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Economy in Brief

FIBER: Industrial Commodity Prices Remain Strong
by Tom Moeller  November 9, 2020

• Metals and textile prices improve.

• Crude oil costs ease.

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 1.7% (3.5% y/y) during the last four weeks. The increase pulled prices 4.6% higher during the last three months which occurred as factory sector production rose 11.3% during the third quarter.

Prices in the metals group strengthened 4.2% during the last four weeks as the price of aluminum rose 6.6%. The cost of copper scrap gained 3.6% and steel scrap prices improved 3.7%. Zinc prices rose 9.5% (-0.3% y/y) while lead prices increased 2.3% in recent weeks (-16.2% y/y).

Prices in the crude oil & benzene group increased 2.3% during the last four weeks. Prices of the petro-chemical benzene strengthened 22.4% in the same period but were down 22.7% y/y. A 4.4% decline in crude oil prices to $37.68 per barrel offset this increase. Excluding crude oil, industrial commodity prices rose 2.1% during the last four weeks and increased 6.2% during the last year.

Textile group prices improved 1.2% in the last four weeks as cotton prices strengthened 6.4%. The cost of burlap, used for sacks, bags and gardening improved 1.7% (25.0% y/y).

These price gains were offset by a 0.2% easing of prices in the miscellaneous group during the last month. Framing lumber costs were off by roughly one-quarter in four weeks. This decline was offset by a 23.3% rise in natural rubber prices. Plywood prices have been unchanged since December 2019 (-0.9% y/y).

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.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.

FIBER Industrial Materials Price Index (%) 4-Week 3-Month 6-Month 12-Month 2019 2018 2017
All Items 1.7 4.6 21.1 3.5 1.1 -12.0 6.7
  Excluding Crude Oil 2.1 5.4 18.8 6.2 -0.6 -11.1 4.9
 Textiles 1.2 1.4 5.3 3.4 -1.6 -2.8 3.0
  Cotton (cents per pound) 6.4 9.7 30.0 6.4 -6.6 -9.2 9.8
 Metals 4.2 3.8 23.8 3.3 -4.3 -12.2 18.6
  Aluminum ($ per metric ton) 6.6 9.1 29.1 3.4 -6.5 -12.7 26.0
  Copper Scrap (cents per pound) 3.6 4.5 31.5 14.9 3.5 -16.1 29.3
  Steel Scrap ($ per ton) 3.7 3.9 20.8 11.3 -0.8 2.3 16.8
 Crude Oil & Benzene 2.3 -1.2 35.8 -18.4 20.2 -20.0 8.1
  Crude Oil (WTI, $ per Barrel) -4.4 -8.9 65.7 -33.5 35.5 -24.4 10.9
 Miscellaneous -0.2 10.9 25.9 15.7 -0.0 -14.8 -0.5
  Framing Lumber ($ per 1000 board ft.) -26.0 -11.5 62.9 35.1 22.6 -23.1 20.0
  Natural Rubber (cents per pound) 23.3 47.2 71.1 68.3 10.7 -4.1 -29.6
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