Global| Jul 08 2019FIBER: 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) was little changed during the last four weeks. It declined, however, by 4.6% during the last three months as activity in [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) was little changed during the last four weeks. It declined, however, by 4.6% during the last three months as activity in the manufacturing sector weakened. Price movement amongst product categories varied greatly.
Showing strength were prices in the crude oil & benzene category which rose 5.5% during the last month. Crude oil prices increased modestly to $57.73 per barrel. Despite the rise, prices remained below the $65.28 high in late-April and lower than the $75.05 early-October peak. Prices for the petro-chemical benzene increased 11.7% during the last month but fell 11.7% y/y. Metals prices nudged 0.2% higher over the last month, reflecting a 2.4% increase in copper scrap prices. Steel scrap prices also rose 1.2% during the last month and the cost of aluminum gained 0.7%. Lead prices also improved 2.7% (-21.0% y/y). Offsetting these increases was a 4.6% m/m decline in the cost of zinc (-12.6% y/y). Prices in the textile group fell 1.2% during the last four weeks as cotton prices backpedaled 4.8%. Burlap prices also declined 3.5% (-1.3% y/y). Prices in the miscellaneous group were off 1.5% m/m as prices for structural panels declined 4.0% m/m and 39.6% y/y. Offsetting this weakness was a 6.2% rise in framing lumber costs and a 3.6% increase in the cost of natural rubber.
Improvement in industrial commodity prices may be forthcoming. The consensus forecast from the National Association for Business Economics (NABE) calls for a 2.4% rise in industrial output during all of 2019 and a 1.8% gain next year. During the last ten years, there has been a 52% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector output.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| All Items | 0.1 | -4.6 | 1.6 | -14.2 | -12.0 | 6.7 | 19.2 |
| Textiles | -1.2 | -3.0 | -1.6 | -4.6 | -2.8 | 3.0 | 2.8 |
| Cotton (cents per pound) | -4.8 | -15.7 | -9.8 | -24.8 | -9.2 | 9.8 | 10.2 |
| Metals | 0.2 | -8.5 | -1.2 | -12.7 | -12.2 | 18.6 | 32.9 |
| Aluminum ($ per metric ton) | 0.7 | -5.7 | -4.8 | -18.0 | -12.7 | 26.0 | 13.0 |
| Copper Scrap (cents per pound) | 2.4 | -8.1 | 0.6 | -9.4 | -16.1 | 29.3 | 17.3 |
| Steel Scrap ($ per ton) | 1.2 | -4.5 | 4.7 | -9.0 | 2.3 | 16.8 | 74.5 |
| Crude Oil & Benzene | 5.5 | 1.3 | 16.4 | -11.0 | -20.0 | 8.1 | 20.4 |
| Crude Oil (WTI, $ per Barrel) | 9.0 | -6.7 | 25.6 | -21.9 | -24.4 | 10.9 | 44.3 |
| Miscellaneous | -1.5 | -4.9 | 0.2 | -23.8 | -14.8 | -0.5 | 21.7 |
| Framing Lumber ($ per 1000 board ft.) | 6.2 | -4.2 | 3.9 | -36.9 | -23.1 | 20.0 | 12.9 |
| Natural Rubber (cents per pound) | 3.6 | 13.7 | 32.1 | 32.3 | -4.1 | -29.6 | 89.4 |
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.
More Economy in Brief
