FIBER: Industrial Commodity Prices Continue to Decline
by:Tom Moeller
|in:Economy in Brief
Summary
- Metals & lumber prices move sharply lower.
- Prices elsewhere are mixed.
Despite the recent improvement in U.S. factory output, many industrial commodity prices have weakened. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.2% last week. It was the fourth consecutive weekly decline and pulled prices 7.1% below the peak in the second week of March.
Prices in the metals group have been under extreme pressure, tumbling 17.0% during the last four weeks. This decline was led by a 23.9% four-week decline in steel scrap prices. The price of zinc, which is used in batteries, fell 19.6% during the last four weeks while aluminum prices were down 13.9% in the last four weeks. Copper scrap prices fell 10.0% in the last four weeks, while tin and lead prices also fell sharply.
Prices in the miscellaneous group also have been under pressure and fell 1.0% last week (-10.0% y/y), led by a 5.6% decline in framing lumber prices. They have fallen by roughly one-half during the last year. Natural rubber prices eased 0.1% last week and have weakened 6.5% during the last four weeks.
Offsetting these weekly declines was a 4.3% increase in prices in the crude oil & benzene group, which have risen by one-quarter during the last year. Crude oil costs alone rose 6.4% last week and were up by roughly three-quarters y/y. The per barrel price of crude oil of $111.75 compared to the $115.64 per barrel high in the second week of March. The price of the petro-chemical benzene rose 10.2% last week and stood 10.8% higher y/y. Excluding crude oil, industrial commodity prices eased 0.5% last week and have fallen 7.3% during the last ten weeks.
Textile group prices recently have trended sideways, near thirty-year highs. Cotton prices increased 2.6% last week and rose 81.4% y/y. The cost of burlap, used for sacks, bags and gardening, eased 0.2% last week and remained near its record high.
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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