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Economy in Brief

FIBER: Industrial Commodity Prices Surge
by Tom Moeller  October 11, 2021

• Price increases are broad-based.

• Crude oil & cotton prices surge.

• Rubber prices slip further.

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 1.6% during the four weeks ended October 8. Continued improvement in industrial sector activity helped lift prices.

Crude oil & benzene prices strengthened 3.8% in the last four weeks. The cost of crude oil strengthened 13.1% over four weeks to $77.68 per barrel, the highest level since November 2014. Prices for the petro-chemical benzene fell 4.6% over four weeks but rose 117.4% y/y. Excluding crude oil, industrial commodity prices rose 1.0% in the last four weeks.

Prices in the textile group surged 2.4% during the last four weeks. Cotton prices jumped 15.0%, even more notably since the end of the month. The cost of burlap, used for sacks, bags and gardening improved 1.9% in four weeks (28.6% y/y).

Miscellaneous group rose 0.7% during the last four weeks as framing lumber prices jumped 5.6% to the highest level since the third week of July. Plywood prices, however, continued to trend sideways. Natural rubber prices declined 2.0% in the last four weeks.

Prices in the metals group rose 0.6% in the last four weeks reflecting a 4.3% surge in the cost of aluminum. Steel scrap prices rose 3.1%. Copper scrap costs fell 2.2% and zinc prices eased 0.8% (+29.3% y/y).

Industrial commodity prices are likely to remain firm. The industrial production forecast from the National Association for Business Economics calls for a 5.7% rise in industrial output this year, followed by a 4.2% 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 1.6 0.6 4.0 27.4 13.5 1.1 -12.0
  Excluding Crude Oil 1.0 0.4 2.7 24.1 16.0 -0.6 -11.1
 Textiles 2.4 4.0 6.6 11.9 3.9 -1.6 -2.8
  Cotton (cents per pound) 15.0 25.6 40.7 71.8 11.6 -6.6 -9.2
 Metals 0.6 0.5 12.1 49.5 20.4 -4.3 -12.2
  Aluminum ($ per metric ton) 4.3 15.4 29.2 65.4 13.1 -6.5 -12.7
  Copper Scrap (cents per pound) -2.2 -3.1 2.6 40.2 26.9 3.5 -16.1
  Steel Scrap ($ per ton) 3.1 -11.0 0.1 61.3 43.6 -0.8 2.3
 Crude Oil & Benzene 3.8 0.2 7.5 49.9 -9.7 20.2 -20.0
  Crude Oil (WTI, $ per Barrel) 13.1 5.4 29.8 97.2 -21.4 35.5 -24.4
 Miscellaneous 0.7 -2.0 -6.3 13.5 29.1 -0.0 -14.8
  Framing Lumber ($ per 1000 board ft.) 5.6 -15.4 -42.7 -10.6 113.5 22.6 -23.1
  Natural Rubber (cents per pound) -2.0 -7.5 -20.4 -9.5 48.6 10.7 -4.1
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