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by Tom Moeller February 10, 2020
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) declined 2.0% during the four weeks ended Friday and 4.0% over the last year. The price index had been increasing as recently as the prior week. Last week's decline wiped away all of the gains logged since early-December.
Prices in the crude oil & benzene group declined 7.1% during the last four weeks as WTI crude oil prices weakened to $51.23 per barrel on Friday from a high of $61.92 four weeks earlier. Prices of the petro-chemical benzene also fell 1.3% in the last four weeks (+33.2% y/y) and reversed increases since late last year. Excluding crude oil, industrial commodity prices declined 1.0% during the last four weeks. Metals prices were off 6.2% over four weeks as steel scrap prices weakened 12.1% to the lowest level since late-November. The price of copper scrap also fell 7.7% in four weeks to a four-month low. Zinc prices were off 6.1% over four weeks (-19.4% y/y) and the cost of aluminum fell 4.6% m/m to the lowest level since late in 2016. Lead prices eased 2.2% m/m (-10.8% y/y). Prices in the textile group eased 0.3% during the last month. Cotton prices declined 3.8% to the lowest level since late-December and burlap prices improved 3.4% in four weeks (-2.3% y/y) to a seven month high. Working the other way, prices in the miscellaneous group improved 3.0% over four weeks as the cost of framing lumber gained 6.3%, but plywood prices held steady over that period (-11.9% y/y). Natural rubber prices declined 6.6% during the last month.
The recent weakness in industrial commodity prices may reflect weakness in demand from China. In the U.S., factory output improved 0.2% during December but remained down 1.3% y/y. During the last ten years, there has been a 65% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector production.
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 | -2.0 | -0.4 | 1.2 | -4.0 | 1.1 | -12.0 | 6.7 |
| Excluding Crude Oil | -1.0 | 0.2 | 1.6 | -3.9 | -0.6 | -11.1 | 4.9 |
| Textiles | -0.3 | 1.5 | 3.0 | -1.6 | -1.6 | -2.8 | 3.0 |
| Cotton (cents per pound) | -3.8 | 3.1 | 17.8 | -8.3 | -6.6 | -9.2 | 9.8 |
| Metals | -6.2 | -6.5 | -4.5 | -14.7 | -4.3 | -12.2 | 18.6 |
| Aluminum ($ per metric ton) | -4.6 | -5.8 | -2.5 | -9.4 | -6.5 | -12.7 | 26.0 |
| Copper Scrap (cents per pound) | -7.7 | -3.8 | -0.8 | -8.2 | 3.5 | -16.1 | 29.3 |
| Steel Scrap ($ per ton) | -12.1 | -0.7 | -9.3 | -20.3 | -0.8 | 2.3 | 16.8 |
| Crude Oil & Benzene | -7.1 | -1.0 | -0.1 | 3.7 | 20.2 | -20.0 | 8.1 |
| Crude Oil (WTI, $ per Barrel) | -17.2 | -9.5 | -5.1 | -5.1 | 35.5 | -24.4 | 10.9 |
| Miscellaneous | 3.0 | 4.0 | 5.4 | 0.6 | -0.0 | -14.8 | -0.5 |
| Framing Lumber ($ per 1000 board ft.) | 6.3 | 6.9 | 21.4 | 25.0 | 22.6 | -23.1 | 20.0 |
| Natural Rubber (cents per pound) | -6.6 | 2.3 | 3.1 | -4.8 | 10.7 | -4.1 | -29.6 |
