Global| May 06 2019FIBER: Industrial Commodity Prices Weaken
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) fell 1.3% during the last four weeks and was 11.6% below the prior year's level. Declines y/y were notable for metals [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) fell 1.3% during the last four weeks and was 11.6% below the prior year's level. Declines y/y were notable for metals and lumber.
Metals prices declined 3.7% over the last month led by the same 3.7% m/m fall in the cost of aluminum. Steel scrap prices were off 3.1% during the last four weeks. Zinc prices fell 3.0% last month and they remained 6.5% lower y/y. Copper scrap prices also weakened 1.6% m/m. Prices in the miscellaneous group fell 1.6% m/m led by a 2.8% weakening in framing lumber prices. Structural panel prices fell 3.5% m/m and were down roughly one-third versus last year. Working the other way, the cost of natural rubber rose 1.4% last month and 5.8% y/y. A 2.0% m/m gain in the crude oil & benzene category was led by a 1.9% rise in crude oil prices to $63.05 per barrel, up from the $45.02 low at the end of last year. Despite the increase, crude prices remained down versus the $75.05 early-October peak. Prices for the petro-chemical benzene increased 6.8% during the last month, but they remained one-quarter below the year-ago level. Prices in the textile group slipped 0.8% m/m and were down modestly y/y. Cotton prices also fell 0.8% m/m while burlap prices eased 0.9% m/m (-4.1% y/y).
Recent declines in industrial commodity prices accompanied a fall in factory sector output during each of the last three months. Improvement may be forthcoming as the consensus forecast from the National Association for Business Economics (NABE) calls for a 2.8% rise in industrial output during all of 2019 and a 1.7% gain next year. During the last ten years, there has been a 52% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector output.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| All Items | -1.3 | 2.1 | -1.5 | -11.6 | -12.0 | 6.7 | 19.2 |
| Textiles | -0.8 | 0.4 | -0.4 | -2.3 | -2.8 | 3.0 | 2.8 |
| Cotton (cents per pound) | -0.8 | 2.0 | -3.9 | -11.2 | -9.2 | 9.8 | 10.2 |
| Metals | -3.7 | 0.6 | -0.3 | -11.9 | -12.2 | 18.6 | 32.9 |
| Aluminum ($ per metric ton) | -3.7 | -3.2 | -7.8 | -20.4 | -12.7 | 26.0 | 13.0 |
| Copper Scrap (cents per pound) | -1.6 | 5.6 | 3.7 | -6.4 | -16.1 | 29.3 | 17.3 |
| Steel Scrap ($ per ton) | -3.1 | 6.4 | -8.2 | -12.9 | 2.3 | 16.8 | 74.5 |
| Crude Oil & Benzene | 2.0 | 9.2 | -6.3 | -7.9 | -20.0 | 8.1 | 20.4 |
| Crude Oil (WTI, $ per Barrel) | 1.9 | 17.9 | -4.4 | -7.4 | -24.4 | 10.9 | 44.3 |
| Miscellaneous | -1.6 | 1.6 | -1.2 | -19.9 | -14.8 | -0.5 | 21.7 |
| Framing Lumber ($ per 1000 board ft.) | -2.8 | 4.2 | 1.2 | -30.8 | -23.1 | 20.0 | 12.9 |
| Natural Rubber (cents per pound) | 1.4 | 7.6 | 19.8 | 5.8 | -4.1 | -29.6 | 89.4 |
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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