Global| May 08 2017FIBER: Industrial Commodity Prices Slip
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.6% during the last four weeks, but remained up 12.7% during the last twelve months. This follows strength during [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.6% during the last four weeks, but remained up 12.7% during the last twelve months. This follows strength during all of last year when prices rose 19.2%. Recent price weakness has occurred as factory sector production fell 0.4% during March after a 0.3% February rise.
Prices in the metals sector declined 3.7% during the last four weeks, but still have risen 20.9% y/y. Steel scrap prices led the weakness last month with a 9.9% decline, but they're up 18.3% y/y. Copper scrap prices also fell 2.3% last month, but have risen 14.7% y/y. Aluminum prices declined 1.5% during the last four weeks, but have risen 20.9% over the last year. Crude oil & benzene costs declined 2.0% during the last four weeks. WTI crude oil prices fell 6.3% over that period. Prices for the petro-chemical benzene rose, however, by 2.2% during the last month. In the miscellaneous group prices rose 2.4% during the last month and by 13.3% y/y. Framing lumber prices strengthened 8.2% in recent weeks, and 24.3% y/y. Prices for structural panels similarly increased 5.7% in the last month and 19.0% y/y. Natural rubber costs declined 5.7% m/m, but rose 19.4% y/y. In the textile group prices have been steady recently. Cotton prices moved 4.4% higher during the last month and increased one-quarter y/y. Burlap prices, however, declined 6.0% during the last four weeks, but rose 19.7% 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 industrial production 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 | -0.6 | -0.6 | 9.6 | 12.7 | 19.2 | -16.3 | -10.0 |
| Textiles | 0.0 | 0.8 | 3.3 | 5.5 | 2.8 | 2.2 | -4.2 |
| Cotton (cents per pound) | 4.4 | 3.4 | 11.1 | 24.4 | 10.2 | 2.6 | -24.2 |
| Metals | -3.7 | -2.9 | 14.1 | 20.9 | 32.9 | -27.8 | -8.7 |
| Aluminum ($ per metric ton) | -1.5 | 5.7 | 11.7 | 17.2 | 13.0 | -19.2 | 9.4 |
| Copper Scrap (cents per pound) | -2.3 | -3.6 | 17.0 | 14.7 | 17.3 | -27.0 | -12.0 |
| Steel Scrap ($ per ton) | -9.9 | 7.5 | 46.5 | 18.3 | 74.5 | -53.8 | -18.6 |
| Crude Oil & Benzene | -2.0 | -7.9 | 4.8 | 8.9 | 20.4 | -19.4 | -26.5 |
| Crude Oil (WTI, $ per Barrel) | -6.3 | -10.1 | 3.0 | 7.5 | 44.3 | -35.8 | -43.2 |
| Miscellaneous | 2.4 | 3.8 | 13.3 | 13.3 | 21.7 | -18.0 | -6.7 |
| Framing Lumber ($ per 1000 board ft.) | 8.2 | 22.5 | 24.3 | 24.3 | 12.9 | -16.4 | -1.6 |
| Natural Rubber (cents per pound) | -5.7 | -26.1 | 24.6 | 19.4 | 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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