MPI rebounds with 1.7% increase driven by lumber boost
May 28, 2015 - Weekly Pricing Pulse
This past week the IHS Markit Materials Price Index (MPI) increased by 1.7%, continuing on modest gains since mid-April. Despite this upward bump, the index continues to hover near post-2009 lows. The exchange-traded components of the MPI, however, are experiencing a more considerable recovery, having seen prices collectively rise 14% over the past six weeks.
The standout performer last week was lumber, which climbed 4.4%. This strength comes amid the backdrop of a rebound in US homebuilding, which jumped 20% in April after a particularly harsh winter held down construction in the first quarter. In contrast to lumber, nonferrous metal prices fell 3.5% on worries about Chinese growth and dollar strength.
Indeed, the strength of the dollar was aided by the European Central Bank suggesting it will accelerate bond buying prior to the July summer break while US Federal Reserve chair Janet Yellen talked up the US recovery and suggested a 2015 rate increase is still possible. Otherwise, global economic risks appear to be increasing as the United Kingdom edges toward a 2016 EU referendum while concerns of a Greek default are adding to fears of a euro membership referendum there.
Global Pricing Summary - Week of 28 May 2015
Key Prices & Demand Drivers