Global| Aug 19 2020FIBER: Industrial Commodity Prices Continue to Increase
by:Tom Moeller
|in:Economy in Brief
Summary
• Crude oil prices show further strength. • Metals and lumber prices jump. The upturn in factory sector activity continues to support industrial materials prices. A 3.3% jump in July industrial output helped lift the Industrial [...]
• Crude oil prices show further strength.
• Metals and lumber prices jump.
The upturn in factory sector activity continues to support industrial materials prices. A 3.3% jump in July industrial output helped lift the Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) by 5.1% during the last four weeks. The price index was at the highest level since the third week of February. Prices have risen 23.2% from the late-April low and increased 1.9% y/y.
Prices in the crude oil & benzene group were strong, up 87.3% since late-April. WTI crude oil prices improved to $42.02 per barrel, up from $15.66 early in May. Prices remained down, however, from a high of $61.92 in the first week of January. Prices of the petro-chemical benzene rose 8.3% in the last four weeks but remained down by roughly one-third y/y. Excluding crude oil, industrial commodity prices rose 5.2% during the last four weeks and increased 3.6% during the last year, up 15.1% since early-April.
Prices in the metals group increased 4.9% during the last four weeks as the cost of steel scrap rose 10.9%. The price of zinc increased 8.6% in four weeks and 5.1% y/y, while lead prices rose 4.0% (-7.2% y/y). Aluminum prices strengthened 6.0% during the last four weeks but copper scrap prices fell 1.0%. Prices in the textile group edged 0.2% higher in four weeks as the cost of burlap, used for sacks, bags and gardening, rose 5.6% (17.3% y/y). Cotton prices fell 2.5% during the same period.
Also strengthening were prices in the miscellaneous group by 10.6% in the last month as framing lumber prices surged by slightly less than one-third and nearly doubled y/y. Natural rubber prices surged 10.5% over the last month and 18.9% during the last year. Hide prices rose 4.0% (-23.0% y/y) during the last month. Plywood prices have been unchanged since December 2019 (-1.8% y/y).
Further strength in industrial output should lead to further improvement in industrial commodity prices. Expectations from the National Association for Business Economics call for a 2.8% rise in output next year following a 12.0% decline this year.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| All Items | 5.1 | 15.2 | 0.4 | 1.9 | 1.1 | -12.0 | 6.7 |
| Excluding Crude Oil | 5.2 | 12.7 | 1.5 | 3.6 | -0.6 | -11.1 | 4.9 |
| Textiles | 0.2 | 2.3 | -0.5 | 2.7 | -1.6 | -2.8 | 3.0 |
| Cotton (cents per pound) | -2.5 | 9.1 | -9.5 | 6.4 | -6.6 | -9.2 | 9.8 |
| Metals | 4.9 | 18.6 | 7.6 | 2.3 | -4.3 | -12.2 | 18.6 |
| Aluminum ($ per metric ton) | 6.0 | 20.7 | 3.0 | 0.2 | -6.5 | -12.7 | 26.0 |
| Copper Scrap (cents per pound) | -1.0 | 22.5 | 12.1 | 11.6 | 3.5 | -16.1 | 29.3 |
| Steel Scrap ($ per ton) | 10.9 | 15.2 | 7.5 | -0.4 | -0.8 | 2.3 | 16.8 |
| Crude Oil & Benzene | 3.0 | 31.8 | -16.3 | -17.0 | 20.2 | -20.0 | 8.1 |
| Crude Oil (WTI, $ per Barrel) | 3.9 | 66.2 | -17.1 | -23.7 | 35.5 | -24.4 | 10.9 |
| Miscellaneous | 10.6 | 16.2 | 3.8 | 10.9 | -0.0 | -14.8 | -0.5 |
| Framing Lumber ($ per 1000 board ft.) | 30.2 | 102.1 | 52.8 | 96.2 | 22.6 | -23.1 | 20.0 |
| Natural Rubber (cents per pound) | 10.5 | 20.9 | 16.4 | 18.9 | 10.7 | -4.1 | -29.6 |
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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