Global| Feb 12 2018FIBER: Industrial Commodity Prices Are Strengthening
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 2.7% during the last four weeks following a 6.7% gain throughout all of last year. A 2.3% December-to-December [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 2.7% during the last four weeks following a 6.7% gain throughout all of last year. A 2.3% December-to-December increase in factory sector production prompted the increase, along with strengthening manufacturing sector activity abroad.
Showing the greatest increase were prices in the metals sector which increased 3.6% during the last month and 17.6% y/y. Strength was led by a 10.7% one-month rise in steel scrap prices which increased 14.9% y/y. Aluminum prices rose 1.0% over four weeks and by nearly one-quarter y/y. Copper scrap prices eased modestly last month, but also rose roughly one-quarter y/y. Amongst other metals, lead prices improved 1.0% during the last month and 11.3% y/y, while zinc prices gained 4.0% m/m during the last four weeks and 26.1% y/y. Prices in the miscellaneous group improved 6.0% last month and 1.0% y/y. Framing lumber prices jumped 10.3% last month and were up by one-third y/y. Prices for structural panels increased 12.8% last month and rose 32.9% y/y. Natural rubber costs also increased 4.9% last month, but still were off 42.2% y/y. To the downside were prices in the textile group which fell 3.7% last month, but rose 1.5% y/y. Cotton prices strengthened 6.9% m/m, but only by 1.2% y/y. Burlap prices improved 2.7% over the last four weeks and 12.6% y/y. Also easing were prices in the crude oil & benzene group by 0.1% last month (+5.1% y/y). Weakness was led by just a 0.4% m/m increase (19.4% y/y) in crude oil prices to an average $63.11 per barrel. Prices declined to $59.20 on Friday. Benzene prices fell 1.1% in the last four weeks and by 8.3% y/y.
Further price improvement may be coming. The current industrial output projection from the National Association for Business Economics (NABE) calls for a 2.3% rise in 2018. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, factory sector production in the European Union and Japan continues to improve.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| All Items | 2.7 | 4.3 | 6.3 | 6.1 | 6.7 | 19.2 | -16.3 |
| Textiles | -3.7 | 2.3 | 2.2 | 1.5 | 3.0 | 2.8 | 2.2 |
| Cotton (cents per pound) | 6.9 | 10.6 | 8.3 | 1.2 | 9.8 | 10.2 | 2.6 |
| Metals | 3.6 | 8.5 | 13.3 | 17.6 | 18.6 | 32.9 | -27.8 |
| Aluminum ($ per metric ton) | 1.0 | 3.3 | 11.7 | 20.8 | 26.0 | 13.0 | -19.2 |
| Copper Scrap (cents per pound) | -1.5 | 2.2 | 9.8 | 20.1 | 29.3 | 17.3 | -27.0 |
| Steel Scrap ($ per ton) | 10.7 | 24.3 | 20.8 | 14.9 | 16.8 | 74.5 | -53.8 |
| Crude Oil & Benzene | -0.1 | 4.5 | 14.7 | 5.1 | 8.1 | 20.4 | -19.4 |
| Crude Oil (WTI, $ per Barrel) | 0.4 | 11.0 | 28.2 | 19.4 | 10.9 | 44.3 | -35.8 |
| Miscellaneous | 6.0 | 2.1 | 0.0 | 1.0 | -0.5 | 21.7 | -18.0 |
| Framing Lumber ($ per 1000 board ft.) | 10.3 | 11.6 | 12.6 | 31.4 | 20.0 | 12.9 | -16.4 |
| Natural Rubber (cents per pound) | 4.9 | 4.4 | -5.8 | -42.2 | -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.
More Economy in Brief
