Global| Jun 22 2018FIBER: Industrial Commodity Prices Ease
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) slipped 0.5% during the last four weeks, but increased 12.7% during the last year. Industrial materials prices overall [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) slipped 0.5% during the last four weeks, but increased 12.7% during the last year. Industrial materials prices overall have risen by roughly one-third versus the early-2016 low. A 1.7% y/y increase in industrial sector output prompted the gain, following a year of similar growth during 2017.
Prices in the miscellaneous group exhibited the most strength with a 0.4% gain during the last four weeks and a 13.4% rise during the past year. Framing lumber prices improved 0.5% last month, up 43.8% y/y. Prices for structural panels improved 2.9% during the last four weeks and by 40.8% during the last year. Lower prices for natural rubber offset some of this strength with a 10.3% decline last month, down 6.6% y/y. In the metals sector, prices slipped 0.3% during the last month, but improved 17.7% y/y. Copper scrap costs strengthened 1.0% m/m and 21.7% y/y, but aluminum prices were off 3.1% m/m (+17.5% y/y). The cost of steel scrap eased 0.5% m/m, but rose by more than one-quarter y/y. The cost of lead eased 0.5% over the last four weeks (+13.3% y/y) and zinc prices rose 0.9% last month (19.6% y/y). In the textile group, prices overall eased 0.2% last month (+3.1%y/y). Cotton prices improved 0.5% over the last month (23.9% y/y), but burlap prices fell 2.9% m/m and were down a like amount during the past year. In the crude oil & benzene sector, prices declined 3.2% last month, but rose 19.3% y/y. Crude oil prices declined 8.6% m/m to an average $65.61 per barrel, but were up by one-half y/y. Benzene prices rose 0.9% in the last four weeks and 12.6% y/y.
Further strength in prices overall may be coming. The consensus forecast for industrial output from the National Association for Business Economics (NABE) calls for a 3.8% rise in 2018 and 2.8% growth in 2019. During the last ten years, there has been 50% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, factory sector production in the European Union and Japan continues to improve.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| All Items | -0.5 | 1.1 | 6.5 | 12.7 | 6.7 | 19.2 | -16.3 |
| Textiles | -0.2 | -0.2 | 1.0 | 3.1 | 3.0 | 2.8 | 2.2 |
| Cotton (cents per pound) | 0.5 | 5.2 | 13.5 | 23.9 | 9.8 | 10.2 | 2.6 |
| Metals | -0.3 | 0.6 | 3.2 | 17.7 | 18.6 | 32.9 | -27.8 |
| Aluminum ($ per metric ton) | -3.1 | 6.4 | 6.2 | 17.5 | 26.0 | 13.0 | -19.2 |
| Copper Scrap (cents per pound) | 1.0 | 1.9 | 0.7 | 21.7 | 29.3 | 17.3 | -27.0 |
| Steel Scrap ($ per ton) | -0.5 | 0.1 | 16.8 | 29.4 | 16.8 | 74.5 | -53.8 |
| Crude Oil & Benzene | -3.2 | 0.7 | 2.4 | 19.3 | 8.1 | 20.4 | -19.4 |
| Crude Oil (WTI, $ per Barrel) | -8.6 | 2.7 | 13.7 | 50.4 | 10.9 | 44.3 | -35.8 |
| Miscellaneous | 0.4 | 2.9 | 16.4 | 13.4 | -0.5 | 21.7 | -18.0 |
| Framing Lumber ($ per 1000 board ft.) | 0.5 | 12.8 | 32.5 | 43.8 | 20.0 | 12.9 | -16.4 |
| Natural Rubber (cents per pound) | -10.3 | -5.7 | 3.3 | -6.6 | -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
