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Economy in Brief

FIBER: Industrial Commodity Prices Continue to Strengthen
by Tom Moeller  May 10, 2021

• Framing lumber prices lead recent gains.

• Metals prices move broadly higher.

The Industrial Materials Price Index, from the Foundation for International Business and Economic Research (FIBER), jumped 7.1% during the four weeks ended May 7, leaving prices up 56.2% y/y.

Prices in the miscellaneous group led the gain and rose 9.5%. Framing lumber prices surged 40.3% as home building remains strong. Plywood prices have been unchanged, however, since December 2019. Natural rubber prices rose 3.0% in the last four weeks.

Metals prices strengthened as costs jumped 8.9% during the last four weeks. The gain was paced by a 12.1% surge in the cost of copper scrap. The price of lead rose 10.4% (34.1% y/y) while aluminum prices strengthened 9.6%. Zinc prices moved 4.6% higher (52.0% y/y) while the price of steel scrap rose 0.8%.

Prices in the crude oil & benzene group rose 7.3% during the last four weeks. Prices for the petro-chemical benzene surged 22.6% (352.6%y/y) while crude oil prices improved 8.6% to $64.97 per barrel. Excluding crude oil, industrial commodity prices rose 7.0% in the last four weeks.

In the textile group, prices increased 2.2% during the last month as cotton prices jumped 12.6%. The cost of burlap, used for sacks, bags and gardening, improved 2.8% during the same period (29.8% y/y).

Industrial commodity prices should remain firm 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 7.1 13.6 29.0 56.2 13.5 1.1 -12.0
  Excluding Crude Oil 7.0 13.2 26.7 50.4 16.0 -0.6 -11.1
 Textiles 2.2 2.6 6.0 11.7 3.9 -1.6 -2.8
  Cotton (cents per pound) 12.6 8.6 29.2 68.0 11.6 -6.6 -9.2
 Metals 8.9 19.2 39.4 72.6 20.4 -4.3 -12.2
  Aluminum ($ per metric ton) 9.6 23.9 31.6 69.9 13.1 -6.5 -12.7
  Copper Scrap (cents per pound) 12.1 27.5 47.8 94.4 26.9 3.5 -16.1
  Steel Scrap ($ per ton) 0.8 -7.9 56.5 89.1 43.6 -0.8 2.3
 Crude Oil & Benzene 7.3 19.3 46.3 98.7 -9.7 20.2 -20.0
  Crude Oil (WTI, $ per Barrel) 8.6 18.8 72.4 185.7 -21.4 35.5 -24.4
 Miscellaneous 9.5 15.5 32.9 67.3 29.1 -0.0 -14.8
  Framing Lumber ($ per 1000 board ft.) 40.3 61.5 196.2 382.5 113.5 22.6 -23.1
  Natural Rubber (cents per pound) 3.0 9.8 -5.0 62.6 48.6 10.7 -4.1
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