The HWWI commodity price index is a multi-level product. The overall index is composed of three sub-indices (energy raw materials, industrial raw materials, food and beverages). These in turn are subdivided into several sub-indices (see chart). In this way, the index shows a highly differentiated picture of developments in specific commodity markets.
A total of 31 internationally traded commodities are represented in the index. The selection was made with the aim of including only unprocessed or minimally processed goods. However, existing trading practices also needed to be considered. For example, non-ferrous metals are not traded as ore (primary processing stage) but as metals (more advanced processing stage) on the commodity exchanges and correspondingly representative price quotations are published. Waste materials or secondary raw materials are not considered – except for steel scrap, which is used in the production as a raw material.
Regarding the weighting of price data, the index takes a macroeconomic perspective: prices of individual commodities are weighted with the shares of the commodity in the commodity imports of OECD countries. In addition, an alternative version is calculated (“Euroland” index), in which the raw material imports of the Eurozone countries from third countries serve as a weighting basis. Furthermore, the index is calculated on both a US dollar and euro basis.