Global| Sep 14 2020FIBER: Industrial Commodity Prices Rise Broadly
by:Tom Moeller
|in:Economy in Brief
Summary
• Lumber & metals prices continue to strengthen. • Petroleum prices falter. The recent improvement in factory sector activity continues to support industrial materials prices. The Industrial Materials Price Index from the Foundation [...]
• Lumber & metals prices continue to strengthen.
• Petroleum prices falter.
The recent improvement in factory sector activity continues to support industrial materials prices. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 2.7% during the last four weeks. The price index has recovered all of the decline logged during the recession. Prices have risen by one-quarter from the late-April low and increased 3.9% y/y.
Prices in the miscellaneous group rose by 8.2% in the last month as framing lumber prices surged by just less than one-third. They have more than doubled y/y. Natural rubber prices strengthened 13.9% over the last month and 30.5% during the last year. Hide prices rose 9.2% during the last month (-25.3% y/y). Plywood prices have been unchanged since December 2019 (-0.9% y/y).
Prices in the metals group increased 2.8% during the last four weeks as the price of steel scrap increased 6.3% and by nearly one-quarter y/y. Copper scrap prices rose 5.5% in the last month and zinc prices strengthened 2.0% (4.1% y/y). Aluminum prices and lead prices were little changed during the last month. Prices in the textile group edged 0.3% higher in the last four weeks as cotton prices rose 1.5%. The cost of burlap, used for sacks, bags and gardening, rose 0.3% (21.1% y/y).
Prices in the crude oil & benzene group weakened 4.6% during the last four weeks. WTI crude oil prices declined to $38.11 per barrel from $42.02 one month earlier. Prices of the petro-chemical benzene fell 5.4% in the last four weeks and were down 40.2% y/y. Excluding crude oil, industrial commodity prices rose 3.4% during the last four weeks and increased 6.6% during the last year.
Strength in industrial output should lead to further improvement in industrial commodity prices. Expectations from the National Association for Business Economics call for a 2.8% rise in output next year following a 12.0% decline this year.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| All Items | 2.7 | 12.4 | 7.9 | 3.9 | 1.1 | -12.0 | 6.7 |
| Excluding Crude Oil | 3.4 | 13.1 | 7.3 | 6.6 | -0.6 | -11.1 | 4.9 |
| Textiles | 0.3 | 1.4 | 1.6 | 2.8 | -1.6 | -2.8 | 3.0 |
| Cotton (cents per pound) | 1.5 | 4.0 | 4.1 | 4.4 | -6.6 | -9.2 | 9.8 |
| Metals | 2.8 | 13.8 | 12.7 | 6.2 | -4.3 | -12.2 | 18.6 |
| Aluminum ($ per metric ton) | 0.3 | 10.9 | 5.0 | -1.4 | -6.5 | -12.7 | 26.0 |
| Copper Scrap (cents per pound) | 5.5 | 18.0 | 21.8 | 16.5 | 3.5 | -16.1 | 29.3 |
| Steel Scrap ($ per ton) | 6.3 | 16.7 | 12.7 | 22.4 | -0.8 | 2.3 | 16.8 |
| Crude Oil & Benzene | -4.6 | 2.9 | -2.5 | -22.0 | 20.2 | -20.0 | 8.1 |
| Crude Oil (WTI, $ per Barrel) | -9.3 | 0.1 | 18.3 | -32.8 | 35.5 | -24.4 | 10.9 |
| Miscellaneous | 8.2 | 25.9 | 14.3 | 17.6 | -0.0 | -14.8 | -0.5 |
| Framing Lumber ($ per 1000 board ft.) | 28.8 | 144.3 | 137.6 | 144.3 | 22.6 | -23.1 | 20.0 |
| Natural Rubber (cents per pound) | 13.9 | 27.0 | 24.5 | 30.5 | 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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