Global| Apr 11 2022FIBER: Industrial Commodity Prices Weaken
by:Tom Moeller
|in:Economy in Brief
Summary
- Recent price declines are broad-based.
- The cost of crude oil falls sharply.
- Lumber prices collapse.
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) fell 2.2% during the four weeks ended April 8 but remained 17.2% higher over the last year.
Crude oil & benzene prices fell 6.7% in the last four weeks but remained up by roughly one-quarter y/y. Crude oil costs alone fell 13.6% in four weeks yet were up by two-thirds y/y. The cost of crude weakened to $99.92 per barrel. The price of the petro-chemical benzene fell 7.7% during the last four weeks but was 12.8% higher y/y. Excluding crude oil, industrial commodity prices declined 1.5% yet gained 14.7% in the last year.
Prices in the metals group fell 1.8% in the last four weeks, up 38.5% during the last year. Aluminum prices led the decline and were off 6.9% in four weeks. They, nevertheless, have risen by roughly one half y/y. Steel scrap prices fell 5.0% (+39.0% y/y) but zinc prices improved 6.9% in the last four weeks, up 55.0% y/y. Copper scrap prices edged 0.1% higher in the last four weeks and by 16.0% y/y.
In the miscellaneous group, prices declined by 4.1% during the last four weeks (+2.2% y/y). Framing lumber prices weakened by one-quarter in four weeks and by 17.1% y/y. Prices stood at the lowest level since early-December. This decline was countered by a 6.9% increase (11.6% y/y) in natural rubber prices.
Prices in the textile group also moved 2.4% higher (11.6% y/y) during the last four weeks, led by cotton prices which increased 15.4%, up roughly three-quarters y/y. The cost of burlap, used for sacks, bags and gardening, improved 0.9% in the last four weeks and rose by 18.8% y/y.
Industrial commodity prices should remain firm. The National Association for Business Economics expects a 4.1% rise in industrial output in 2022 and a 2.6% increase in 2023.
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.
