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Economy in Brief

FIBER: Industrial Commodity Prices Show Widespread Strength
by Tom Moeller  November 20, 2020

• Crude oil & metals prices lead the improvement.

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 3.1% (7.7% y/y) during the last four weeks and 19.4% over the last six months as the economy recovered from recession.

The gain was led by higher prices in the crude oil & benzene group which increased 6.0% during the last four weeks. Prices of the petro-chemical benzene strengthened 31.0% (-12.2% y/y). A 1.7% rise in crude oil prices to $41.27 per barrel accompanied the increase. Excluding crude oil, industrial commodity prices rose 3.1% during the last four weeks and increased 10.3% during the last year.

Metals group strengthened 5.8% during the last four weeks as the price of steel scrap rose 9.4% and aluminum costs rose 5.9%. Zinc prices rose 7.4% in recent weeks (12.9% y/y) while lead prices strengthened 8.0% (-3.8% y/y). The cost of copper scrap gained 3.1% over the last four weeks.

These price gains were accompanied by a 1.7% price rise in the miscellaneous group during the last month. Framing lumber costs rebounded 5.6%. This increase was accompanied by a 7.2% rise in natural rubber prices. Plywood prices have been unchanged since December 2019 (-0.9% y/y).

Prices in the textile group prices improved 0.3% in the last four weeks as cotton prices rose 0.6%. The cost of burlap, used for sacks, bags and gardening improved 1.9% (24.3% y/y).

Industrial commodity prices have been supported by improvement in factory sector output which rose 1.0% during October and has improved 19.1% since April. Forecasts 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 3.1 5.2 19.4 7.7 1.1 -12.0 6.7
  Excluding Crude Oil 3.1 5.7 18.9 10.3 -0.6 -11.1 4.9
 Textiles 0.3 2.5 4.4 3.9 -1.6 -2.8 3.0
  Cotton (cents per pound) 0.6 14.3 22.7 9.6 -6.6 -9.2 9.8
 Metals 5.8 7.2 27.6 12.9 -4.3 -12.2 18.6
  Aluminum ($ per metric ton) 5.9 12.3 34.0 11.9 -6.5 -12.7 26.0
  Copper Scrap (cents per pound) 3.1 8.2 33.1 20.8 3.5 -16.1 29.3
  Steel Scrap ($ per ton) 9.4 10.2 27.1 21.3 -0.8 2.3 16.8
 Crude Oil & Benzene 6.0 5.8 25.7 -13.6 20.2 -20.0 8.1
  Crude Oil (WTI, $ per Barrel) 1.7 -3.0 27.3 -27.7 35.5 -24.4 10.9
 Miscellaneous 1.7 5.3 22.5 18.2 -0.0 -14.8 -0.5
  Framing Lumber ($ per 1000 board ft.) 5.6 -20.3 71.9 49.3 22.6 -23.1 20.0
  Natural Rubber (cents per pound) 7.2 31.8 63.4 56.3 10.7 -4.1 -29.6
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