Global| Sep 11 2017FIBER: Industrial Commodity Prices Remain Strong
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 1.8% during the last four weeks and gained 13.4% during the last twelve months. During all of last year prices [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 1.8% during the last four weeks and gained 13.4% during the last twelve months. During all of last year prices rose 19.2%. The index level of 159.2 stood at the highest point since October 2014. Recent price improvement comes at a time when factory output increased 1.3% y/y following a 0.7% rise in 2016.
Prices in the metals sector increased 4.9% during the last four weeks and have risen more than one-quarter y/y. Steel scrap prices improved 6.0% during the last month, rising by one-third y/y. Copper scrap prices increased 7.7% over the last four weeks and rose by nearly one-half during the last year. Aluminum prices gained 5.8% in one month and also by roughly one-third y/y. In the textile group, prices rose 1.2% during the last month, and rose 4.9% y/y. Cotton prices recently strengthened 6.3% and improved 7.5% y/y. Burlap prices moved 1.8% higher over the last four weeks, and worked 40.1% higher y/y. In the miscellaneous group, prices were little changed during the last month but rose 12.1% y/y. Prices for structural panels firmed 15.0% in the last month and rose 17.9% y/y. Framing lumber prices declined 5.6% in recent weeks, but were up 13.8% y/y. Natural rubber costs improved 7.5% m/m and jumped 17.5% y/y, following a sharp decline early this year. Crude oil & benzene costs nudged 0.9% higher (3.7% y/y) last month. WTI crude oil prices declined 1.1% over the last four weeks to $48.70 per barrel, but still were up versus the $43.61 low late in June. Prices for the petro-chemical benzene strengthened 6.9% during the last four weeks and were up 7.7% y/y.
Further price improvement may be coming. The current industrial output projection from the National Association for Business Economics (NABE) calls for a 1.5% increase in output during all of 2017 and a 2.4% rise in 2018. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, factory sector production in the European Union and Japan is strengthening.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| All Items | 1.8 | 5.4 | 1.7 | 13.4 | 19.2 | -16.3 | -10.0 |
| Textiles | 1.2 | 0.1 | -0.2 | 4.9 | 2.8 | 2.2 | -4.2 |
| Cotton (cents per pound) | 6.3 | -1.1 | -2.9 | 7.5 | 10.2 | 2.6 | -24.2 |
| Metals | 4.9 | 13.7 | 11.8 | 29.6 | 32.9 | -27.8 | -8.7 |
| Aluminum ($ per metric ton) | 5.8 | 9.1 | 11.1 | 31.8 | 13.0 | -19.2 | 9.4 |
| Copper Scrap (cents per pound) | 7.7 | 23.1 | 18.4 | 48.7 | 17.3 | -27.0 | -12.0 |
| Steel Scrap ($ per ton) | 6.0 | 5.6 | 12.7 | 34.6 | 74.5 | -53.8 | -18.6 |
| Crude Oil & Benzene | 0.9 | 1.5 | -5.6 | 3.7 | 20.4 | -19.4 | -26.5 |
| Crude Oil (WTI, $ per Barrel) | -1.1 | 3.5 | -6.1 | 6.0 | 44.3 | -35.8 | -43.2 |
| Miscellaneous | -0.1 | 4.8 | -1.6 | 12.1 | 21.7 | -18.0 | -6.7 |
| Framing Lumber ($ per 1000 board ft.) | -5.6 | 0.2 | -1.0 | 13.8 | 12.9 | -16.4 | -1.6 |
| Natural Rubber (cents per pound) | 7.5 | 7.0 | -24.1 | 17.5 | 89.4 | -22.5 | -32.3 |
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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