Global| May 21 2018FIBER: Industrial Commodity Prices Are Mixed
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 0.5% during the last four weeks and 9.4% during the last year. Industrial materials prices overall rose by [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 0.5% during the last four weeks and 9.4% during the last year. Industrial materials prices overall rose by roughly one-third versus the early-2016 low. Prompting the strength during the last year has been a 1.9% rise in industrial sector output, following 1.7% growth during 2017. Recent price patterns have been mixed across sectors as price gains were logged for crude oil and lumber.
Showing the greatest strength recently were prices in the crude oil & benzene sector which increased 1.6% last month and 18.4% y/y. Crude oil prices improved 5.5% m/m and by nearly one-half y/y to an average $71.28 per barrel. Benzene prices eased, however, by 2.0% in the last four weeks (+14.2% y/y). In the miscellaneous group, prices rose 3.2% during the last four weeks and by 6.2% during the past year. Framing lumber prices strengthened 9.9% last month and by roughly one-quarter y/y. Prices for structural panels improved 3.2% during the last four weeks and rose by nearly one-third during the last year. Natural rubber prices strengthened 5.4% last month, but remained down 16.0% y/y. In the metals sector, prices eased 2.4% during the last month but improved 17.9% y/y. The recent weakness was led by a 5.9% one-month fall in aluminum prices (+20.4% y/y). Steel scrap prices also fell 2.8% during the last four weeks (+28.8% y/y), and copper scrap prices eased 0.5% last month (+23.0% y/y). Amongst other metals, lead prices were fairly steady during the last month, but gained 11.1% y/y. Zinc prices fell 3.2% over the last four weeks, but rose 20.3% y/y. In the textile group, overall prices were little changed m/m and have been steady for the last year. Cotton prices rose 1.2% over the last month (2.1% y/y), but burlap prices fell 2.4% m/m and were down 1.5% during the past year.
Further strength in prices overall may be coming. The consensus forecast for industrial output from the National Association for Business Economics (NABE) calls for a 3.3% rise in 2018 and 2.6% growth in 2019. During the last ten years, there has been 50% 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 | 0.5 | 2.0 | 6.1 | 9.4 | 6.7 | 19.2 | -16.3 |
| Textiles | -0.1 | 0.2 | 2.2 | 0.2 | 3.0 | 2.8 | 2.2 |
| Cotton (cents per pound) | 1.2 | 8.8 | 19.0 | 2.1 | 9.8 | 10.2 | 2.6 |
| Metals | -2.4 | -1.8 | 5.6 | 17.9 | 18.6 | 32.9 | -27.8 |
| Aluminum ($ per metric ton) | -5.9 | 7.2 | 9.6 | 20.4 | 26.0 | 13.0 | -19.2 |
| Copper Scrap (cents per pound) | -0.5 | -1.1 | 0.8 | 23.0 | 29.3 | 17.3 | -27.0 |
| Steel Scrap ($ per ton) | -2.8 | 7.6 | 33.0 | 28.8 | 16.8 | 74.5 | -53.8 |
| Crude Oil & Benzene | 1.6 | 5.6 | 7.4 | 18.4 | 8.1 | 20.4 | -19.4 |
| Crude Oil (WTI, $ per Barrel) | 5.5 | 10.5 | 27.7 | 46.5 | 10.9 | 44.3 | -35.8 |
| Miscellaneous | 3.2 | 5.1 | 9.1 | 6.2 | -0.5 | 21.7 | -18.0 |
| Framing Lumber ($ per 1000 board ft.) | 9.9 | 10.4 | 24.5 | 29.3 | 20.0 | 12.9 | -16.4 |
| Natural Rubber (cents per pound) | 5.4 | 9.5 | 12.9 | -16.0 | -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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