Commodity Prices Up
More than half of the buyers in Purchasing's
monthly survey (57%) report that commodity prices rose in February,
pushing the monthly commodity price index up to 75.9 this month, the
highest point for that index in more than two years. Metals and
plastics are on the rise most, with 50% of buyers polled saying steel prices are on the rise in February.
Cement Prices Stay Low
Limited
growth is forecast for such construction materials as cement in 2010
with prices expected to stay under downward pressure. Not all equity
analysts agree with producer Lafarge's hopes of a slow 5% recovery;
instead, they see cement demand as flat. And that, says UBS Securities
"puts a question mark over prices."
Chip Prices Rising
More buyers are reporting that semiconductor prices will rise over the next 90 days, according to Purchasing's
latest monthly survey of buyers. Thirty-four percent of respondents
said prices would rise over the next three months. In January, 25% said
they would rise. Fewer respondents in February believed prices would
stabilize: fifty-eight percent versus 68% in the previous month.
LTL Rates Continue Down
According
to the Census Bureau's PPI LTL Price Index, rates decreased 5.3% year
over year in January, and 1.1% sequentially from December. "While FedEx
Freight continues to be cited as being the most aggressive with
pricing, YRC has reportedly been trying to entice shippers with
promotional deals," says Longbow Research.
Copper Prices are Rising
Copper
prices have more than tripled in the past year and look to increase
further in 2010 as consumption in the two largest consuming nations,
China and the U.S., is rebounding from the recession. "Copper is being
resilient," says Lannie Cohen, president of Capitol Commodity Services.
"Globally, copper demand is looking better."
Producer Prices Up
The
bureau of Labor Statistics says the seasonally adjusted producer price
index rose 1.4% in January, driven by an 11.5% increase in energy
prices. The 1.4% increase followed a 0.4% advance in December and a
1.5% rise in November. But, the core PPI index, which measures only
finished goods not including food and energy prices, rose just 0.3%.
Airlines Rethink Hedges
US
airways won't be hedging any fuel this year and United is going to be
very careful, after many airlines got burned in 2008. United's CFO told
the Reuters Travel and Leisure Summit it has hedged nearly half of its
fuel consumption for the year, but has also put measures in place
should prices fall to help avoid the sting the company felt when oil
prices fell in 2008.
Buyers See Higher Chip Prices
More
electronics buyers report that semiconductor prices are increasing this
month and will continue to rise over the next three months, according
to Purchasing's monthly survey. Twenty-eight percent of buyers surveyed said that prices were increasing in February, up from 22% in January.
Ammonia Hits Near-High
Ammonia prices continued up in February to $343/net ton, their second-highest point in more than a year. According to Purchasindata.com, the only other point it was higher was in October when it hit $355. ICISPricing.com reports that a benchmark contract could push prices up another $100.
Sugar Prices Up
Goldman
sachs group raised its 2010 sugar price forecasts, saying tight
fundamentals are expected to support high and volatile prices. Its
12-month sugar price forecast went to to 20¢/lb, from its Jan. 13
forecast of 17¢/lb. It also revised up its three-month forecast to
27¢/lb from the previous 20¢/lb.
Oil Price Forecasts Cut
Societe
general forecasts West Texas Intermediate oil to average $85.91/barrel
this year, downgraded from an earlier forecast of $88.75, analysts at
the Paris-based bank said in a February report. Brent crude will
average $85.08, a downward revision from an earlier estimate of $88,
the bank said.
Rail Rates will Rise
Stifel,
Nicolaus and Co. analysts forecast that rail rates may tick up 3–5%
this year based on the comments and outlook from several railroad
executives. "Our outlook for rail pricing continues to exceed that of
other modes of North American land transportation in the near-term,"
Stifel said in a note.
Source: http://www.purchasing.com/article/451873-Commodity_Pricing_News.php