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Economy in Brief

FIBER: Industrial Commodity Price Increases Are Broad-based
by Tom Moeller  February 6, 2013

The factory sector is in a recovery mode. The latest industrial commodity price index from the Foundation for International Business and Economic Research (FIBER) rose yesterday to its highest level since June 2011. Tuesday's reading of 176.7, was up 5.8% from 12 months earlier and by 8.2% since early November. During the last ten years there has been a 42% correlation between the three-month change in prices and the change in factory sector industrial production.

Still leading the improvement were prices in the miscellaneous group, up by roughly one quarter versus last year and by one-third from the late 2011 low. Prices for structural panels (50.8% y/y) and framing lumber (39.1% y/y) have led the advance. Rubber prices (-12.6% y/y), however, have moved lower. In the textile group, cotton prices have recovered a sharp 17.2% from the November low, while crude oil prices also have been strong, up 14.8% (0.4% y/y) from their November low. Conversely, prices for the petrochemical benzene have moved lower. In the metals group, prices for lead (10.4% y/y) and copper scrap (-2.8% y/y) recently have been notably strong as they have moved off their fall lows. However, aluminum (+1.1% y/y) and steel scrap (-13.0% y/y) prices have risen moderately. 

The current forecast for industrial output from the National Association for Business Economics calls for 2.6% growth this year. That follows a 3.7% increase last year and is the weakest gain of the economic recovery. As such, the rate of improvement in industrial commodity prices should ease as 2013 progresses but the direction of change will be upward.

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

FIBER Industrial Materials Price Index (1990=100) 02/05/13 Y/Y % 2012 2011 2010
All Items 176.7 5.8 166.4 173.0 157.9
 Textiles 78.3 -3.1 77.9 86.1 81.3
  Cotton (cents per pound) 76.2 -14.4 74.5 132.8 87.8
 Metals 259.9 -1.4 243.0 278.7 240.0
  Aluminum ($ per metric ton) 2,078.0 -4.5 2,019.6 2,400.9 2,172.1
  Copper Scrap (cents per pound) 373.0 -2.8 360.6 400.3 326.8
  Steel Scrap ($ per ton) 349.3 -13.0 366.7 412.6 326.5
 Crude Oil & Benzene 210.57 3.0 204.1 199.3 182.0
  Crude Oil (WTI, $ per Barrel) 96.5 0.4 94.2 95.0 79.4
 Miscellaneous 229.2 22.7 205.3 190.6 179.1
  Framing Lumber ($ per 1000 board ft.) 387 35.3 321 273 283
  Natural Rubber (cents per pound) 206.0 -11.5 211.9 262.3 182.9
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