Weekly Pricing Pulse: Commodity Markets Move Sideways After Quiet Week on Markets

• The Material Price Index (MPI) by S&P Global Market Intelligence was flat last week, recording a technical decline of 0.1%. This continues the relatively muted movements over the past month.
• Four subcomponents declined, five increased, and one was flat.
• Lumber prices were the most significant downward mover last week, as the subindex fell 5.3%. 
• Data releases next week include construction spending and light vehicle sales for the US, which may provide a clearer view of the future path of demand for commodities.

The firing of Federal Reserve Board Governor Lisa Cook dominated market focus last week. This latest action against the Fed has once again brought the question of the central bank’s independence to the fore. For now, market reaction has been muted with the S&P 500 stock price index down 0.1% last week. 

With little tariff related news last week, traders across all asset classes adopted a wait and see policy. Data releases next week include construction spending and light vehicle sales for the US, which may provide a clearer view of the future path of demand for commodities.  The employment situation report for August will also be released and bear on our view of the near-term health of the US economy.

The Material Price Index (MPI) by S&P Global Market Intelligence was flat last week, recording a technical decline of 0.1%. This continues the relatively muted movements over the past month. Four subcomponents declined, five increased, and one was flat. The MPI is approximately 6.9% lower than it was the same week a year ago, indicating a general easing in commodity prices over the past twelve months.

Lumber prices were the most significant downward mover last week, as the subindex fell 5.3%. In the US, prices fell to a weekly average of $568 per thousand board feet, down from a peak of $688 per thousand board feet in July. This decline is attributed to excess supply and weak demand. US lumber markets are currently oversupplied as buyers have stockpiled inventory to hedge any tariff increases. At the same time, demand remains weak and official statistics released last week showed that new home sales edged down 4,000 (0.6%) to 652,000 (annual rate) in July. 

Conversely, industrial metal prices rallied last week, with the sub-index increasing by 1.2%. Tin prices were notably strong, climbing above $35,000/tonne for the first time since April. Global tin supply remains tight following an export ban enacted by Myanmar in August 2023. Despite the lifting of this ban earlier this year, data released last week showed that mainland China’s tin imports were down 15% in July from a year earlier. This tightness pushed tin prices on the London Metal Exchange (LME) higher.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.