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Economy in Brief

Metals Prices Strong, Meats Down
by Tom Moeller February 23, 2004

Surging prices for industrial metals have pulled the JoC-ECRI index of industrial prices up 10.8% since yearend.

The metals sub index has risen 11.7%. That reflects further strength in steel scrap prices, up nearly one-third this year, and strength in copper prices. Aluminum prices also have firmed, up 7.2% this year (20.7% y/y).

During the last twenty years there has been a 42% correlation between the y/y change in metals prices as measured by the Journal of Commerce/ECRI index and the change in factory sector industrial production.

Meat prices have given back all the gains realized last fall as demand has fallen. This year, steer prices have meandered sideways at levels down one-third from the October '03 highs. In contrast, hog prices have firmed by one quarter since the beginning of this year.

Gold prices at $405.25 have been volatile this year in a tight $400-425 range (+15% y/y).
Commodity Prices 2/20/04 12/31/03 Y/Y 2003 2002 2001
Gold: Handy & Harman Base Price ($/oz.) $405.25 $416.70 15.0% $363.13 $310.05 $271.06
Stainless Steel Scrap ($/gross ton) $1,617.00 $1,265.00 88.9% $953.75 $717.10 $650.52
Copper: High Grade (COMEX, $/Lb.) $1.31 $1.04 45.7% $0.81 $0.72 $0.73
Steers: Cash Price: Texas-Oklahoma Avg. ($/cwt) $76.75 $75.70 -1.6% $83.01 $66.54 $71.86
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