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Economy in Brief

FIBER: Industrial Commodity Prices Remain Trendless
by Tom Moeller  October 14, 2013

Most commodity prices indexes have moved sideways since the recovery from recession. Friday's industrial commodity price index, from the Foundation for International Business and Economic Research (FIBER), was 165.5, unchanged since early-September.

Very recently there's been offsetting movement in two of the major price categories. To the downside have been prices in the crude oil & benzene grouping. Crude oil prices fell on Friday to $102.20 for WTI. That compares to a high of $110.15 in late-August. Prices for the petro-chemical benzene also reversed earlier strength. To the upside have been prices in the textile group where cotton and burlap prices have recovered following declines in early-September.

In the metals group, prices have been moving sideways. They are down, however, by roughly one-quarter since the 2011 high. Steel scrap prices have been trendless since the middle of last year. Aluminum and copper scrap prices recently firmed after declines this summer but they're still down roughly 10% versus last year. Prices in the miscellaneous group also have been moving sideways since June but they're down 15% since early last year. Recent strength in framing lumber costs has been offset by weakness in prices for structural panels. Natural rubber prices are down sharply from the early-September highs but also have been trendless during the last year.

The current industrial output projection from the National Association for Business Economics calls for 2.5% growth this year but then a pickup to 3.1% in 2014. These growth rates are little changed, however, from those since 2011 and thus suggest little support coming for 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.

FIBER Industrial Materials Price Index (1990=100) 10/11/13 Y/Y % 2012 2011 2010
All Items 165.5 -1.1 166.4 173.0 157.9
 Textiles 78.2 1.8 77.9 86.1 81.3
  Cotton (cents per pound) 79.8 20.7 74.5 132.8 87.8
 Metals 232.6 -5.5 243.0 278.7 240.0
  Aluminum ($ per metric ton) 1,772.0 -5.1 2,019.6 2,400.9 2,172.1
  Copper Scrap (cents per pound) 314.0 -8.8 360.6 400.3 326.8
  Steel Scrap ($ per ton) 324.3 -6.7 366.7 412.6 326.5
 Crude Oil & Benzene 209.0 1.2 204.1 199.3 182.0
  Crude Oil (WTI, $ per Barrel) 106.4 18.3 94.2 95.0 79.4
 Miscellaneous 206.1 -0.7 205.3 190.6 179.1
  Framing Lumber ($ per 1000 board ft.) 335 5.0 321 273 283
  Natural Rubber (cents per pound) 176.0 -13.1 211.9 262.3 182.9
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