Producer Prices

Industrial prices begin 2021 rising 3.36% in January

Section: Economic Statistics | Caio Bellandi

March 02, 2021 09h00 AM | Last Updated: March 02, 2021 12h28 PM

Mining sector registered the highest rise and influence on the industrial prices in January - Photo: Licia Rubinstein/IBGE News Agency

Industrial prices rose 3.36% in January 2021 over December 2020. The rate is quite higher than that recorded between November and December (0.39%), and it represents the second highest rise in the time series started in January 2014, only after October 2020 (3.41%). As a result, the cumulative index over the last 12 months hit 22.96%.

The data are from the Producer Price Index - IPP, released today (2) by the IBGE, which measures the change in the prices of products at the "factory gate", without tax or freight, of 24 activities of the mining and manufacturing industries.

 

In January, all of the 24 activities rose their prices, against 17 in December. The sector of mining and quarrying industries stood out, as it posted the highest rise (10.70%) and it was also the biggest influence on the overall figure (0.59 percentage points). "It is a very volatile segment, which rose once again after two drops, due to the devaluation of the real against the dollar and to the behavior of crude petroleum oil and of the international market of iron ore," explains Manuel Souza Neto, manager of the survey. The sector rose 52.91% in the cumulative index over the last 12 months, the highest rise among all the 24 activities.

Basic metals was another activity with a high rise in the survey, the second highest (6.10%) in the month and the third in influence (0.40 percentage points). The increase of prices in January was the highest one in the entire IPP series, whose survey started in January 2010 with the manufacturing industry. The cumulative index over the last 12 months was 38.42%, also the highest one in the time series.

"These results are linked with the combination of steel groups (steel products) and the group of non-ferrous material (copper, gold and aluminum), which have different price behaviors," stresses the manager. The former is affected by the prices of iron ore and steel surplus in the world. Despite this surplus, the valuation of 29.1% of the dollar against the real over the last 12 months and of 4.1% in January, coupled with the increase in the prices of iron ore, led to an increase in the prices of the national steel. Concerning the second group – non-ferrous materials –, their prices used to be linked with the quotations in the international stock markets.

Second in influence (0.45 p.p.) and the third highest rise, the activity of oil refining and ethanol products (5.30%) has its result linked with products derived from crude petroleum oil, like gasoline and diesel fuel. Among the four products that mostly influenced the month´s result, biodiesel was the only one whose prices decreased: "It is due to the lower demand or, more important to the product, to the lower acquisition in bids promoted by the National Petroleum Agency," explains Souza Neto.