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Economy in Brief

FIBER: Industrial Commodity Prices Improve
by Tom Moeller  April 13, 2015

The industrial commodity price index from the Foundation for International Business and Economic Research (FIBER) improved roughly 2.0% during the last eight weeks reflecting broad-based improvement amongst several industrial sectors.

Prices in the crude oil & benzene grouping posted a 4.4% rise, but were still down by one-third y/y. The price for a barrel of WTI crude oil rallied to $50.81 as of Friday from the January low of $44.43, but was still off 50.7% y/y. The petro-chemical benzene also improved sharply versus February lows but remained down by nearly half y/y. Prices in the textile sector also showed improvement with a 1.5% rise since the middle of March. Cotton prices led the gain with an 8.1% rise but they're still down 23.1% y/y. In the metals sector, the earlier decline in prices stabilized, though the index remained near its lowest point since mid-2010. Copper scrap prices led the rebound with a 12.0% rise since the end of January (-8.9% y/y). They remain down, however, by roughly 40% from the yearly-2011 high. Zinc prices (+6.0% y/y) similarly firmed. Aluminum prices have not joined the improvement, remaining off 4.3% y/y and down by one-third since mid-2011. Steel scrap prices also remain weak, falling to the lowest level since the end of 2009 (-37.4% y/y). Prices in the miscellaneous materials grouping also remain depressed, off 10% y/y. Natural rubber prices have improved slightly this year but remain down by roughly one quarter y/y, off two-thirds since early 2011. Framing lumber prices were off 8.9% y/y but structural panel prices rose 4.5% y/y; still they remain one-quarter below the 2013 high.

Future support for commodity prices may be on the way. The current industrial output projection from the National Association for Business Economics calls for 3.7% growth in production in 2015 followed by a 3.2% rise next year. 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) 4/10/15 Y/Y % 2014 2013 2012
All Items 143.92 -13.4 163.5 169.0 166.3
 Textiles 75.73 -3.6 76.8 78.2 77.8
  Cotton (cents per pound) 64.16 -23.1 73.6 79.6 74.4
 Metals 202.50 -14.3 237.8 236.2 242.7
  Aluminum ($ per metric ton) 1,773.00 -4.3 1,864.9 1,846.7 2,016.6
  Copper Scrap (cents per pound) 274.35 -8.9 311.7 332.3 360.3
  Steel Scrap ($ per ton) 226.67 -37.4 358.3 345.8 366.5
 Crude Oil & Benzene 146.91 -32.0 205.2 207.7 204.0
  Crude Oil (WTI, $ per Barrel) 50.81 -50.7 93.5 97.9 94.2
 Miscellaneous 181.60 -10.1 199.6 218.3 205.2
  Framing Lumber ($ per 1000 board ft.) 337 -8.9 383 383 321
  Natural Rubber (cents per pound) 121.94 -23.5 140.2 190.0 211.8
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