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Economy in Brief

FIBER: Industrial Commodity Prices Strengthen Further
by Tom Moeller  July 20, 2020

• Prices continue to increase across sectors.

• Crude oil prices are strengthening.

• Metals rise while lumber prices soar.

Improved activity in the factory sector continues to bolster industrial materials prices. A 7.2% jump in June industrial output helped lift the Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) by 4.2% during the last four weeks. The price index remained at the highest level since the second week of March. Nevertheless, prices remained 6.2% lower than twelve months ago.

Prices in the crude oil & benzene group were strong, up 5.0% in the last four weeks. WTI crude oil prices improved to $40.43 per barrel, up from $25.28 in the middle of May. Prices remained down, however, from a high of $61.92 in the first week of January. Prices of the petro-chemical benzene rose 10.8% in the last four weeks but remained down by roughly one-half y/y. Excluding crude oil, industrial commodity prices rose 4.0% during the last four weeks but fell 4.5% during the last year.

Prices in the metals group increased 5.2% during the last four weeks as the cost of copper scrap rose 12.3%. The price of zinc increased 9.3% in four weeks but fell 11.0% y/y, while lead prices rose 4.7% (-7.2% y/y). Aluminum prices strengthened 4.8% but steel scrap prices fell 1.1%. Prices in the textile group posted a 1.0% increase as cotton prices strengthened 6.5%. This gain was accompanied by steady burlap costs (6.8% y/y), used for sacks, bags and gardening.

Also rising were prices in the miscellaneous group by 5.6% in the last month as framing lumber prices surged 43.3%, up 29.7% during the last six months. Plywood prices held steady (-5.7% y/y) and have been unchanged since December. Hide prices rose 3.3% (-25.9% y/y) during the last month. Natural rubber prices eased 0.9% over the last month and 6.2% over the last year.

Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.

FIBER Industrial Materials Price Index (%) 1-Mth 3-Mth 6-Mth 12-Mth 2019 2018 2017
All Items 4.2 10.5 -6.7 -6.2 1.1 -12.0 6.7
  Excluding Crude Oil 4.0 7.0 -5.0 -4.5 -0.6 -11.1 4.9
 Textiles 1.0 3.7 -1.0 1.5 -1.6 -2.8 3.0
  Cotton (cents per pound) 6.5 23.4 -11.0 4.9 -6.6 -9.2 9.8
 Metals 5.2 14.0 -5.0 -5.7 -4.3 -12.2 18.6
  Aluminum ($ per metric ton) 4.8 13.3 -7.4 -9.4 -6.5 -12.7 26.0
  Copper Scrap (cents per pound) 12.3 28.0 3.7 8.3 3.5 -16.1 29.3
  Steel Scrap ($ per ton) -1.1 4.4 -12.9 -12.7 -0.8 2.3 16.8
 Crude Oil & Benzene 5.0 32.3 -23.1 -23.0 20.2 -20.0 8.1
  Crude Oil (WTI, $ per Barrel) 8.0 86.7 -30.8 -30.0 35.5 -24.4 10.9
 Miscellaneous 5.6 3.7 -4.0 -3.9 -0.0 -14.8 -0.5
  Framing Lumber ($ per 1000 board ft.) 43.3 64.0 29.7 44.0 22.6 -23.1 20.0
  Natural Rubber (cents per pound) -0.9 10.3 -2.2 -6.2 10.7 -4.1 -29.6
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