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Economy in Brief

FIBER: Industrial Commodity Prices Increase
by Tom Moeller  February 19, 2019

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 2.8% during the last four weeks, but were 11.5% below the prior year's level. Individual commodity price gains were mixed amongst categories.

Metals prices increased 5.8% over the last month led by a 16.4% m/m rise in steel scrap prices, which eased at the end of last week, and a 6.6% increase in zinc prices. Copper scrap prices also firmed 4.2% and aluminum prices gained 2.0%. Prices in the miscellaneous group rose 3.0% m/m led by a 13.1% jump in framing lumber prices, though they remained one-quarter below the year-ago level. Structural panel prices fell 2.8% and also held more than 25% below last year. The cost of natural rubber rose 1.0% last month and 4.6% y/y. A 2.4% m/m gain (-12.2% y/y) in prices in the crude oil & benzene category was led by a 3.5% rise (-10.8% y/y) in crude oil prices to $53.65 per barrel, up from the $45.02 year-end low. Crude rose to $54.56 on Friday, but remained below the $75.05 peak early in October. Prices for petro-chemical benzene recovered 6.0% during the last month. Nevertheless, they continued to be one-third below the year-ago level. In the textile group, prices were little changed m/m and down 3.0% y/y. Cotton prices fell 3.9% m/m (-10.3% y/y) while burlap prices gained 1.4% m/m (-13.4% y/y).

Recent improvement in industrial commodity prices followed a 0.8% decline (+2.8% y/y) in factory sector output during January. The consensus forecast from the National Association for Business Economics (NABE) calls for a 2.7% rise in industrial output during all of 2019. During the last ten years, there has been a 66% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector output.

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 2018 2017 2016
All Items 2.8 -0.9 -6.6 -11.5 -12.0 6.7 19.2
 Textiles -0.4 -1.0 -3.0 -3.0 -2.8 3.0 2.8
  Cotton (cents per pound) -3.9 -9.7 -16.7 -10.3 -9.2 9.8 10.2
 Metals 5.8 1.8 1.9 -11.8 -12.2 18.6 32.9
  Aluminum ($ per metric ton) 2.0 -4.6 -8.9 -13.8 -12.7 26.0 13.0
  Copper Scrap (cents per pound) 4.2 0.5 2.6 -10.9 -16.1 29.3 17.3
  Steel Scrap ($ per ton) 16.4 -0.8 1.6 3.1 2.3 16.8 74.5
 Crude Oil & Benzene 2.4 -9.3 -14.9 -12.2 -20.0 8.1 20.4
  Crude Oil (WTI, $ per Barrel) 3.5 -6.7 -19.7 -10.8 -24.4 10.9 44.3
 Miscellaneous 3.0 1.0 -12.1 -17.4 -14.8 -0.5 21.7
  Framing Lumber ($ per 1000 board ft.) 13.1 11.4 -15.9 -24.8 -23.1 20.0 12.9
  Natural Rubber (cents per pound) 1.0 14.8 9.5 4.6 -4.1 -29.6 89.4

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