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Economy in Brief

FIBER: Industrial Commodity Prices Move Higher
by Tom Moeller  May 11, 2015

The industrial commodity price index from the Foundation for International Business and Economic Research (FIBER) improved 4.0% since the middle of March reflecting improvement amongst several industrial sectors.

Prices in the crude oil & benzene grouping posted a 17.1% rise. The price for a barrel of WTI crude oil rallied to $59.15 as of Friday from the January low of $44.43, but was still off 41.5% y/y. The petro-chemical benzene also improved sharply versus the February lows, but remained down by just over one-third y/y. In the metals sector, prices also rallied since mid-March by 7.0%. Zinc prices led the rebound with a 17.1% increase (15.9% y/y) followed by a 12.3% rise (-4.6% y/y) in copper scrap prices since the end of January. Aluminum prices also moved 8.5% higher during the last eight weeks (10.0% y/y). Steel scrap prices continued to decline to the lowest level since the end of 2009 (-38.7% y/y). Prices in the textile sector also showed improvement with a modest 1.3% rise since the middle of March (-4.4% y/y). Cotton prices rose 7.5% but they're still down by roughly one-quarter y/y. Prices in the miscellaneous materials grouping remained depressed reaching the lowest level since December 2011. Framing lumber prices reached the lowest point since the middle of 2012 (-13.2% y/y) and structural panel prices declined 5.3% y/y. Natural rubber prices had relative strength moving 23.6% higher since mid-October, a low base. They remained down by one-half from the 2011 peak.

Continued 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) 05/08/15 Y/Y % 2014 2013 2012
All Items 147.07 -11.2 163.5 169.0 166.3
 Textiles 75.57 -4.4 76.8 78.2 77.8
  Cotton (cents per pound) 63.31 -26.3 73.6 79.6 74.4
 Metals 211.26 -9.9 237.8 236.2 242.7
  Aluminum ($ per metric ton) 1,870.00 8.9 1,864.9 1,846.7 2,016.6
  Copper Scrap (cents per pound) 291.88 -3.8 311.7 332.3 360.3
  Steel Scrap ($ per ton) 230.00 -38.7 358.3 345.8 366.5
 Crude Oil & Benzene 159.37 -24.7 205.2 207.7 204.0
  Crude Oil (WTI, $ per Barrel) 59.15 -41.5 93.5 97.9 94.2
 Miscellaneous 180.68 -10.6 199.6 218.3 205.2
  Framing Lumber ($ per 1000 board ft.) 321 -13.2 383 383 321
  Natural Rubber (cents per pound) 136.69 -2.8 140.2 190.0 211.8
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