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Economy in Brief

FIBER: Industrial Commodity Prices Take a Breather
by Tom Moeller  June 14, 2021

• Framing lumber prices retreat after extraordinary gains.

• Metals prices soften.

• Prospects for prices remain good.

The Industrial Materials Price Index, from the Foundation for International Business and Economic Research (FIBER), fell 3.1% during the four weeks ended June 11. On a weekly basis, prices fell 1.0%, down for the fourth straight week. Despite the declines, prices were up 43.2% y/y as manufacturing sector activity remained firm.

Prices in the miscellaneous group led the decline and fell 5.7% during the last four weeks. Framing lumber prices weakened by 26.7%, but they remained 234.2% higher y/y as home building remained strong. Plywood prices were unchanged. Natural rubber prices weakened 6.3% in the last four weeks.

Prices in the crude oil & benzene group backed off 4.6% in four weeks. Prices for the petro-chemical benzene fell by one-third but remained more than double their year-ago level. Working 7.8% higher were crude oil prices to $69.64 per barrel, up from $38.08 twelve months ago. Excluding crude oil, industrial commodity prices fell 3.7% in the last four weeks.

Metals prices also backed away from recent highs, falling 2.1% during the last four weeks. The cost of copper scrap fell 6.0% and aluminum prices were off 2.6%. Lead prices fell 1.8%, but they remained up by one-quarter y/y. Steel scrap prices eased 0.7% but zinc prices were little changed (48.2% y/y).

In the textile group, prices eased 0.1% during the last month as cotton prices weakened 2.2%. A 2.7% rise (31.9% y/y) in the cost of burlap, used for sacks, bags and gardening, offset the decline.

Forecasts from the National Association for Business Economics suggest that industrial commodity prices should remain firm. It calls for a 5.9% rise in industrial output this year, followed by a 4.3% 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 -3.1 6.4 17.0 43.2 13.5 1.1 -12.0
  Excluding Crude Oil -3.7 6.3 15.2 41.0 16.0 -0.6 -11.1
 Textiles -0.1 0.7 4.9 9.3 3.9 -1.6 -2.8
  Cotton (cents per pound) -2.2 -0.3 19.6 45.4 11.6 -6.6 -9.2
 Metals -2.1 11.6 24.2 61.4 20.4 -4.3 -12.2
  Aluminum ($ per metric ton) -2.6 13.1 21.3 54.7 13.1 -6.5 -12.7
  Copper Scrap (cents per pound) -6.0 9.7 28.1 72.7 26.9 3.5 -16.1
  Steel Scrap ($ per ton) -0.7 12.4 27.8 91.0 43.6 -0.8 2.3
 Crude Oil & Benzene -4.6 3.1 21.6 50.0 -9.7 20.2 -20.0
  Crude Oil (WTI, $ per Barrel) 7.8 6.8 51.1 82.9 -21.4 35.5 -24.4
 Miscellaneous -5.7 8.3 19.1 56.9 29.1 -0.0 -14.8
  Framing Lumber ($ per 1000 board ft.) -26.7 21.1 63.9 234.2 113.5 22.6 -23.1
  Natural Rubber (cents per pound) -6.3 -5.3 -7.4 43.7 48.6 10.7 -4.1
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