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Economy in Brief

FIBER: Industrial Commodity Prices Are Mixed
by Tom Moeller  August 4, 2014

Lower oil prices recently have countered increases in most other industrial commodity prices and left the overall trend muted. The industrial commodity price index, from the Foundation for International Business and Economic Research (FIBER), recently averaged 167.35, up 1.1% y/y but down 4.9% from the high reached in March 2013.

To the down-side were textile prices, off 5.0% since April (-3.7% y/y). Crude oil costs have been quite weak, falling to $98.08 per barrel (-8.5% y/y) from the June high of $107.53. Offsetting the weakness was a 17.3% increase (23.8% y/y) in prices for the petro-chemical benzene.

Firmer prices were seen in the metals category which increased 9.0% y/y. Aluminum prices have risen 11.0% y/y and 18.6% since early-February. Also up 10.0% y/y have been steel scrap prices, but they've given back some of the earlier strength in January. Copper scrap prices have risen just 0.8% y/y but they're up 9.6% since mid-March. Prices in the miscellaneous group were mixed. Lumber prices have been strong with the firmer housing market. Framing lumber prices have risen 8.1% y/y and structural panel prices are up 3.0% y/y, 15.3% since April. These remain down, however, by nearly one-quarter from the highs in April of last year. Working steadily lower have been natural rubber prices, off 20.1% y/y.

Further strength in industrial commodity prices is in the offing. The current industrial output projection from the National Association for Business Economics calls for 3.7% growth during all of this year then 3.5% growth in 2015. During the last ten years there has been a 52% correlation between the three-month change in prices and the change in factory sector output.

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

FIBER Industrial Materials Price Index (1990=100) 08/04/14 Y/Y % 2013 2012 2011
All Items 167.35 1.1 169.0 166.4 173.0
 Textiles 75.19 -3.7 78.18 77.9 86.1
  Cotton (cents per pound) 63.81 -21.4 79.6 74.5 132.8
 Metals 246.49 9.0 236.3 243.0 278.7
  Aluminum ($ per metric ton) 1,964.0 11.0 1,846.3 2,019.6 2,400.9
  Copper Scrap (cents per pound) 320.98 0.8 332.4 360.6 400.3
  Steel Scrap ($ per ton) 356.67 10.0 346.0 366.7 412.6
 Crude Oil & Benzene 214.79 0.8 207.7 204.1 199.3
  Crude Oil (WTI, $ per Barrel) 98.08 -8.5 97.9 94.2 95.0
 Miscellaneous 207.39 -1.0 218.3 205.3 190.6
  Framing Lumber ($ per 1000 board ft.) 385 8.1 383 321 273
  Natural Rubber (cents per pound) 139.74 -20.1 189.9 211.9 262.3
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