BLOG — Apr 23, 2025
Weekly Pricing Pulse: Commodity Prices Flat Following Prior Week’s Turbulence
Markets focused on developments in trade policy last week, with the US extending exemptions from reciprocal tariffs to a broader range of electronics, including smartphones and computers, and subsequently launching a Section 232 "national security" review on the electronics and pharmaceutical sectors.
Meanwhile, mainland China tightened export controls on seven rare-earth elements and added several US companies to an export control list. These escalating trade tensions continued to weigh on the financial markets over the holiday-shortened week.
S&P Global Market Intelligence believes that tariffs primarily pose upside risks to US prices, as industrial materials prices outside the US will face limited downward pressure due to restricted access to US markets, with traded goods increasingly redirected elsewhere.
Most components of the Material Price Index (MPI) by S&P Global Market Intelligence are global benchmarks and not US prices so are not significantly impacted by US import tariffs.
The MPI remained unchanged last week after a 5.3% decline in the prior week. Seven out of ten subcomponents increased. The MPI is approximately 9.7% lower than the same week a year ago, indicating a general easing in commodity prices over the past 12 months.
Semiconductor prices, represented by the DRAM price sub-index, showed the highest increase last week, rising by 1.4%. This increase was primarily driven by improved market sentiment after the US administration announced a 90-day suspension on proposed reciprocal tariffs on domestic imports. This prompted buyers to stockpile their DRAM inventory levels to mitigate supply risks and potential price spikes.
Conversely, lumber prices weakened, with the sub-index declining by 1.2%. In the United States, prices fell to a weekly average of $574.6 per thousand board feet. This decline is largely attributed to the release of new home sales data, indicating an 11.4% decrease in total housing starts in March. These factors suggest that the construction market in the US remains weak, decreasing demand for lumber and further driving down prices.
—By Yan Hoong
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.
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