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Economy in Brief

FIBER: Industrial Commodity Prices Continue Their Broad-Based Decline
by Tom Moeller  September 12, 2022

• Lower metals prices lead the drop.

• Oil prices continue to weaken.

Despite improvement in factory sector production during July, weakness in the Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) has persisted through early this month. The price index fell 5.0% during the last four weeks and stood 5.6% below its level last year.

Price declines in the Metals group led the weakness during the last four weeks with an 8.5% decline, and they're off 17.6% y/y. Zinc prices fell 10.8% in four weeks, but they have risen 5.7% y/y. Zinc is used in the manufacture of batteries. Aluminum prices weakened 8.4% in four weeks and fell 18.4% y/y. Steel scrap prices declined 6.6% in four weeks (-17.6% y/y) and copper scrap weakened 2.5% (-17.0% y/y). Tin prices fell 11.7% in four weeks, down by more than one-third this past year. Lead prices declined 12.3% in four weeks and have weakened 19.5% y/y.

Prices in the Crude Oil & Benzene group fell 8.0% during the last four weeks but have risen 6.6% y/y. The cost of West Texas crude oil fell 6.7% in four weeks to $85.01 per barrel, but remained roughly one-quarter higher y/y. Prices for the petro-chemical benzene declined 25.6% in four weeks and declined 7.9% y/y. The FIBER price index excluding crude oil fell 4.9% during the last four weeks and was 7.1% lower y/y.

In the Miscellaneous group, prices weakened 4.2% (-6.6% y/y) during the last four weeks, led by a 12.5% decline in framing lumber prices. They have fallen 20.9% during the last year. Natural rubber prices weakened 11.7% in four weeks and were down 6.5% y/y. Hide prices held steady over four weeks, but fell by roughly one-quarter y/y.

Textile group prices slipped 0.3% in the last four weeks, but remained 2.7% higher y/y. Cotton prices eased 0.7% in four weeks but rose 18.9% y/y. The cost of burlap, used for sacks, bags and gardening, fell 1.4% in the last four weeks and slipped 0.7% y/y.

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.

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