Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Our Materials Price Index (MPI) fell 1.6% last week. The MPI has
now declined in seven of the past 13 weeks and consecutively over
the past four weeks. Prices dropped for eight out of ten
subcomponents, pointing to a widespread weakening in commodities
once again. Nevertheless, commodity prices are still 94% above last
year's levels and up 18% since the beginning of 2021.
The largest declines last week were in freight rates and lumber
prices. Freight rates recorded the second week of price declines on
the back of worsening relations between Australia and China
affecting iron ore shipments. China's desire to stabilize bulk
goods prices also provided a cooling effect on iron ore prices, and
subsequently shipments. For lumber, this was also a second
consecutive weekly price decline, although not the largest. Despite
a brief pause at the end of May, prices have been following a
downward trajectory since the second week of May. In the span of a
month and a half, prices rose 89%, reaching their peak at the
beginning of May. In light of record-breaking prices, buyers
increasingly began to stand on the sidelines, allowing a slight
improvement in availability. Despite recent declines, prices for
lumber have room to fall - they are still 240% above last year's
levels and 24% above their previous all-time peak set just last
September.
This past week provided more evidence that the year-long rally
in commodity markets may finally be ebbing. However, despite the
giveback, past commodity price increases continue to put pressure
on producers. China's producer price index for May rose 9% year on
year driven by increases in oil, non-ferrous, and iron ore prices,
prompting action by the national government to rein in prices. In
the United States, even the top-line consumer price index is
showing a sharp acceleration in inflation rising 5.0% year over
year in May (although the pace has eased on a month to month
basis). Some of the fastest rising components were for vehicles and
transportation. Similar to commodities, we do not think these
increases will be sustained as markets adjust, a pattern we are
beginning to now see upstream in supply chains for raw
materials.
Posted 16 June 2021 by Deni Koenhemsi, Principal Economist – Pricing and Purchasing
Join our webinar as our subject matter experts walk through key trends affecting each stage of the supply chain and… https://t.co/mFpMs3XP5G
May 06
{"items" : [
{"name":"share","enabled":true,"desc":"<strong>Share</strong>","mobdesc":"Share","options":[ {"name":"facebook","url":"https://www.facebook.com/sharer.php?u=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fweekly-pricing-pulse-the-beginning-of-the-end.html","enabled":true},{"name":"twitter","url":"https://twitter.com/intent/tweet?url=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fweekly-pricing-pulse-the-beginning-of-the-end.html&text=Weekly+Pricing+Pulse%3a+The+Beginning+of+the+end+%7c+IHS+Markit+","enabled":true},{"name":"linkedin","url":"https://www.linkedin.com/sharing/share-offsite/?url=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fweekly-pricing-pulse-the-beginning-of-the-end.html","enabled":true},{"name":"email","url":"?subject=Weekly Pricing Pulse: The Beginning of the end | IHS Markit &body=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fweekly-pricing-pulse-the-beginning-of-the-end.html","enabled":true},{"name":"whatsapp","url":"https://api.whatsapp.com/send?text=Weekly+Pricing+Pulse%3a+The+Beginning+of+the+end+%7c+IHS+Markit+ http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fweekly-pricing-pulse-the-beginning-of-the-end.html","enabled":true}]}, {"name":"rtt","enabled":true,"mobdesc":"Top"}
]}