Global| Mar 19 2018FIBER: Industrial Commodity Price Gains Have Slowed
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) improved 1.2% (7.3% y/y) during the last four weeks as factory sector production around the world continued to improve. [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) improved 1.2% (7.3% y/y) during the last four weeks as factory sector production around the world continued to improve. The increase moderated, however, from earlier rates of growth as prices slipped during the last two weeks from the roughly four-year high reached in early-March.
Showing the greatest weakness recently were prices in the metals sector which fell 2.3% during the last month, but they improved 13.5% y/y. Weakness was led by a 2.6% one-month decline in aluminum prices. They increased, however, by 11.1% y/y. Copper scrap prices eased modestly last month but gained 18.7% y/y. To the upside were steel scrap prices by 2.8% during the last four weeks, rising 18.5% y/y. Amongst other metals, lead prices fell 6.3% during the last month, but gained 6.3% y/y. Zinc prices fell 6.8% during the last four weeks and rose 18.5% y/y.
Crude oil & benzene increased by a lessened 0.9% last month (9.8% y/y). Crude oil prices improved 1.9% (25.8% y/y) to an average $61.29 per barrel. Benzene prices improved 0.9% in the last four weeks and rose 4.1% y/y. Prices in the textile group gained 1.0% last month and rose 1.7% y/y. Cotton prices strengthened 9.2% m/m and by 8.0% y/y. A 3.7% decline (+4.6% y/y) in burlap prices offset this strength. Continuing strong were prices in the miscellaneous group which improved 4.5% over the last four weeks and by 5.5% y/y. Within this group, natural rubber prices rose 5.3% but they remained down 28.2% y/y. Framing lumber prices increased 3.9% last month and were up by roughly one-quarter y/y. Prices for structural panels increased 5.7% m/m and rose by one-third y/y.
Renewed strength in prices overall may be coming. The current industrial output consensus from the National Association for Business Economics (NABE) calls for a 2.3% rise in 2018. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, factory sector production in the European Union and Japan continues to improve.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| All Items | 1.2 | 6.7 | 5.3 | 7.3 | 6.7 | 19.2 | -16.3 |
| Textiles | 1.0 | 1.9 | 2.5 | 1.7 | 3.0 | 2.8 | 2.2 |
| Cotton (cents per pound) | 9.2 | 12.2 | 15.1 | 8.0 | 9.8 | 10.2 | 2.6 |
| Metals | -2.3 | 6.6 | 5.8 | 13.5 | 18.6 | 32.9 | -27.8 |
| Aluminum ($ per metric ton) | -2.6 | 4.2 | 0.1 | 11.1 | 26.0 | 13.0 | -19.2 |
| Copper Scrap (cents per pound) | -0.2 | 4.0 | 4.2 | 18.7 | 29.3 | 17.3 | -27.0 |
| Steel Scrap ($ per ton) | 2.8 | 24.1 | 16.6 | 18.5 | 16.8 | 74.5 | -53.8 |
| Crude Oil & Benzene | 0.9 | 0.8 | 11.7 | 9.8 | 8.1 | 20.4 | -19.4 |
| Crude Oil (WTI, $ per Barrel) | 1.9 | 6.7 | 26.4 | 25.8 | 10.9 | 44.3 | -35.8 |
| Miscellaneous | 4.5 | 13.7 | 4.2 | 5.5 | -0.5 | 21.7 | -18.0 |
| Framing Lumber ($ per 1000 board ft.) | 3.9 | 17.7 | 24.6 | 27.1 | 20.0 | 12.9 | -16.4 |
| Natural Rubber (cents per pound) | 5.3 | 10.2 | -7.8 | -28.2 | -29.6 | 89.4 | -22.5 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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