R/€ = 15.05 Change: 0.08
R/$ = 12.27 Change: 0.07
Au 1339.78 $/oz Change: 101.94
Pt 1001.00 $/oz Change: 123.50
 
 
R/€ = 15.05 Change: 0.08
R/$ = 12.27 Change: 0.07
Au 1339.78 $/oz Change: 101.94
Pt 1001.00 $/oz Change: 123.50
 
 
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Strong commodity price rally lifts IHS Materials Price Index for ninth consecutive week

12th January 2018 BY: Henry Lazenby
Creamer Media Deputy Editor: North America

VANCOUVER (miningweekly.com) – The IHS Materials Price Index (MPI) is in its ninth consecutive week of gains, jumping 2.8% last week – the strongest weekly performance since early September.

According to IHS Markit economist Cole Hassay, the MPI was supported by broad-based positive indicators, with eight of ten subcomponents rising. Ferrous metals and oil prices were among the biggest movers, increasing 4.8% and 2.4%, respectively.

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“Oil prices continued to rise last week as political unrest in Iran worried the market. A strong draw on US inventories, caused in part by near-record level crude runs, also put upward pressure on prices. In ferrous metals, weather in Australia disrupted shipping, while steel production in China fell; both factors contributed to stronger finished steel and steel making raw material prices,” Hassay said in a weekly index update.

Further, the December US employment report and December's Purchasing Managers Index (PMI) reports for manufacturing dominated last week's data releases and reinforced the already buoyant mood in markets. Hassay noted that US employment growth came in under expectations, though the overall report still showed the US labour market heading into 2018 on a solid footing.

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The December PMI reports highlighted a strong continuing expansion in global manufacturing activity, with the headline index hitting an 82-month high.

“Despite the evident strength in commodity markets, we feel a combination of slower growth in China, tighter financial markets and lower oil prices will cap any continuing strength in prices.

“The test for this view will come late in the first quarter, when Chinese buyers return from the prolonged holiday season and when some of the supply bottlenecks currently effecting markets are resolved. If commodity prices are still showing strength, this would be a worrisome sign that accelerating inflation downstream in supply chains lies ahead,” Hassay predicted. 

EDITED BY: Creamer Media Reporter
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