As a cooling economy has eased some of the pressure, the IHS Markit Materials Price Index (MPI) has seen a modest decline over the fourth quarter, with a -9.5% month-over-month change.

Energy prices again pushed the overall MPI higher, posting an almost 10% increase just one week after a 14% jump in October. Natural gas was again the main story as spot prices of liquefied natural gas (LNG) were driven to $10MMBtu by strong demand in Europe, amid a potential energy crisis, and a heat wave in Asia. On the opposite end of the spectrum, lumber prices slid nearly 5% in November as housing starts and permits in the US continue to retreat. The freight rate subcomponent also moved significantly lower last week as demand for iron ore imports into mainland China has cooled. The freight index is a four-week moving average of rates of ships carrying ores from Australia and Brazil to mainland China. The subcomponent has declined in 11 of the past 12 weeks. Additionally, concrete products are almost 35% more expensive than they were last year. Plastic products have seen price increases of around 20% – partly due to sanctions restricting access to petrochemicals and partly due to hurricanes forcing factories to close for parts of the summer. Copper and aluminum products have seen declines of 7% and 3% respectively, as shipping costs have made it easier for them to make it from mines to factories to their destinations.