Money and Inflation from the Federal Reserve Bank of San Francisco is available here.

FIBER Industrial Materials Price Index (1990=100) 07/10/12 Y/Y % 2011 2010 2009
All Items 160.8 -7.5 172.9 157.7 121.4
 Textiles 76.0 -10.7 86.1 81.2 73.3
  Cotton (cents per pound) 65.2 -45.3 132.6 87.8 52.2
 Metals 225.7 -22.6 278.5 239.9 167.9
  Aluminum ($ per metric ton) 1,876.0 -23.5 2,400 2,172 1,662
  Copper Scrap (cents per pound) 341.0 -21.3 400.1 326.5 195.2
  Steel Scrap ($ per ton) 347.7 -16.6 412.4 325.7 203.4
 Crude Oil & Benzene 196.7 -1.2 199.3 182.0 150.9
  Crude Oil (WTI, $ per Barrel) 86.0 -9.6 95.1 79.5 61.4
 Miscellaneous 203.8 8.6 190.5 178.8 127.6
  Framing Lumber ($ per 1000 board ft.) 316 18.8 273 282 221
  Natural Rubber (cents per pound) 207.7 -4.3 261.8 181.8 83.0
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