FIBER: Industrial Commodity Price Strength Continues
by:Tom Moeller
|in:Economy in Brief
Summary
- Crude oil prices surge.
- Steel scrap leads metals price increase.
- Falling lumber costs offset higher rubber prices.
The improvement in factory sector activity has given life to industrial commodity prices. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) strengthened 1.2% during the four weeks ended February 11 and increased 17.6% during the last year. The level of the price index stands at a record high for the series which dates back to January 1985.
Crude oil & benzene costs surged 5.1% in the last four weeks and 27.0% y/y. Crude oil costs alone gained 12.0% (55.9% y/y) as the cost of crude rose to $90.33 per barrel last week, up by more than one-half y/y. The price of the petro-chemical benzene improved 3.9% during the last four weeks and rose 45.6% y/y. Excluding crude oil, industrial commodity prices edged 0.5% higher in the last four weeks and gained 15.6% in the last year.
Prices in the metals group strengthened 3.4% in the last four weeks, up by one-third during the last year. Aluminum costs jumped 8.7% in the recent four weeks and by more than one-half during the last year. The cost of steel scrap rose 8.6% in four weeks and 22.1% y/y while zinc prices improved 2.3% in the last four weeks and 36.7% y/y. Copper scrap prices increased 1.5% in four weeks and increased by nearly one-quarter y/y.
Prices in the textile group rose 1.5% during the last four weeks and 9.3% y/y. Cotton prices strengthened 8.4% in four weeks and 50.9% y/y. The cost of burlap, used for sacks, bags and gardening, improved 1.9% in the last four weeks and rose by one-quarter y/y.
The miscellaneous price index, in contrast, declined by 2.9% during the last four weeks (+7.5% y/y). Framing lumber prices weakened 7.8% (+15.4% y/y). A 7.3% increase in natural rubber prices offset the decline, though they were still down 2.2% y/y.
Industrial commodity prices should remain strong. The National Association for Business Economics predicts a 4.0% rise in industrial output in 2022.
The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases.
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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