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Economy in Brief

FIBER: Higher Lumber, Crude Oil & Metals Costs Lift Commodity Price Index 
by Tom Moeller  September 17, 2012

Despite the weakening in factory sector activity, there's recently been broad-based strength in industrial commodity prices. At 169.5, the latest price index from the Foundation for International Business and Economic Research (FIBER) recovered to its highest level since early-May and is roughly even with the level twelve months 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.

Leading the advance were prices in the miscellaneous group as they strengthened to a high for the economic recovery. The gain was paced by surging prices for structural panels (57.9% y/y) and framing lumber (31.7% y/y). Crude oil prices have been similarly strong, rising to $98.31 per barrel (10.0% y/y) on Friday from a late-June low of $77.79. In the metals group, the recent gain in prices wasn't far behind, though they remained down y/y. The roughly 10% recovery in just the last month was led by higher prices for aluminum and copper scrap. Steel scrap prices, however, remain extremely depressed, down one-quarter y/y.

Showing less strength has been textile prices. As of Friday, cotton prices gave back their August gain and still were roughly one-third below the year ago level.  

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

FIBER Industrial Materials Price Index (1990=100) 09/14/12 Y/Y % 2011 2010 2009
All Items 169.5 -0.1 172.9 157.7 121.4
 Textiles 77.1 -7.8 86.1 81.2 73.3
  Cotton (cents per pound) 68.9 -35.8 132.6 87.8 52.2
 Metals 238.1 -12.8 278.5 239.9 167.9
  Aluminum ($ per metric ton) 2,081.5 -11.0 2,400 2,172 1,662
  Copper Scrap (cents per pound) 365.3 -7.5 400.1 326.5 195.2
  Steel Scrap ($ per ton) 311.1 -25.9 412.4 325.7 203.4
 Crude Oil & Benzene 207.7 5.8 199.3 182.0 150.9
  Crude Oil (WTI, $ per Barrel) 98.3 10.0 95.1 79.5 61.4
 Miscellaneous 221.3 17.5 190.5 178.8 127.6
  Framing Lumber ($ per 1000 board ft.) 341 31.7 273 282 221
  Natural Rubber (cents per pound) 198.0 -24.7 261.8 181.8 83.0
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