Global| Jan 19 2015FIBER: Industrial Commodity Prices Fall Further
by:Tom Moeller
|in:Economy in Brief
Summary
Prices for industrial materials continue to exhibit broad-based decline. The industrial commodity price index from the Foundation for International Business and Economic Research (FIBER) fell 11.8% through last week versus one year [...]
Prices for industrial materials continue to exhibit broad-based decline. The industrial commodity price index from the Foundation for International Business and Economic Research (FIBER) fell 11.8% through last week versus one year ago. Declines amongst the component series were widespread.
The crude oil & benzene grouping led the weakness with a 35.0% y/y decline, reflecting a 49.7% y/y drop in the price of WTI crude oil to $46.72 per barrel. The price is down 56.2% since June. Prices for the petrochemical benzene fell nearly two-thirds from early-July. The metals group followed with an 11.0% y/y decline, off 14.2% versus the August high. Copper scrap prices fell 19.3% y/y and steel scrap prices were off 18.9% y/y. Aluminum prices were bucking the downward trend until recently. They're up 3.1% y/y but they've fallen 14.5% since late-November. Prices in the miscellaneous category also were weak. They've softened 4.7% from last year as natural rubber prices fell roughly one-quarter y/y. Framing lumber also eased 2.8% y/y. Prices for random lengths of structural composite remain 6.8% higher y/y but since late-October they've moved sideways. Textile prices also declined 4.7% during the last year, paced by a roughly one-quarter y/y decline in cotton prices. A 2.0% y/y increase in burlap prices countered this decline.
Future support for commodity prices may be on the way. The current industrial output projection from the National Association for Business Economics calls for 3.5% growth in industrial production in 2015. During the last ten years there has been a 52% correlation between the three-month change in prices and the change in industrial output.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.
| FIBER Industrial Materials Price Index (1990=100) | 1/16/15 | Y/Y % | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|
| All Items | 145.85 | -11.8 | 163.5 | 169.0 | 166.3 |
| Textiles | 74.24 | -4.7 | 76.8 | 78.2 | 77.8 |
| Cotton (cents per pound) | 58.64 | -27.0 | 73.6 | 79.6 | 74.4 |
| Metals | 213.96 | -11.0 | 237.8 | 236.2 | 242.7 |
| Aluminum ($ per metric ton) | 1,778.1 | 3.1 | 1,864.9 | 1,846.7 | 2,016.6 |
| Copper Scrap (cents per pound) | 267.91 | -19.3 | 311.7 | 332.3 | 360.3 |
| Steel Scrap ($ per ton) | 310.80 | -18.9 | 358.3 | 345.8 | 366.5 |
| Crude Oil & Benzene | 135.61 | -35.0 | 205.2 | 207.7 | 204.0 |
| Crude Oil (WTI, $ per Barrel) | 46.72 | -49.7 | 93.5 | 97.9 | 94.2 |
| Miscellaneous | 190.85 | -4.9 | 199.6 | 218.3 | 205.2 |
| Framing Lumber ($ per 1000 board ft.) | 383 | -2.8 | 383 | 383 | 321 |
| Natural Rubber (cents per pound) | 123.1 | -27.5 | 140.2 | 190.0 | 211.8 |
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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