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Economy in Brief

FIBER: Industrial Commodity Prices Edge Lower
by Tom Moeller  September 7, 2021

• Year-to-year strength continues to be broad-based.

• Crude oil prices remain below earlier highs.

The Industrial Materials Price Index, from the Foundation for International Business and Economic Research (FIBER), slipped 1.0% during the four weeks ended September 3. The price index remained 6.6% below its peak in the second week of May. Nevertheless, prices remained up 21.9% y/y due to continuing manufacturing sector strength.

Prices in the metals group fell 1.8% in the last four weeks reflecting a 5.0% decline in the cost of steel scrap. Copper scrap costs also fell 2.4% while lead prices eased 0.6% (+23.9% y/y). Offsetting these declines, aluminum prices rose 3.1% during the last four weeks (52.1% y/y), while zinc prices were little changed (18.9% y/y).

Crude oil & benzene group prices fell 1.6% in the last four weeks. The cost of crude oil weakened 2.1% over four weeks but last week prices improved to $68.77 per barrel. The price peaked at $73.82 early in July. Prices for the petro-chemical benzene fell 4.3% over four weeks but rose 133.9% y/y. Excluding crude oil, industrial commodity prices eased 0.9% in the last four weeks.

Prices in the miscellaneous group also declined 1.6% during the last four weeks. Framing lumber prices weakened by 13.2% but plywood prices held steady. Natural rubber prices rose 1.6% in the last four weeks.

Moving 0.9% higher during the last month were prices in the textile group as cotton prices increased 5.6%. Holding steady for four weeks was the cost of burlap (+24.2% y/y), used for sacks, bags and gardening.

Industrial commodity prices are likely to remain firm as the industrial production forecast from the National Association for Business Economics 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 -1.0 -4.5 2.9 21.9 13.5 1.1 -12.0
  Excluding Crude Oil -0.9 -4.8 2.3 19.7 16.0 -0.6 -11.1
 Textiles 0.9 2.5 2.2 9.7 3.9 -1.6 -2.8
  Cotton (cents per pound) 5.6 15.6 7.9 54.7 11.6 -6.6 -9.2
 Metals -1.8 0.2 12.4 42.9 20.4 -4.3 -12.2
  Aluminum ($ per metric ton) 3.1 10.8 23.1 52.1 13.1 -6.5 -12.7
  Copper Scrap (cents per pound) -2.4 -7.4 3.0 39.5 26.9 3.5 -16.1
  Steel Scrap ($ per ton) -5.0 -10.7 -1.5 52.5 43.6 -0.8 2.3
 Crude Oil & Benzene -1.6 -0.5 6.2 41.4 -9.7 20.2 -20.0
  Crude Oil (WTI, $ per Barrel) -2.1 0.7 12.4 62.5 -21.4 35.5 -24.4
 Miscellaneous -1.6 -15.3 -5.8 7.4 29.1 -0.0 -14.8
  Framing Lumber ($ per 1000 board ft.) -13.2 -61.6 -48.0 -42.8 113.5 22.6 -23.1
  Natural Rubber (cents per pound) 1.6 -17.5 -19.4 -6.1 48.6 10.7 -4.1
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