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Economy in Brief

FIBER: Industrial Commodity Prices Continue to Strengthen
by Tom Moeller  January 13, 2020

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 1.7% during the four weeks ended Friday and 3.9% over the last three months. The price index increased 0.8% y/y.

Prices in the crude oil & benzene group rose 2.7% during the last four weeks as WTI crude oil prices strengthened to $61.86 per barrel on Friday. Prices of the petro-chemical benzene also rose 4.8% in the last four weeks (44.2% y/y). Metals prices increased 1.8% over four weeks as the cost of steel scrap improved 2.8% and the price of copper scrap also rose 1.8%. Zinc prices rose 5.7% over four weeks (-6.3% y/y) and lead prices improved 0.4% m/m (-2.0% y/y). Aluminum prices moved 1.3% higher in the last four weeks. Prices in the miscellaneous group improved 1.4% over four weeks as the cost of natural rubber gained 1.5%. The price of framing lumber eased 0.3% but plywood costs held steady over four weeks (-11.0% y/y). Prices in the textile group increased 1.3% during the last month. Cotton prices rose 6.7% and burlap prices improved 2.7% (-4.1% y/y).

The recent improvement in industrial commodity prices followed a 1.1% rise (-0.9% y/y) in U.S. factory output during November, which had declined in three of the prior four months. The consensus forecast from the National Association for Business Economics (NABE) calls for a modest 0.9% rise in factory sector output this year. During the last ten years, there has been a 71% 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 2019 2018 2017
All Items 1.7 3.9 0.0 0.8 1.1 -12.0 6.7
 Textiles 1.3 2.5 1.5 -1.1 -1.6 -2.8 3.0
  Cotton (cents per pound) 6.7 11.3 12.0 -3.9 -6.6 -9.2 9.8
 Metals 1.8 4.4 -0.6 -2.5 -4.3 -12.2 18.6
  Aluminum ($ per metric ton) 1.3 3.2 -0.9 -4.0 -6.5 -12.7 26.0
  Copper Scrap (cents per pound) 1.8 8.4 4.3 3.8 3.5 -16.1 29.3
  Steel Scrap ($ per ton) 2.8 25.9 0.3 6.5 -0.8 2.3 16.8
 Crude Oil & Benzene 2.7 7.1 1.8 16.1 20.2 -20.0 8.1
  Crude Oil (WTI, $ per Barrel) 4.7 16.9 4.9 23.2 35.5 -24.4 10.9
 Miscellaneous 1.4 2.9 -1.5 -1.2 -0.0 -14.8 -0.5
  Framing Lumber ($ per 1000 board ft.) -0.3 18.2 10.0 20.1 22.6 -23.1 20.0
  Natural Rubber (cents per pound) 1.5 14.3 -9.5 5.8 10.7 -4.1 -29.6
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