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Economy in Brief

FIBER: Industrial Commodity Price Index Weakens Further
by Tom Moeller  August 20, 2021

• Framing lumber price declines are pronounced.

• Steel scrap & copper scrap prices fall.

• Crude oil costs decline sharply.

The Industrial Materials Price Index, from the Foundation for International Business and Economic Research (FIBER), eased 0.2% during the four weeks ended August 20. The price index has fallen 6.9% since its peak in the second week of May. Despite the weakness, prices were up 24.6% y/y as the manufacturing sector strengthened.

Prices in the crude oil & benzene group led the decline, falling 2.6% in four weeks. The cost of crude oil weakened 5.1% during the same period to $65.95 per barrel. The price peaked at $73.82 early in July. Prices for the petro-chemical benzene fell 3.4% but rose 130.9% y/y. Excluding crude oil, industrial commodity prices improved negligibly in the last four weeks.

Prices in the miscellaneous group fell 1.3% during the last four weeks. Framing lumber prices weakened by 17.8%. Plywood prices were unchanged. Natural rubber prices rose 6.8% in the last four weeks.

Offsetting these declines, metals prices gained 1.2% in the last four weeks reflecting a 6.5% strengthening in aluminum prices. Lead prices also rose 5.5% (25.1% y/y) while zinc prices gained 1.9% in the last four weeks (23.2% y/y). Falling were steel scrap prices by 6.6% in the same period and copper scrap prices eased 1.0%.

In the textile group, prices edged 0.8% higher during the last month as cotton prices increased 7.0%. Falling by 2.1% (25.0% y/y) was the cost of burlap, used for sacks, bags and gardening.

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.

Labor Productivity in a Pandemic from the Federal Reserve Bank of San Francisco can be found here.

FIBER Industrial Materials Price Index (%) 4-Week 3-Month 6-Month 12-Month 2020 2019 2018
All Items -0.2 -5.7 3.6 24.6 13.5 1.1 -12.0
  Excluding Crude Oil 0.1 -6.0 3.3 22.9 16.0 -0.6 -11.1
 Textiles 0.8 2.6 2.5 10.1 3.9 -1.6 -2.8
  Cotton (cents per pound) 7.0 16.1 7.5 57.5 11.6 -6.6 -9.2
 Metals 1.2 1.0 14.2 46.5 20.4 -4.3 -12.2
  Aluminum ($ per metric ton) 6.5 7.1 23.9 49.8 13.1 -6.5 -12.7
  Copper Scrap (cents per pound) -1.0 -9.9 8.7 41.6 26.9 3.5 -16.1
  Steel Scrap ($ per ton) -6.6 -8.3 9.4 59.2 43.6 -0.8 2.3
 Crude Oil & Benzene -2.6 -4.1 8.4 38.6 -9.7 20.2 -20.0
  Crude Oil (WTI, $ per Barrel) -5.1 1.4 9.1 55.1 -21.4 35.5 -24.4
 Miscellaneous -1.3 -17.8 -6.1 13.4 29.1 -0.0 -14.8
  Framing Lumber ($ per 1000 board ft.) -17.8 -68.5 -53.4 -37.6 113.5 22.6 -23.1
  Natural Rubber (cents per pound) 6.8 -16.5 -14.3 9.3 48.6 10.7 -4.1
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