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Economy in Brief

FIBER: Industrial Commodity Prices Remain Strong
by Tom Moeller  January 11, 2017

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 0.7% during the last four weeks and has risen 20.3% during the last twelve months. This follows strength during all of last year.

In the textile group, cotton prices moved 1.5% higher during the last month and were 16.2% higher versus last year. Also showing strength were burlap prices which improved 1.9% during the last month and by 9.8% y/y. In the miscellaneous group, natural rubber prices jumped 10.1% m/m as part of a doubling in prices which took place during all of last year. Continued strength in the housing market raised framing lumber prices slightly in recent months and 12.2% y/y. Prices for structural panels similarly increased modestly in the last month and by 3.1% y/y. Crude oil & benzene costs have strengthened. WTI crude oil prices moved over $50 per barrel last month and moved up by one-half y/y. Prices for the petro-chemical benzene similarly rose by one-third y/y. Earlier strength in the metals sector cooled as prices fell last month, but they're still up by one-third y/y. Copper scrap prices declined 5.0% during the last month, but rose 20.0% y/y. Aluminum prices eased 1.0% during the month, yet increased 16.0% y/y. Continuing strong were steel scrap prices which gained 20.0% last month as part of a three-quarters price rise over the last year. Zinc prices eased 6.2% last month, but have risen by roughly one-half y/y.

The current industrial output projection from the National Association for Business Economics (NABE) calls for a 1.7% increase in production during all of 2017, following a 0.9% decline this year. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, moderate growth in factory sector production worldwide is continuing.

Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.

FIBER Industrial Materials Price Index (%) 1-Mth 3-Mth 6-Mth 12-Mth 2016 2015 2014
All Items 0.7 6.6 8.4 20.3 19.2 -16.3 -10.0
 Textiles 0.4 2.4 3.7 3.5 2.8 2.2 -4.2
  Cotton (cents per pound) 1.5 6.2 12.2 16.2 10.2 2.6 -24.2
 Metals -1.6 9.4 14.3 34.6 32.9 -27.8 -8.7
  Aluminum ($ per metric ton) -1.0 2.7 4.6 16.0 13.0 -19.2 9.4
  Copper Scrap (cents per pound) -5.0 15.8 16.4 20.0 17.3 -27.0 -12.0
  Steel Scrap ($ per ton) 20.0 28.9 13.9 74.5 74.5 -53.8 -18.6
 Crude Oil & Benzene 3.6 6.7 10.9 23.6 20.4 -19.4 -26.5
  Crude Oil (WTI, $ per Barrel) 5.1 8.2 13.2 50.5 44.3 -35.8 -43.2
 Miscellaneous 1.7 7.6 6.0 22.0 21.7 -18.0 -6.7
  Framing Lumber ($ per 1000 board ft.) 1.1 0.8 3.5 12.2 12.9 -16.4 -1.6
  Natural Rubber (cents per pound) 10.1 43.2 38.1 100.7 89.4 -22.5 -32.3
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