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Economy in Brief

FIBER: Industrial Commodity Prices Remain Weak
by Tom Moeller  June 20, 2022

• Declines remain broad-based.

• Metals & wood prices are notably weak.

• Oil prices continue to strengthen.

Despite improvement in U.S. factory sector activity, the Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) weakened 1.7% during the last four weeks, though prices remained up 4.7% y/y. The decline left the price index 8.7% below its peak in the second week of March.

In the Miscellaneous group, prices weakened 5.7% during the last four weeks, led by a one-quarter decline in framing lumber prices. They have fallen 45.1% during the last year. Natural rubber prices eased 0.5% in four weeks, up 5.3% y/y.

Prices in the Metals group continue to fall, off 4.4% during the last four weeks and 22.8% since the peak in the second week of March. This decline was led by an 18.9% decline in steel scrap prices during the last four weeks while aluminum prices weakened 7.6% during that period. Tin prices fell 1.9%. Moving higher was the price of zinc, which is used in batteries, up 1.6% in four weeks and by nearly one-quarter y/y. Lead prices rose 1.0% in four weeks and copper scrap prices improved 0.4%.

Textile group prices slipped 0.2% in the last four weeks, but remained near thirty-year highs. Cotton prices weakened 2.2% in four weeks but rose by roughly nearly three-quarters y/y. The cost of burlap, used for sacks, bags and gardening, rose 1.5% in the last four weeks to a record high.

Offsetting these declines were higher prices in the Crude Oil & Benzene group, up 10.2% in four weeks. Rising 5.7% in four weeks was the per barrel price of crude oil to $118.14, which was just below the prior week's high. Prices remained up from $75.80 at the end of 2021. The price of the petro-chemical benzene strengthened 48.1% in four weeks and was 131.2% higher y/y. Excluding crude oil, industrial commodity prices weakened 2.1% in the latest four weeks but have risen 1.9% y/y.

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.

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