The MPI soars to an 18-month high
December 16, 2016 - Weekly Pricing Pulse
Oil and ferrous gains push MPI higher for sixth consecutive week.
The IHS Materials Price Index (MPI) surged to an 18-month high this past week, gaining 4.3%. Once more it was oil and ferrous metals that propelled the index higher, gaining 7.5% and 6.8%, respectively.
Oil continued higher last week as news emerged that OPEC's production agreement is complemented by a commitment by non-OPEC producers to also enact production cuts. Ferrous markets have been gaining strongly for several weeks, as iron ore and metallurgical coal rallied. Last week steel scrap prices reacted, following ore and coal, boosted by growing substitution from virgin steel production.
There were numerous positive macroeconomic announcements last week to aid the strong supply-side news. The Eurozone composite purchasing managers' index rose further in November, up to 53.9, an 11-month high, as new business expanded and backlogs continued to grow. In China the November producer price index showed further upward price pressure, with gains of 1.5% on the prior month, significantly adding to manufacturing input costs. This said, prices look exposed to a correction. Dollar strength with US interest rates rising would seem to make commodity markets ripe for year-end profit-taking.
Global Sourcing Survey
We invite you to participate in our fifth annual Global Sourcing Survey.
Supply chains are fragile and susceptible. As a procurement professional, you know it is vital for global executives to have visibility into their supply chains and to proactively measure and react to risk. In this annual survey we aim to take the pulse of the global supply chain in the following areas:
- Identify how prepared businesses are for a disruption
- Determine how companies’ sourcing strategies will change in 2017
- Identify companies’ strategies for outsourcing to China or other locations
The survey will take approximately 15 minutes to complete. Please be assured that your individual responses will remain confidential and that results will only be published in aggregate form. All survey participants will be notified of the resulting benchmark report when it is published.
Please contact Paul Robinson with any questions
Thank you. We appreciate your contribution.
Follow this link to the Survey:
Take the survey
Industrial Materials: Prices
Key Prices & Demand Drivers