Global| Jan 08 2018FIBER: Industrial Commodity Prices Continue to Improve
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 2.4% during the last four weeks following a 6.7% during all of last year. Recent price improvement came as U.S. [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 2.4% during the last four weeks following a 6.7% during all of last year. Recent price improvement came as U.S. factory output increased 2.3% y/y through November following little change in 2016.
Prices in the metals sector increased 6.5% during the last month, and rose 21.2% y/y. Strength was led by a 12.3% one-month rise in steel scrap prices which improved 16.8% y/y. Aluminum prices increased 10.2% over four weeks and one third y/y. The cost of copper scrap gained 7.7% over the last four weeks and 29.2% during the last year. Amongst other metals, lead prices improved 1.3% during the last month and 26.2% y/y, while zinc prices rose 5.6% during the last four weeks and 30.8% y/y. Prices in the crude oil & benzene group strengthened 1.5% last month, and gained 8.0% y/y. This rise was led by a 6.8% m/m increase (14.5% y/y) in crude oil prices to an average $61.15 per barrel, the highest level since December 2014. Benzene prices fell 5.1% in the last four weeks, but rose 14.3% y/y. In the textile group, prices increased 1.2% last month, and rose 2.5% y/y. Cotton prices strengthened 6.9% m/m and by roughly the same amount y/y. Burlap prices improved 1.0% over the last four weeks and 14.6% y/y. Prices in the miscellaneous group nudged 0.3% higher last month, but slipped 0.8% y/y. Framing lumber prices eased 0.7% in recent weeks, but remained up nearly one-quarter y/y. Prices for structural panels were little-changed last month, yet rose 17.6% y/y. Natural rubber costs rose 1.5% last month, but still were off nearly one-third y/y.
Further price improvement may be coming. The current industrial output projection from the National Association for Business Economics (NABE) calls for a 1.9% increase in factory output during all of 2017 and a 2.3% rise in 2018. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, factory sector production in the European Union and Japan is strengthening.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| All Items | 2.4 | 0.0 | 6.1 | 7.1 | 6.7 | 19.2 | -16.3 |
| Textiles | 1.2 | 2.3 | 2.5 | 2.5 | 3.0 | 2.8 | 2.2 |
| Cotton (cents per pound) | 6.9 | 13.9 | 13.4 | 6.5 | 9.8 | 10.2 | 2.6 |
| Metals | 6.5 | 2.7 | 13.9 | 21.2 | 18.6 | 32.9 | -27.8 |
| Aluminum ($ per metric ton) | 10.2 | 6.2 | 17.0 | 31.4 | 26.0 | 13.0 | -19.2 |
| Copper Scrap (cents per pound) | 7.7 | 10.7 | 22.2 | 29.2 | 29.3 | 17.3 | -27.0 |
| Steel Scrap ($ per ton) | 12.3 | 0.6 | 10.8 | 16.8 | 16.8 | 74.5 | -53.8 |
| Crude Oil & Benzene | 1.5 | 11.2 | 16.6 | 8.0 | 8.1 | 20.4 | -19.4 |
| Crude Oil (WTI, $ per Barrel) | 6.8 | 21.3 | 33.1 | 14.5 | 10.9 | 44.3 | -35.8 |
| Miscellaneous | 0.3 | -8.8 | -1.8 | -0.8 | -0.5 | 21.7 | -18.0 |
| Framing Lumber ($ per 1000 board ft.) | -0.7 | -0.7 | 9.1 | 20.6 | 20.0 | 12.9 | -16.4 |
| Natural Rubber (cents per pound) | 1.5 | -6.6 | -4.9 | -32.4 | -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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