Global| Feb 08 2019FIBER: Industrial Commodity Prices Improve
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 3.0% during the last month, but remained 12.1% below the prior year's level. Gains were broad-based, but [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 3.0% during the last month, but remained 12.1% below the prior year's level. Gains were broad-based, but notable for metals and crude oil.
Metals prices increased 7.2% last month led by a 17.6% m/m rise in steel scrap prices and a 9.1% increase in zinc prices. Copper scrap prices also rose a firm 4.3% and aluminum prices gained 1.1%. Except for steel scrap, however, prices remained sharply below the year-ago level. A 4.1% m/m gain in prices in the crude oil & benzene category also represented some recovery, but prices also remained well below last year's level. Crude oil prices rose 7.4% m/m to $53.96 per barrel, up from the $45.02 year-end low. They remained below the $75.05 peak early in October. Prices for the petro-chemical benzene recovered 6.9% during the last month, but remained one-third below the year-ago level. Prices in the miscellaneous group rose 1.1% m/m led by a 3.8% gain (3.5% y/y) in natural rubber prices. Framing lumber prices also gained 2.1% and structural panel prices improved 1.1%, but remained more than one-quarter below last year. In the textile group, prices were little changed m/m and down 2.7% y/y. Cotton prices rose 0.8% m/m (-7.2% y/y) while burlap prices gained 1.4% m/m (-13.4% y/y).
Improvement in industrial commodity prices followed a 1.1% December gain in factory sector output (3.3% y/y). The consensus forecast from the National Association for Business Economics (NABE) calls for a 2.7% rise in industrial output during all of 2019. During the last ten years, there has been a 66% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector output.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| All Items | 3.0 | -1.9 | -8.3 | -12.1 | -12.0 | 6.7 | 19.2 |
| Textiles | 0.3 | -0.9 | -3.5 | -2.7 | -2.8 | 3.0 | 2.8 |
| Cotton (cents per pound) | 0.8 | -8.2 | -18.5 | -7.2 | -9.2 | 9.8 | 10.2 |
| Metals | 7.2 | 2.3 | -0.6 | -12.1 | -12.2 | 18.6 | 32.9 |
| Aluminum ($ per metric ton) | 1.1 | -4.5 | -8.1 | -14.7 | -12.7 | 26.0 | 13.0 |
| Copper Scrap (cents per pound) | 4.3 | -0.8 | 0.3 | -12.1 | -16.1 | 29.3 | 17.3 |
| Steel Scrap ($ per ton) | 17.6 | -2.5 | -3.0 | 3.2 | 2.3 | 16.8 | 74.5 |
| Crude Oil & Benzene | 4.1 | -11.7 | -15.5 | -14.0 | -20.0 | 8.1 | 20.4 |
| Crude Oil (WTI, $ per Barrel) | 7.4 | -13.0 | -20.8 | -14.5 | -24.4 | 10.9 | 44.3 |
| Miscellaneous | 1.1 | -11.5 | -14.5 | -18.2 | -14.8 | -0.5 | 21.7 |
| Framing Lumber ($ per 1000 board ft.) | 2.1 | -0.3 | -27.4 | -30.1 | -23.1 | 20.0 | 12.9 |
| Natural Rubber (cents per pound) | 3.8 | 12.7 | 11.7 | 3.5 | -4.1 | -29.6 | 89.4 |
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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