Global| Oct 16 2017FIBER: Industrial Commodity Prices Move Higher
by:Tom Moeller
|in:Economy in Brief
Summary
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 1.7% during the last four weeks and gained 14.3% during the last twelve months. During all of last year, [...]
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 1.7% during the last four weeks and gained 14.3% during the last twelve months. During all of last year, prices rose 19.2%. The index level of 161.8 stood at the highest point since September 2014. Recent price improvement comes at a time when factory output increased 0.9% y/y following a 0.7% rise in 2016.
Prices in the metals sector increased 4.4% during the last four weeks and have risen nearly one-third y/y. Steel scrap prices rose 2.4% during the last month and by one-half y/y. Copper scrap prices increased 1.0% over the last four weeks and rose 39.7% during the last year. Aluminum prices gained 2.2% in one month and by 26.7% y/y. In the miscellaneous group, prices gained 1.6% during the last month and rose 16.0% y/y. Framing lumber prices jumped 7.3% in recent weeks, but were up nearly one-quarter y/y. Prices for structural panels firmed 1.5% in the last month and rose 42.9% y/y. Natural rubber costs declined 10.5% m/m and fell 2.0% y/y. Crude oil & benzene costs moved 1.2% higher in the last month (3.4% y/y). WTI crude oil prices strengthened 3.9% over the last four weeks to $50.40 per barrel, and were up versus the $43.61 low late in June. Prices for the petro-chemical benzene eased 1.5% during the last four weeks, but were up 19.4% y/y. In the textile group, prices eased 0.5% during the last month and rose 2.5% y/y. Cotton prices recently backpedaled 4.2% and have been fairly stable y/y. Burlap prices moved 1.3% higher over the last four weeks and worked 25.4% higher y/y.
Further price improvement may be coming. The current industrial output projection from the National Association for Business Economics (NABE) calls for a 1.9% increase in output during all of 2017 and a 2.3% rise in 2018. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in U.S. industrial output. In addition, factory sector production in the European Union and Japan is strengthening.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
| FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| All Items | 1.7 | 6.7 | 3.3 | 14.3 | 19.2 | -16.3 | -10.0 |
| Textiles | -0.5 | 0.8 | -1.2 | 2.5 | 2.8 | 2.2 | -4.2 |
| Cotton (cents per pound) | -4.2 | 2.3 | -7.4 | 0.3 | 10.2 | 2.6 | -24.2 |
| Metals | 4.4 | 11.8 | 11.9 | 31.2 | 32.9 | -27.8 | -8.7 |
| Aluminum ($ per metric ton) | 2.2 | 11.9 | 11.2 | 26.7 | 13.0 | -19.2 | 9.4 |
| Copper Scrap (cents per pound) | 1.0 | 14.5 | 16.8 | 39.7 | 17.3 | -27.0 | -12.0 |
| Steel Scrap ($ per ton) | 2.4 | 10.2 | 1.0 | 50.4 | 74.5 | -53.8 | -18.6 |
| Crude Oil & Benzene | 1.2 | 5.5 | -3.5 | 3.4 | 20.4 | -19.4 | -26.5 |
| Crude Oil (WTI, $ per Barrel) | 3.9 | 11.4 | -5.0 | -0.2 | 44.3 | -35.8 | -43.2 |
| Miscellaneous | 1.6 | 7.9 | 3.3 | 16.0 | 21.7 | -18.0 | -6.7 |
| Framing Lumber ($ per 1000 board ft.) | 7.3 | 10.3 | 6.3 | 22.9 | 12.9 | -16.4 | -1.6 |
| Natural Rubber (cents per pound) | -10.5 | 1.5 | -24.6 | -2.0 | 89.4 | -22.5 | -32.3 |
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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