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Economy in Brief

FIBER: Industrial Commodity Price Changes Are Mixed
by Tom Moeller  March 04, 2013

What earlier was uniform strength in commodity prices has become mixed. The latest industrial commodity price index from the Foundation for International Business and Economic Research (FIBER) slipped during the last two weeks from its early-February high. Friday's reading of 176.0, nevertheless, was up 3.4% from 12 months earlier.

Continuing to lead pricing improvement have been prices in the miscellaneous group, up by nearly one-quarter versus last year and by one-third from the late-2011 low. Prices for structural panels (54.5% y/y) and framing lumber (46.1% y/y) have led the advance. Conversely, rubber prices (-19.1% y/y)  moved lower.

In the textile group, cotton prices have recovered by nearly one quarter from the November low. To the downside, metals prices have broken from their firming trend which was in place since November. Prices for copper scrap (-8.7% y/y), aluminum (-14.4% y/y) and lead (+4.5% y/y) have moved off their highs. However, steel scrap prices (-12.8% y/y) have remained firm. Crude oil & benzene prices also have been under pressure. The price for a barrel of WTI crude oil fell to $91.73 (-15.7% y/y) on Friday and the petro-chemical Benzene was down 10.0% from the December high.  

The current forecast from the National Association for Business Economics for industrial output calls for moderated 2.5% growth this year but then a pickup to 3.5% in 2014. These rates of growth are consistent with continued firmness in industrial commodity prices. 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.

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

Long-Term Interest Rates is the title of Friday's speech by Fed Chairman Ben S. Bernanke and it can be found here.

 

FIBER Industrial Materials Price Index (1990=100) 03/01/13 Y/Y % 2012 2011 2010
All Items 176.0 3.4 166.4 173.0 157.9
 Textiles 79.0 -0.9 77.9 86.1 81.3
  Cotton (cents per pound) 79.5 -4.2 74.5 132.8 87.8
 Metals 249.4 -5.9 243.0 278.7 240.0
  Aluminum ($ per metric ton) 1,959.5 -14.4 2,019.6 2,400.9 2,172.1
  Copper Scrap (cents per pound) 354.9 -8.7 360.6 400.3 326.8
  Steel Scrap ($ per ton) 352.7 -12.8 366.7 412.6 326.5
 Crude Oil & Benzene 205.0 -4.2 204.1 199.3 182.0
  Crude Oil (WTI, $ per Barrel) 91.73 15.7 94.2 95.0 79.4
 Miscellaneous 235.4 20.6 205.3 190.6 179.1
  Framing Lumber ($ per 1000 board ft.) 415 46.1 321 273 283
  Natural Rubber (cents per pound) 187.0 -19.1 211.9 262.3 182.9
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