CHICAGO With the exception of steel mill products and iron and steel scrap, metals pricing fell again during July, according to the latest producer price index (PPI) report from the U.S. Bureau of Labor Statistics.
The PPI for steel mill products inched up 0.4 percent last month, not quite offsetting a 0.7-percent decline in June, while the iron and steel scrap index jumped 6.3 percent after falling 1.8 percent in the same comparison.
The aluminum mill shapes PPI declined 0.7 percent in July and the aluminum-based scrap index fell 4.6 percent from June, while the PPI for copper and brass mill shapes slipped 2.2 percent and the copper-based scrap index slid 4.7 percent in the same comparison.
The PPI (not seasonally adjusted) for all finished goods in July was basically flat with the previous month, reflecting flat realized prices on capital equipment such as oilfield machinery, railroad equipment, ships, truck trailers and civilian aircraft and slight declines in selling prices for passenger cars and light trucks.
"Intermediate goods prices moved sideways, while crude goods prices rose 1.2 percent," said Gregory Daco, senior principal economist at Lexington, Mass.-based IHS Global Insight Inc. "Core finished goods rose a tick but these gains were offset by lower energy prices, mostly stemming from a decrease in the price of residential natural gas and gasoline."
There is "little indication" that pricing pressure will push inflation higher, "apart from crude petroleum prices. Modest global growth means little inflation coming through import prices, while moderate domestic growth is keeping domestic costs in check," Daco said.
Looking ahead, "modest global energy demand and the ongoing energy boom in the U.S. and Canada should put downward pressure on oil prices in the coming quarters," he added.