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Economy in Brief

FIBER: Industrial Commodity Price Rise Continues
by Tom Moeller  March 19, 2021

• Crude oil prices lead recent improvement.

• Metals prices increase strongly.

The Industrial Materials Price Index, from the Foundation for International Business and Economic Research (FIBER), increased 1.7% during the four weeks ended March 19 pulling prices up roughly one-third y/y.

Prices in the crude oil & benzene group led the recent increase with a 4.8% gain during the last four weeks. A 5.8% rise in crude oil prices to $63.95 per barrel propelled the increase. Excluding crude oil, industrial commodity prices rose 1.4% in the same period and were 31.8% higher during the last year. Prices of the petro-chemical benzene rose 14.4% during the last month and by roughly two-thirds y/y.

Prices rose 2.0% in the miscellaneous group during the last four weeks. A 3.5% surge in natural rubber prices led the increase. It was countered by a 1.8% dip in framing lumber prices which remained 216.6% higher y/y. Plywood prices have been unchanged since December 2019.

Earlier price strength in the metals group moderated as prices moved 1.0% higher during the last four weeks. The gain was led by a 6.8% rise in the price of copper scrap. Steel scrap prices gained 4.6% while aluminum prices improved 3.7%. A 0.5% easing (+46.8% y/y) in zinc prices offset these gains, while lead prices fell 8.8% during the last four weeks (+13.3% y/y).

Prices in the textile group were little changed in the last four weeks as cotton prices fell 3.2%. The cost of burlap, used for sacks, bags and gardening, improved 6.4% in the last four weeks (27.5% y/y).

Support for commodity prices should continue in the near future. Forecasts from the National Association for Business Economics call for a 5.5% rise in industrial output this year, followed by a 3.8% gain in 2022.

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 2020 2019 2018
All Items 1.7 8.5 19.5 36.3 13.5 1.1 -12.0
  Excluding Crude Oil 1.4 7.1 17.2 31.8 16.0 -0.6 -11.1
 Textiles 0.1 3.5 6.7 10.2 3.9 -1.6 -2.8
  Cotton (cents per pound) -3.2 15.3 37.0 55.9 11.6 -6.6 -9.2
 Metals 1.0 9.9 27.7 51.3 20.4 -4.3 -12.2
  Aluminum ($ per metric ton) 3.7 7.4 24.3 33.6 13.1 -6.5 -12.7
  Copper Scrap (cents per pound) 6.8 16.2 33.6 75.3 26.9 3.5 -16.1
  Steel Scrap ($ per ton) 4.6 7.5 47.1 64.5 43.6 -0.8 2.3
 Crude Oil & Benzene 4.8 16.0 39.2 51.6 -9.7 20.2 -20.0
  Crude Oil (WTI, $ per Barrel) 5.8 34.7 64.6 133.8 -21.4 35.5 -24.4
 Miscellaneous 2.0 8.0 14.8 40.1 29.1 -0.0 -14.8
  Framing Lumber ($ per 1000 board ft.) -1.8 21.6 8.1 216.6 113.5 22.6 -23.1
  Natural Rubber (cents per pound) 3.5 2.3 22.9 53.7 48.6 10.7 -4.1
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