Global| Jul 19 2013FIBER: Industrial Commodity Prices Weaken This Year
by:Tom Moeller
|in:Economy in Brief
Summary
Economic analysts suggest that GDP growth softened last quarter following its 1.8% rise during Q1'13. Recent movement in commodity prices support that conclusion. Yesterday's industrial commodity price index, from the Foundation for [...]
Economic analysts suggest that GDP growth
softened last quarter following its 1.8% rise during Q1'13. Recent
movement in commodity prices support that conclusion. Yesterday's
industrial commodity price index, from the Foundation for International
Business and Economic Research (FIBER), was 163.2 and 8.2% lower than in
mid-February.
Prices in the miscellaneous group have led the decline. Prices for both structural panels and framing lumber have declined by roughly one-quarter since April. Natural rubber prices have moved down as well. Prices in the metals group have been only somewhat less weak. Aluminum prices are 17.0% below the December high and are off 6.0% during the last twelve months. Copper prices have fallen a like amount since February and are down 10.0% y/y. With a 12.0% decline since April, steel scrap prices (-6.4% y/y) have been weak as well.
In the textile group, prices also have been soft. Burlap prices are down 14.0% since March and by 7.0% y/y. Cotton prices have been more stable, showing little-change since April but a one-quarter improvement y/y. Also to the upside have been crude oil & benzene prices. Crude oil prices have risen one-quarter since their November low but are still below the high of $113.93 per barrel in May 2011. Working the other way, prices for the petrochemical benzene are off 20.0% since February (-3.2% y/y).
The current industrial output forecast from the National Association for Business Economics calls for 3.1% growth this year but then a pickup to 3.5% in 2014. These growth rates suggest some future firming of industrial commodity prices. During the last ten years there has been a 42% correlation between the three-month change in prices and the change in factory sector industrial production.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.
| FIBER Industrial Materials Price Index (1990=100) | 07/18/13 | Y/Y % | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|
| All Items | 163.2 | 1.1 | 166.4 | 173.0 | 157.9 |
| Textiles | 77.8 | 2.2 | 77.9 | 86.1 | 81.3 |
| Cotton (cents per pound) | 79.8 | 20.7 | 74.5 | 132.8 | 87.8 |
| Metals | 222.2 | -2.1 | 243.0 | 278.7 | 240.0 |
| Aluminum ($ per metric ton) | 1,772.0 | -5.1 | 2,019.6 | 2,400.9 | 2,172.1 |
| Copper Scrap (cents per pound) | 314.0 | -8.8 | 360.6 | 400.3 | 326.8 |
| Steel Scrap ($ per ton) | 324.3 | -6.7 | 366.7 | 412.6 | 326.5 |
| Crude Oil & Benzene | 211.8 | 5.9 | 204.1 | 199.3 | 182.0 |
| Crude Oil (WTI, $ per Barrel) | 106.4 | 18.3 | 94.2 | 95.0 | 79.4 |
| Miscellaneous | 205.0 | 0.7 | 205.3 | 190.6 | 179.1 |
| Framing Lumber ($ per 1000 board ft.) | 335 | 5.0 | 321 | 273 | 283 |
| Natural Rubber (cents per pound) | 176.0 | -13.1 | 211.9 | 262.3 | 182.9 |
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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