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Economy in Brief

Industrial Commodity Prices Slip
by Tom Moeller  October 21, 2022

• Latest easing reverses a piece of earlier gains.

• Trend level continues downward.

• Oil prices weaken while lumber prices rise.

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) dropped 0.4% last week (-12.2% y/y) after gains during the prior two weeks of 1.2% and 1.4%. Despite these increases, the price index eased 0.1% during the last four weeks and remained 20.3% below its peak in the second week of March.

Price declines were largest in Textiles. Prices here fell 3.1% in the last four weeks and were 4.5% lower y/y. Cotton prices declined 16.2% in four weeks and were off 21.9% y/y. The cost of burlap, used for sacks, bags and gardening, fell 3.5% in the last four weeks and weakened 6.2% y/y.

Prices in the Metals group followed with a 1.2% decline in the last four weeks, off 27.9% y/y. Tin prices fell 8.2% (50.5% y/y) and zinc prices fell 7.4% in four weeks, off 21.2% y/y. Zinc is used in the manufacture of batteries. Copper scrap prices weakened 2.6% in four weeks and were down 26.9% y/y. Offsetting these declines, lead prices rose 8.7% (-15.5% y/y) while steel scrap prices increased 1.7% (-24.0% y/y) in four weeks. Aluminum prices were little changed (-28.6% y/y).

In the Miscellaneous group, prices rose 1.7% (-8.8% y/y) during the last four weeks, led by a 6.2% rise in framing lumber prices. Nevertheless, they have fallen 27.6% during the last year. Natural rubber prices improved 6.6% but were down 4.9% y/y. Hide prices held steady over four weeks, but fell by 28.2% y/y.

Prices in the Crude Oil & Benzene group rose 3.8% during the last four weeks and have risen 1.5% y/y. The cost of West Texas crude oil rose 1.4% to $85.80 per barrel, up 3.7% y/y. Prices for the petro-chemical benzene strengthened 17.8% in four weeks and edged 0.5% higher y/y. The FIBER price index excluding crude oil eased 0.2% during the last four weeks and was 13.0% lower 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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