Three Year History of Industrial Input Commodities

As we think about possible economic recovery, it may be a good idea to watch the prices of certain materials inputs to industry. Perhaps they will perk up before other parts of the economy farther downstream from raw materials.

Here are weekly, 3-year charts for several basic inputs to industry used to make things and move materials and things around.

The charts present the continuous futures contract price, and also show a 20-period price channel (marking trailing 20-period highest high and lowest low).

(click images to enlarge)

Copper

Aluminum

Platinum

Lumber

Natural Gas

West Texas Intermediate Crude Oil

Heating Oil

Gasoline

Here also are some shorter-term futures related prices for other industrial metals based on Barclay’s iPathETN products (the green horizontal histograms are “volume at price”):

Nickel

Lead

Tin

Not everyone will find this data either interesting or useful, but it helps us get somewhat of a panoramic view of materials demand broken out more specifically than broad commodities indices.

Maybe the industrial materials will give early warning of possible stock market improvements.

Of course, until the stocks of various types actually move up in a decided way, we will keep our allocations on the sidelines. Because we have a market of stocks, industries and sectors — not a monolithic stock market — we will likely enter the market at different times for different parts.

Platinum (point & figure chart)

Platinum seems to be working on either a short-term double/triple top or a near-term breakout, probably related to speculation about the prospective auto industry bailout. Catalytic converters use platinum, which makes the metal sensitive to auto manufacturing volumes.

Comments

[ROLEX18:]

You forgot to mention that most hedge funds graphs who traded this commodities look the same, be careful what you wish for.

Feb 09 07:22 AM

[auto44:]

There is some talk that China is buying/hoarding some resources while prices are down as well as having some place to put their money other than US bonds. The slightly upward movent in the baltic dry shipping index is being pointed to by some as being caused by China's buying and shipping. China, I understand is also buying large segments of mining stocks in the commodity producing countries while their prices are low. Who can blame them it seems to make more sense than their purchases of hedge funds and american bank shares. Maybe we as investors should follow their lead.

Feb 09 11:32 AM

[QVM Group:]

Auto44:

Yes, they are definitely working to build coal reserves and may well be doing similar things in private and public entities for other materials. It would seem to be a rational economic act to buy raw materials now at low prices, instead of Treasuries at low yields, if the cost of carry is perceived as less than the opportunity cost (or risk of capital loss in overbought Treasuries)

Feb 09 01:49 PM

[thesnowjob:]

What the paper markets have lost will benefit creditor nations who can take advantage and hoard here.

thanks for the charts.

Feb 09 09:45 PM