Global| Sep 09 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. The price index was down 11.8% y/y and remained at the lowest level since [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) was little changed during the last four weeks. The price index was down 11.8% y/y and remained at the lowest level since June 2016.
Prices amongst product categories were decidedly mixed. The cost of metals was off 2.1% (-9.7% y/y) over the last month, reflecting a 10.2% decline (-18.8% y/y) in steel scrap prices. Zinc prices fell 1.7% in the last four weeks (-7.9% y/y) while copper scrap prices slipped 0.9% last month (-4.4% y/y). The cost of aluminum eased 0.5% (-15.9% y/y) but lead prices increased 1.7% (-1.8% y/y). Improving were prices in the crude oil & benzene category as they rose 1.4%. Prices for the petro-chemical benzene increased 1.8% during the last month (-19.3% y/y). Crude oil prices improved to $55.33 per barrel by the end of the month but remained below their $75.05 early-October peak. Prices in the textile group edged 0.1% higher (-6.6% y/y) as cotton prices strengthened 2.1%. They remained down roughly one-third y/y. Burlap prices declined 2.6% m/m and -10.2% y/y. Also rising were prices in the miscellaneous group by 1.5% during the last four weeks (-17.4% y/y). Natural rubber prices rose 5.9% and were 6.5% higher y/y. To the downside was the cost of framing lumber which eased 0.6% (-24.1% y/y) during the last four weeks. Prices for structural panels fell 2.1% m/m and remained down nearly one-third y/y.
Economic activity will do little to support commodity prices anytime soon. Recessions outside of the U.S. are taking shape and U.S. output growth is projected to slow. Industrial production grew 4.0% last year. The consensus forecast from the National Association for Business Economics (NABE) calls for a lessened 2.4% rise during all of 2019 and a 1.8% gain next year. During the last ten years, there has been a 52% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector output.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| All Items | 0.1 | -3.0 | -7.0 | -11.8 | -12.0 | 6.7 | 19.2 |
| Textiles | 0.1 | -3.5 | -4.6 | -6.6 | -2.8 | 3.0 | 2.8 |
| Cotton (cents per pound) | 2.1 | -14.1 | -19.9 | -30.3 | -9.2 | 9.8 | 10.2 |
| Metals | -2.1 | -5.3 | -13.8 | -9.7 | -12.2 | 18.6 | 32.9 |
| Aluminum ($ per metric ton) | -0.5 | -1.5 | -7.1 | -15.9 | -12.7 | 26.0 | 13.0 |
| Copper Scrap (cents per pound) | -0.9 | -2.7 | -13.1 | -4.4 | -16.1 | 29.3 | 17.3 |
| Steel Scrap ($ per ton) | -10.2 | -12.8 | -18.6 | -18.8 | 2.3 | 16.8 | 74.5 |
| Crude Oil & Benzene | 1.4 | 2.8 | 2.9 | -11.6 | -20.0 | 8.1 | 20.4 |
| Crude Oil (WTI, $ per Barrel) | 2.9 | 4.9 | -1.1 | -19.5 | -24.4 | 10.9 | 44.3 |
| Miscellaneous | 1.5 | -3.0 | -7.2 | -17.4 | -14.8 | -0.5 | 21.7 |
| Framing Lumber ($ per 1000 board ft.) | -0.6 | 5.8 | -7.3 | -24.1 | -23.1 | 20.0 | 12.9 |
| Natural Rubber (cents per pound) | 5.9 | -16.7 | -9.4 | 6.5 | -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.
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