Lumber Prices, Metals Prices, Energy Prices, and Prices of Other Construction Materials are Forecast to Fall Further
The Reed Construction Data construction materials price index dropped 7.8% from September to December and now is expected to decline through the winter as worldwide commodity demand continues to shrink.
As reported by Purchasingdata.com, commodity prices slipped to a 28-month low in January. Reed Business Information’s chief economist, James Haughey, notes that prices for metals, lumber and some energy based commodities fell in January in most major countries because construction activity and manufacturing production continued to decline and commodity inventories are well above normal levels.
Looking at the construction materials price index, preliminary data put the January price decline at more than 20% for aluminum, 10% for steel and 10% for lumber, 7% for diesel and about 5% for copper--with no decline for cement. “Futures prices and inventory levels suggest that spot prices will continue to fall for several more months,” Haughey says, noting that lumber futures prices are 30% below spot prices. Also, crude oil storage facilities are full with some product now being stored on anchored tankers.
The intensity of the commodity price collapse parallels the suddenness and depth of the worldwide cutbacks in construction and manufacturing production, which actually are much larger outside the U.S. His report says industrial production in the U.S. dropped 2% in December from November while both Japan and Korea reported a 9.6% fall in industrial production in December from November. The exact drop in China is not clear, but other data suggest that it is in the same range as other Asian countries.
As reported by Purchasingdata.com, commodity prices slipped to a 28-month low in January. Reed Business Information’s chief economist, James Haughey, notes that prices for metals, lumber and some energy based commodities fell in January in most major countries because construction activity and manufacturing production continued to decline and commodity inventories are well above normal levels.
Looking at the construction materials price index, preliminary data put the January price decline at more than 20% for aluminum, 10% for steel and 10% for lumber, 7% for diesel and about 5% for copper--with no decline for cement. “Futures prices and inventory levels suggest that spot prices will continue to fall for several more months,” Haughey says, noting that lumber futures prices are 30% below spot prices. Also, crude oil storage facilities are full with some product now being stored on anchored tankers.
The intensity of the commodity price collapse parallels the suddenness and depth of the worldwide cutbacks in construction and manufacturing production, which actually are much larger outside the U.S. His report says industrial production in the U.S. dropped 2% in December from November while both Japan and Korea reported a 9.6% fall in industrial production in December from November. The exact drop in China is not clear, but other data suggest that it is in the same range as other Asian countries.
source: www.purchasing.com
