Global| Nov 20 2020FIBER: Industrial Commodity Prices Show Widespread Strength
by:Tom Moeller
|in:Economy in Brief
Summary
• Crude oil & metals prices lead the improvement. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 3.1% (7.7% y/y) during the last four weeks and 19.4% over [...]
• Crude oil & metals prices lead the improvement.
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 3.1% (7.7% y/y) during the last four weeks and 19.4% over the last six months as the economy recovered from recession.
The gain was led by higher prices in the crude oil & benzene group which increased 6.0% during the last four weeks. Prices of the petro-chemical benzene strengthened 31.0% (-12.2% y/y). A 1.7% rise in crude oil prices to $41.27 per barrel accompanied the increase. Excluding crude oil, industrial commodity prices rose 3.1% during the last four weeks and increased 10.3% during the last year.
Metals group strengthened 5.8% during the last four weeks as the price of steel scrap rose 9.4% and aluminum costs rose 5.9%. Zinc prices rose 7.4% in recent weeks (12.9% y/y) while lead prices strengthened 8.0% (-3.8% y/y). The cost of copper scrap gained 3.1% over the last four weeks.
These price gains were accompanied by a 1.7% price rise in the miscellaneous group during the last month. Framing lumber costs rebounded 5.6%. This increase was accompanied by a 7.2% rise in natural rubber prices. Plywood prices have been unchanged since December 2019 (-0.9% y/y).
Prices in the textile group prices improved 0.3% in the last four weeks as cotton prices rose 0.6%. The cost of burlap, used for sacks, bags and gardening improved 1.9% (24.3% y/y).
Industrial commodity prices have been supported by improvement in factory sector output which rose 1.0% during October and has improved 19.1% since April. Forecasts from the National Association for Business Economics call for a 4.3% rise in output next year following a 7.6% decline this year.
The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.
| FIBER Industrial Materials Price Index (%) | 4-Week | 3-Month | 6-Month | 12-Month | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| All Items | 3.1 | 5.2 | 19.4 | 7.7 | 1.1 | -12.0 | 6.7 |
| Excluding Crude Oil | 3.1 | 5.7 | 18.9 | 10.3 | -0.6 | -11.1 | 4.9 |
| Textiles | 0.3 | 2.5 | 4.4 | 3.9 | -1.6 | -2.8 | 3.0 |
| Cotton (cents per pound) | 0.6 | 14.3 | 22.7 | 9.6 | -6.6 | -9.2 | 9.8 |
| Metals | 5.8 | 7.2 | 27.6 | 12.9 | -4.3 | -12.2 | 18.6 |
| Aluminum ($ per metric ton) | 5.9 | 12.3 | 34.0 | 11.9 | -6.5 | -12.7 | 26.0 |
| Copper Scrap (cents per pound) | 3.1 | 8.2 | 33.1 | 20.8 | 3.5 | -16.1 | 29.3 |
| Steel Scrap ($ per ton) | 9.4 | 10.2 | 27.1 | 21.3 | -0.8 | 2.3 | 16.8 |
| Crude Oil & Benzene | 6.0 | 5.8 | 25.7 | -13.6 | 20.2 | -20.0 | 8.1 |
| Crude Oil (WTI, $ per Barrel) | 1.7 | -3.0 | 27.3 | -27.7 | 35.5 | -24.4 | 10.9 |
| Miscellaneous | 1.7 | 5.3 | 22.5 | 18.2 | -0.0 | -14.8 | -0.5 |
| Framing Lumber ($ per 1000 board ft.) | 5.6 | -20.3 | 71.9 | 49.3 | 22.6 | -23.1 | 20.0 |
| Natural Rubber (cents per pound) | 7.2 | 31.8 | 63.4 | 56.3 | 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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