Commodity Prices Up 8% In Q1

The big deflation in prices for metals, plastics, lumber and other commodities seen in 2009 is long gone. Purchasing magazine’s index tracking transaction prices for 109 industrial commodities rose 8% in the first quarter this year. And the magazine is forecasting an overall 17% rise for ’10, followed by another 6% increase next year.

While 304 stainless-sheet prices moved up 7.4% for the first quarter, many other materials experienced more robust increases. Aluminum sheet jumped 11% while copper sheet rose 11.6%. Nickel, an important component of higher grade stainless-steel products, saw prices increase 11.7%.

The carbon steels also witnessed some aggressive price increases. Cold-rolled sheet prices were up 14.7% and those for electro-galvanized sheet jumped 16.8%.

Building materials and energy prices also rose during the period. Prices for Douglas fir 2’x4’s jumped a whopping 34.1%, while ½” four-ply CDX fir plywood prices rose 14.1%. Natural gas also rose 14.1% from some of the lowest levels in years. Extrusion-grade LDPE, on the other hand, was only a penny more expensive than first quarter versus the fourth quarter ’09 at 59 cents a pound.

With the rising price for nickel, Purchasing forecasts stainless sheet will move 10.6% higher in the second quarter to nearly $3,000 a ton with the nickel surcharge. It expects stainless prices to then hold steady the rest of the year. Still, a forecast second-quarter price of $2,994 a ton would be 43.5% higher than the second quarter ’09.

The reasons for the run-ups are simple: increasing demand, especially from booming Asian economies.

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