Global| Mar 20 2017FIBER: Industrial Commodity Prices Weaken Moderately This Month
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) declined 1.6% during the last four weeks, but has risen 18.7% during the last twelve months. This follows strength [...]
Prices in the metals sector eased 1.5% during the last four weeks, but still have risen 31.1% y/y. Copper scrap prices led the weakness last month with a 3.8% decline, but they're up 17.1% y/y. Countering the decline was a 6.5% rise in steel scrap prices which have risen by two-thirds over the last year. Aluminum prices were little-changed this past month, but strengthened by roughly one-quarter y/y. Zinc prices similarly eased 5.6% last month, but have risen by one-half y/y. Crude oil & benzene costs declined 5.9% during the last four weeks. WTI crude oil prices averaged $48.73 per barrel last month, nearly a four-month low (+27.3% y/y). Prices for the petro-chemical benzene similarly fell 13.1% during the last month, but have risen by one-third over the last year. In the miscellaneous group, framing lumber prices rose moderately in recent weeks, and 24.8% y/y. Prices for structural panels increased similarly in the last month and 15.8% y/y. Natural rubber costs were part of the recent price weakness, posting a 16.5% four-week decline, though up by roughly two-thirds y/y. In the textile group prices have been little-changed recently. Cotton prices moved 1.4% higher during the last month and increased one-third y/y. Burlap prices improved modestly during the last four weeks, and by 16.3% y/y.
The current industrial output projection from the National Association for Business Economics (NABE) calls for a 2.6% increase in production during all of 2017, following a 1.2% decline last year. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, factory sector production in the European Union and Japan is strengthening.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| All Items | -1.6 | 3.4 | 11.8 | 18.7 | 19.2 | -16.3 | -10.0 |
| Textiles | 0.4 | 1.9 | 5.2 | 6.2 | 2.8 | 2.2 | -4.2 |
| Cotton (cents per pound) | 1.4 | 5.6 | 11.7 | 31.8 | 10.2 | 2.6 | -24.2 |
| Metals | -1.5 | 3.9 | 19.9 | 31.1 | 32.9 | -27.8 | -8.7 |
| Aluminum ($ per metric ton) | 0.2 | 7.3 | 20.5 | 23.6 | 13.0 | -19.2 | 9.4 |
| Copper Scrap (cents per pound) | -3.8 | 0.9 | 24.8 | 17.1 | 17.3 | -27.0 | -12.0 |
| Steel Scrap ($ per ton) | 6.5 | 28.7 | 32.3 | 66.3 | 74.5 | -53.8 | -18.6 |
| Crude Oil & Benzene | -5.9 | -0.6 | 7.1 | 15.4 | 20.4 | -19.4 | -26.5 |
| Crude Oil (WTI, $ per Barrel) | -8.5 | -16.0 | 8.8 | 27.3 | 44.3 | -35.8 | -43.2 |
| Miscellaneous | -1.4 | 6.0 | 12.6 | 20.6 | 21.7 | -18.0 | -6.7 |
| Framing Lumber ($ per 1000 board ft.) | 2.8 | 12.0 | 14.5 | 24.8 | 12.9 | -16.4 | -1.6 |
| Natural Rubber (cents per pound) | -16.5 | 2.7 | 48.8 | 64.4 | 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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