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Economy in Brief

FIBER: Industrial Commodity Prices Remain In Retreat
by Tom Moeller  December 10, 2014

Prices for industrial materials are showing broad-based decline. The industrial commodity price index from the Foundation for International Business and Economic Research (FIBER) fell 7.4% as of yesterday versus one year ago. Declines amongst the component series were widespread

The crude oil & benzene grouping continued to lead the weakness with a 20.0% y/y decline, reflecting a 35.9% y/y decline in the price of WTI crude oil to $62.56 per barrel. That's down 41.8% since June. In addition, prices for the petrochemical benzene fell just over one-third from late-June. Prices in the miscellaneous category also were weak. They've softened 5.7% from last year as natural rubber prices fell by more than one-third y/y. Framing lumber also eased 5.7% y/y. Prices for random lengths of structural composite have weakened since November but remain 7.4% higher y/y. Textile prices also declined 4.1% during the last year, paced by a one-quarter y/y decline in cotton prices. A 3.8% y/y increase in burlap prices countered this decline. Metals prices were not quite as weak, but still fell 3.1% during the last year. Aluminum prices have been buoyant, up 12.1% y/y. Steel scrap prices, however, turned down recently by 14.3% y/y. Copper scrap prices are off 9.5% y/y.

Future support for commodity prices may be on the way. The current industrial output projection from the National Association for Business Economics calls for 3.5% growth in industrial production in 2015. During the last ten years there has been a 52% correlation between the three-month change in prices and the change in industrial output.

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

FIBER Industrial Materials Price Index (1990=100) 12/09/14 Y/Y % 2013 2012 2011
All Items 152.77 -7.4 169.0 166.4 173.0
 Textiles 74.15 -4.1 78.2 77.9 86.1
  Cotton (cents per pound) 58.01 -24.8 79.6 74.5 132.8
 Metals 227.98 -3.1 236.3 243.0 278.7
  Aluminum ($ per metric ton) 1,959.50 12.1 1,846.3 2,019.6 2,400.9
  Copper Scrap (cents per pound) 293.2 -9.5 332.4 360.6 400.3
  Steel Scrap ($ per ton) 309.00 -14.3 346.0 366.7 412.6
 Crude Oil & Benzene 166.37 -20.0 207.7 204.1 199.3
  Crude Oil (WTI, $ per Barrel) 62.56 -35.9 97.9 94.2 95.0
 Miscellaneous 190.06 -7.1 218.3 205.3 190.6
  Framing Lumber ($ per 1000 board ft.) 366 -5.7 383 321 273
  Natural Rubber (cents per pound) 110.95 -39.6 189.9 211.9 262.3
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