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Economy in Brief

FIBER: Industrial Commodity Prices Rise Broadly
by Tom Moeller  September 14, 2020

• Lumber & metals prices continue to strengthen.

• Petroleum prices falter.

The recent improvement in factory sector activity continues to support industrial materials prices. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 2.7% during the last four weeks. The price index has recovered all of the decline logged during the recession. Prices have risen by one-quarter from the late-April low and increased 3.9% y/y.

Prices in the miscellaneous group rose by 8.2% in the last month as framing lumber prices surged by just less than one-third. They have more than doubled y/y. Natural rubber prices strengthened 13.9% over the last month and 30.5% during the last year. Hide prices rose 9.2% during the last month (-25.3% y/y). Plywood prices have been unchanged since December 2019 (-0.9% y/y).

Prices in the metals group increased 2.8% during the last four weeks as the price of steel scrap increased 6.3% and by nearly one-quarter y/y. Copper scrap prices rose 5.5% in the last month and zinc prices strengthened 2.0% (4.1% y/y). Aluminum prices and lead prices were little changed during the last month. Prices in the textile group edged 0.3% higher in the last four weeks as cotton prices rose 1.5%. The cost of burlap, used for sacks, bags and gardening, rose 0.3% (21.1% y/y).

Prices in the crude oil & benzene group weakened 4.6% during the last four weeks. WTI crude oil prices declined to $38.11 per barrel from $42.02 one month earlier. Prices of the petro-chemical benzene fell 5.4% in the last four weeks and were down 40.2% y/y. Excluding crude oil, industrial commodity prices rose 3.4% during the last four weeks and increased 6.6% during the last year.

Strength in industrial output should lead to further improvement in industrial commodity prices. Expectations from the National Association for Business Economics call for a 2.8% rise in output next year following a 12.0% decline this 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 2.7 12.4 7.9 3.9 1.1 -12.0 6.7
  Excluding Crude Oil 3.4 13.1 7.3 6.6 -0.6 -11.1 4.9
 Textiles 0.3 1.4 1.6 2.8 -1.6 -2.8 3.0
  Cotton (cents per pound) 1.5 4.0 4.1 4.4 -6.6 -9.2 9.8
 Metals 2.8 13.8 12.7 6.2 -4.3 -12.2 18.6
  Aluminum ($ per metric ton) 0.3 10.9 5.0 -1.4 -6.5 -12.7 26.0
  Copper Scrap (cents per pound) 5.5 18.0 21.8 16.5 3.5 -16.1 29.3
  Steel Scrap ($ per ton) 6.3 16.7 12.7 22.4 -0.8 2.3 16.8
 Crude Oil & Benzene -4.6 2.9 -2.5 -22.0 20.2 -20.0 8.1
  Crude Oil (WTI, $ per Barrel) -9.3 0.1 18.3 -32.8 35.5 -24.4 10.9
 Miscellaneous 8.2 25.9 14.3 17.6 -0.0 -14.8 -0.5
  Framing Lumber ($ per 1000 board ft.) 28.8 144.3 137.6 144.3 22.6 -23.1 20.0
  Natural Rubber (cents per pound) 13.9 27.0 24.5 30.5 10.7 -4.1 -29.6
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