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Economy in Brief

FIBER: Industrial Commodity Price Strength Continues
by Tom Moeller  February 14, 2022

• Crude oil prices surge.

• Steel scrap leads metals price increase.

• Falling lumber costs offset higher rubber prices.

The improvement in factory sector activity has given life to industrial commodity prices. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) strengthened 1.2% during the four weeks ended February 11 and increased 17.6% during the last year. The level of the price index stands at a record high for the series which dates back to January 1985.

Crude oil & benzene costs surged 5.1% in the last four weeks and 27.0% y/y. Crude oil costs alone gained 12.0% (55.9% y/y) as the cost of crude rose to $90.33 per barrel last week, up by more than one-half y/y. The price of the petro-chemical benzene improved 3.9% during the last four weeks and rose 45.6% y/y. Excluding crude oil, industrial commodity prices edged 0.5% higher in the last four weeks and gained 15.6% in the last year.

Prices in the metals group strengthened 3.4% in the last four weeks, up by one-third during the last year. Aluminum costs jumped 8.7% in the recent four weeks and by more than one-half during the last year. The cost of steel scrap rose 8.6% in four weeks and 22.1% y/y while zinc prices improved 2.3% in the last four weeks and 36.7% y/y. Copper scrap prices increased 1.5% in four weeks and increased by nearly one-quarter y/y.

Prices in the textile group rose 1.5% during the last four weeks and 9.3% y/y. Cotton prices strengthened 8.4% in four weeks and 50.9% y/y. The cost of burlap, used for sacks, bags and gardening, improved 1.9% in the last four weeks and rose by one-quarter y/y.

The miscellaneous price index, in contrast, declined by 2.9% during the last four weeks (+7.5% y/y). Framing lumber prices weakened 7.8% (+15.4% y/y). A 7.3% increase in natural rubber prices offset the decline, though they were still down 2.2% y/y.

Industrial commodity prices should remain strong. The National Association for Business Economics predicts a 4.0% rise in industrial output 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 2021 2020 2019
All Items 1.2 5.3 10.7 17.6 18.3 13.5 1.1
  Excluding Crude Oil 0.5 5.0 9.5 15.6 16.3 16.0 -0.6
 Textiles 1.5 1.4 6.3 9.3 9.5 3.9 -1.6
  Cotton (cents per pound) 8.4 7.1 38.5 50.9 49.9 11.6 -6.6
 Metals 3.4 6.5 11.3 33.2 31.8 20.4 -4.3
  Aluminum ($ per metric ton) 8.7 25.3 24.1 56.8 41.3 13.1 -6.5
  Copper Scrap (cents per pound) 1.5 0.6 5.1 21.9 23.2 26.9 3.5
  Steel Scrap ($ per ton) 8.6 3.1 9.2 22.1 10.3 43.6 -0.8
 Crude Oil & Benzene 5.1 5.6 12.5 27.0 28.7 -9.7 20.2
  Crude Oil (WTI, $ per Barrel) 12.0 10.1 32.5 55.9 57.5 -21.4 35.5
 Miscellaneous -2.9 7.3 12.8 7.5 9.8 29.1 -0.0
  Framing Lumber ($ per 1000 board ft.) -7.8 79.8 125.2 15.4 27.4 113.5 22.6
  Natural Rubber (cents per pound) 7.3 10.8 11.6 -2.2 -11.7 48.6 10.7
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