Inflation in Industry
International market makes basic metals drive up prices
March 29, 2018 09h00 AM | Last Updated: June 05, 2018 10h41 AM
Leveraged by the international market, Basic Metals was the activity that mostly contributed to the 0.41% increase in the Producer Price Index (PPI) in February, compared to January, as released by the IBGE this Thursday. In relation to the same month of 2017, the change was 5.23%, while the cumulative index in the year was 0.89%.
Basic metals had and impact of 0.20 percentage points (p.p.) on the general result, being only closely followed by the manufacture of food products, with 0.18 pp. The rise in the metal sector was motivated by the international economy.
"Basic metals has a significant weight in the survey and had a reasonable increase, the highest in a February (2.51%). It was basically driven by the whole group of steel, coil, ingots and aluminum, which is influenced by the international market, "explains IBGE analyst Manuel Campos Souza Neto.
"China has greatly increased its prices in relation to steel, closing factories that produce low-grade steel, in order to meet international standards as well. In addition, copper has also had increases," explains the researcher.
In February, most of the activities had price rises. Of the 24 sectors analyzed, only three did not close the month with increases (Petroleum products and biofuels, Beverages and Machinery and equipment).
On the other hand, the group of Petroleum products and biofuels benefited from the drop in the international market. Prices fell 3.15% in February compared to January, the second biggest drop since 2010, when the IPP series began. Prior to this, only in March 2017 had a greater decrease happened (-3.25%).
"It was a widespread drop in diesel fuel, gasoline and LPG (liquefied petroleum gas). These were the products that fell the most," explains Manuel. "They are commodities, they had a big drop in the international market and this was passed on to producer prices," he concludes.
The Producer Price Index (PPI) of Mining and Quarrying and Manufacturing Industries measures the evolution of prices of products "at the factory gate", without accounting for taxes and freights.
