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Economy in Brief

FIBER: Industrial Commodity Prices Falter
by Tom Moeller  October 12, 2020

• Recent declines are broad-based.

• Crude oil costs rise.

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 1.3% during the last four weeks. Despite the decline, recent improvement in factory sector activity has raised prices 7.9% during the last three months.

Prices in the metals group declined 3.9% during the last four weeks as the price of steel scrap weakened 6.8%. Zinc prices fell 3.9% (-0.3% y/y) and copper scrap prices were off 3.2% in the same period. Lead prices fell 7.8% in the last four weeks (-18.3% y/y) while aluminum prices were little changed. Prices in the miscellaneous group fell by 1.7% in the last month as framing lumber prices plunged 17.7%. Natural rubber prices were little changed over the last month but were 42.5% higher y/y. Plywood prices have been unchanged since December 2019 (-0.9% y/y).

Textile group prices improved 0.6% in the last four weeks as cotton prices increased 4.6%. The cost of burlap, used for sacks, bags and gardening slipped 0.9% in the same period (23.6% y/y).

Prices in the crude oil & benzene group increased 1.1% during the last four weeks. WTI crude oil prices rose to $39.40 per barrel from $38.11 one month earlier. Prices of the petro-chemical benzene fell 0.8% in the last four weeks and were down 40.8% y/y. Excluding crude oil, industrial commodity prices fell 1.6% during the last four weeks but increased 6.0% 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 4.3% rise in output next year following a 7.6% 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 -1.3 7.9 18.1 3.9 1.1 -12.0 6.7
  Excluding Crude Oil -1.6 8.5 16.2 6.0 -0.6 -11.1 4.9
 Textiles 0.6 0.9 4.8 2.9 -1.6 -2.8 3.0
  Cotton (cents per pound) 4.6 2.2 27.8 3.9 -6.6 -9.2 9.8
 Metals -3.9 6.4 20.0 3.9 -4.3 -12.2 18.6
  Aluminum ($ per metric ton) -0.1 8.3 21.6 1.4 -6.5 -12.7 26.0
  Copper Scrap (cents per pound) -3.2 5.7 31.6 15.3 3.5 -16.1 29.3
  Steel Scrap ($ per ton) -6.8 9.8 17.6 19.6 -0.8 2.3 16.8
 Crude Oil & Benzene 1.1 -1.1 25.4 -19.7 20.2 -20.0 8.1
  Crude Oil (WTI, $ per Barrel) 3.4 -2.6 53.0 -25.5 35.5 -24.4 10.9
 Miscellaneous -1.7 20.1 24.6 18.2 -0.0 -14.8 -0.5
  Framing Lumber ($ per 1000 board ft.) -17.7 56.1 151.9 96.7 22.6 -23.1 20.0
  Natural Rubber (cents per pound) -0.1 25.2 41.4 42.5 10.7 -4.1 -29.6
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