Global| May 19 2014FIBER: Industrial Commodity Prices Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
Industrial commodity prices recently exhibited moderate upward movement. Friday's industrial commodity price index, from the Foundation for International Business and Economic Research (FIBER), was 167.1, up 2.0% since early-February [...]
Industrial commodity prices recently exhibited moderate upward
movement. Friday's industrial commodity price index, from the Foundation
for International Business and Economic Research (FIBER), was 167.1, up
2.0% since early-February and at the high end of the range since mid-2013.
The gain accompanied 2.9% growth in factory sector output during the last
twelve months.
Continued strength in industrial commodity prices is in the offing. The current industrial output projection from the National Association for Business Economics calls for 3.2% growth during all of this year then a pickup to 3.4% growth in 2015. During the last ten years there has been a 52% correlation between the three-month change in prices and the change in factory sector output.
A 5.8% rise in prices in the miscellaneous category has provided the strength to the overall FIBER index since early February. Leading the price rise was a 53% gain in tallow prices following three years of weakness. Prices for random lengths of structural composite recovered to the highest level since October. These gains were offset by declines in prices of framing lumber and rubber. Textile prices also improved 1.0% during the last few months. Burlap prices have been strong, up 3.6% in the last three months and 12.8% since the early-September low. Cotton prices bounced 2.3% higher following little movement since early-2012.
To the downside recently have been prices in the crude oil & benzene grouping, though they have strengthened considerably since mid-2011. Prices for the petro-chemical benzene fell 16.5% since early-February, but are moderately higher year-to-year. A 4.3% rise in crude oil prices since February offset some of the recent weakness, but prices have been moving sideways, in a broad range, since early-2011. In the metals group, prices also have been moving sideways of late. They are down, however, by roughly one-quarter since the 2011 high. A 5.4% rise in steel scrap prices since early-February was a modest bounce after a one-third price decline since early-2011. Aluminum and copper scrap prices recently firmed but have declined 4-5% during the last year.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.
| FIBER Industrial Materials Price Index (1990=100) | 05/16/14 | Y/Y % | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|
| All Items | 167.1 | -1.6 | 169.0 | 166.4 | 173.0 |
| Textiles | 78.9 | -0.4 | 78.18 | 77.9 | 86.1 |
| Cotton (cents per pound) | 84.0 | 3.3 | 79.6 | 74.5 | 132.8 |
| Metals | 237.7 | 4.1 | 236.3 | 243.0 | 278.7 |
| Aluminum ($ per metric ton) | 1,740.9 | -4.4 | 1,846.3 | 2,019.6 | 2,400.9 |
| Copper Scrap (cents per pound) | 313.0 | -4.5 | 332.4 | 360.6 | 400.3 |
| Steel Scrap ($ per ton) | 371.8 | 6.4 | 346.0 | 366.7 | 412.6 |
| Crude Oil & Benzene | 212.0 | 3.3 | 207.7 | 204.1 | 199.3 |
| Crude Oil (WTI, $ per Barrel) | 101.5 | 7.3 | 97.9 | 94.2 | 95.0 |
| Miscellaneous | 205.5 | -9.4 | 218.3 | 205.3 | 190.6 |
| Framing Lumber ($ per 1000 board ft.) | 336 | -1.8 | 383 | 321 | 273 |
| Natural Rubber (cents per pound) | 143.5 | -25.5 | 189.9 | 211.9 | 262.3 |
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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