• Metals prices decline.

• Price gains elsewhere continue.

The Industrial Materials Price Index, from the Foundation for International Business and Economic Research (FIBER), increased a modest 0.9% during the four weeks ended February 5 compared to double-digit growth in the last six months.

Earlier price strength in the metals group waned as prices fell 2.2% during the last four weeks, led lower by a 12.3% decline in steel scrap prices. Zinc prices also weakened 8.0% in four weeks (+16.1% y/y). The price of copper scrap fell 1.5% in the last four weeks while aluminum prices fell 2.0%. Lead prices eased 0.7% (+8.3% y/y).

To the upside, prices in the crude oil & benzene group rose 3.8% during the last four weeks. A 10.4% rise in crude oil prices to $54.69 per barrel paced the increase. Excluding crude oil, industrial commodity prices edged 0.3% higher in the last four weeks and 18.6% higher during the last year. Prices of the petro-chemical benzene held steady during the last month (-6.1% y/y).

Prices rose 2.4% in the miscellaneous group during the last four weeks. Framing lumber costs surged 10.3% with the strength in new home construction, but natural rubber prices fell 4.1%. Plywood prices have been unchanged since December 2019.

Prices in the textile group edged 0.7% higher in the last four weeks as cotton prices rose 3.2%. The cost of burlap, used for sacks, bags and gardening, improved 1.9% in the last four weeks (19.5% y/y).

Industrial commodity prices should continue to find support in the near future. Forecasts from the National Association for Business Economics call for a 4.4% rise in industrial output during 2021, following a 7.1% decline in production last 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.