Commodity markets continue to move lower as oil and chemicals drop
March 23, 2017 - Weekly Pricing Pulse
The IHS Materials Price Index (MPI) fell once more last week, dropping 0.7%. The MPI has now fallen in three of the past four weeks. Last week the decline was driven by oil and chemicals, with each subindex down 5.0% and 2.6%, respectively.
Oil markets have suffered in recent weeks, following record oil inventories in the United States, along with news last week that US shale producers' rig count increased for a 10th consecutive month. In chemical markets, weak natural gas and oil feedstock prices are feeding through to lower aromatics prices, with both benzene and paraxylene prices plummeting last week.
Developments last week were highlighted by the US Federal Reserve's interest rate increase, which came through as expected, and industrial production data, which was uniformly positive. In the Eurozone, January industrial production gained a strong 0.9% month on month, with a 2.8% bounce for capital goods fully offsetting December's decline. In the United States, industrial production was flat combination of a strong US dollar and higher interest rates creating at least a temporary correction in commodity markets, a reset that appears to have begun.
IHS Materials Price Index
Industrial Materials: Prices
Key Prices & Demand Drivers