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Producer Price Index (IPP) changes -0.12% in December and ends 2021 with a record high of 28.39%

February 01, 2022 09h00 AM | Last Updated: February 03, 2022 05h32 PM

In December 2021, industry prices changed -0.12% compared to November, accumulating a high of 28.39% in the year - a record in the time series for this indicator, which started in 2014. The cumulative index of 2021 was 9.01 percentage points (pp) higher than that of 2020. 

Period Rate (%)
December 2021 -0.12%
November 2021 1.46%
Cumulative in the year
December 2020 0.39%

In December, the prices of 17 of the 24 surveyed industrial activities showed positive changes compared to the previous month.

The Producer Price Index (IPP) for Mining and Quarrying and Manufacturing Industries measures the "facotry gate" prices of products, excluding taxes and freight, and covers the following major economic categories: capital goods, intermediate goods and consumer goods ( durable, semi-durable and non-durable).

Producer Price Indexes, according to Mining and Quarrying and Manufacturing Industries (General Industry) and Sections - Last three months
General Industry and Sections Changes (%)
M/M-1 Cumulative in the year M/M-12
OCT/21 NOV/21 DEC/21 OCT/21 NOV/21 DEC/21 OCT/21 NOV/21 DEC/21
General Industry
2.26 14.6 -0.12 26.69 28.55 28.39 28.95 29.05 28.39
B - Mining and Quarrying
-2.18 -5.21 -12.77 37.66 30.49 13.83 33.48 29.17 13.83
C - Manufacturing 2.55 1.89 0.63 26.06 28.43 29.24 28.67 29.05 29.24
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

In December 2021, the prices of mining and quarrying and manufacturing industries (IPP) - or general industry (IG), another way of referring to these activities as a whole - changed -0.12% when compared to November 2021. From October to November, industry registered a high of 1.46%.

In December 2021, 17 of the 24 industrial activities investigated in the survey showed a price increase compared to November, in opposition to the negative change in the general industry index. The four activities with the greatest changes, in absolute terms, were: the declines in mining and quarrying (-12.77%) and basic metals (-3.27%) and the increases in other chemical products (2.57%) and other transportation equipment (2.36%).

The mining and quarrying industries sector was the most prominent in the composition of the aggregate result, responsible for -0.71 percentage points (pp) of influence on the change in general industry (-0.12%). Other activities that also stood out were food (0.49 pp of influence), other chemical products (0.26 pp) and basic metals (-0.24 pp).

The cumulative index in the year reached 28.39% against 28.55% in November. As a result, the IPP closed 2021 with the highest value for a year since the beginning of the time series, in 2014. This value is 9.01 percentage points (pp) higher than that recorded in the cumulative rate of 2020 - a dynamics followed by six of the 24 industrial activities investigated by the survey.

Among the activities that closed the year with the greatest changes, the following stand out: petroleum refining and biofuels (69.72%), other chemical products (64.09%), basic metals (41.79%) and wood (40, 76%).

The main influences were petroleum refining and biofuels (with 5.88 pp), other chemical products (5.14 pp), food (4.77 pp) and basic metals (2.73 pp).

Among the Major Economic Categories, the price change from December to November was: 1.73% in capital goods (BK); -0.54% in intermediate goods (BI); and 0.24% in consumer goods (BC), and the change observed in durable consumer goods (BCD) was 0.76%, and in semi-durable and non-durable consumer goods (BCND) was 0.14 %.

The main influence among the Major Economic Categories was exerted by intermediate goods, whose weight in the composition of the general index was 58.63% and accounted for -0.32 pp of the -0.12% change in mining and quarrying and manufacturing industries. Capital goods had an influence of 0.12 pp and consumer goods of 0.08 pp. In the case of consumer goods, the influence is divided into 0.04 pp in durables, and 0.04 pp in semi-durables and non-durables.

The cumulative rate in the year of the Major Economic Categories: 21.08%, in capital goods (1.53 pp); 35.15% (19.58 pp) in intermediate goods; and 19.66% (7.28 pp) in consumer goods – with 15.95% (0.99 pp) in durable consumer goods, and 20.41% (6.29 pp) in semi-durable consumer goods and non-durable.

Producer Price Indexes - Mining and Quarrying and Manufacturing
Industries and Major Economic Categories - Last three months
General Industry and Sections Changes (%)
M/M-1 Cumulative in the year M/M-12
OCT/21 NOV/21 DEC/21 OCT/21 NOV/21 DEC/21 OCT/21 NOV/21 DEC/21
General Industry
2,26 1,46 -0,12 26,69 28,55 28,39 28,95 29,05 28,39
Capital Goods (BK) 1,85 1,18 1,73 17,63 19,02 21,08 16,43 17,70 21,08
Intermediate Goods (BI) 3,03 1,67 -0,54 33,65 35,89 35,15 36,32 36,58 35,15
Consumer Goods (BC) 1,04 1,16 0,24 18,01 19,37 19,66 20,39 20,00 19,66
Durable Consumer Goods (BCD) 1,36 0,67 0,76 14,32 15,08 15,95 16,28 16,04 15,95
Semi- and Non-Durable Consumer Goods (BCND) 0,98 1,25 0,14 18,75 20,23 20,41 21,22 20,79 20,41
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

The highlights are the following sectors:

Mining and quarrying industries: the change of -12.77% observed from November to December was the most intense among the 24 industry sectors. As a result, the annual rate was 13.83%, closing at a lower level than that observed throughout the year, whose January-November average was 83.17%.

The highlight of the sector, in addition to the most intense change already mentioned, was due to the fact that it was also the biggest influence (-0.71 pp, in -0.12%).

Food: for the sixth consecutive month, there was a rise in prices in the sector (2.09%), in comparison with the previous month. As a result, for the third consecutive year, the annual change closed above 10%: in 2019, 10.14%; in 2020, 30.40%; and now 18.57%.

The highlight given to food is due to the fact that it was the second biggest influence on the result of the general industry (0.49 pp, in -0.12%) and the third in the cumulative result (4.77 pp, in 28.39%). It is worth mentioning that the cumulative change in 2021 of the sector was the 13th among the 24 that make up the industry, in a year in which the greatest change was observed in “manufacture of coke, petroleum products and biofuels” (69.72%) and only four activities had a change below 10% (all positive).

Only two products, "fresh or cooled beef" and "soybean extraction residues", appear, in the monthly perspective, both in the list of products that are among the most intense changes regarding influence (the four highlighted ones account for 2.06 pp, in 2.09%).

The groups with changes above the sectoral rate, compared to November, were “manufacture of vegetable and animal oils and fats” (4.15%) and “manufacture and refining of sugar” (3.82%), not by chance, this group had three of the four most influential products.

In the annual perspective, the sector with the greatest change was “coffee roasting and grinding” (67.27%), which was strongly impacted by the harsh winter, with frost, followed by “sugar manufacturing and refining” (39.91%). The two were the only ones whose change was above the sectoral change.

In addition to the weather (which affected the production of sugarcane and coffee, for example), factors such as international demand (with an effect on sugar, soybean products and meats) and the exchange rate (depreciation of the real by 9.8%, in the year) also explain the price movement in 2021.

Petroleum refining and biofuels: after seven months, the price change in the sector, in the month-to-month comparison, was negative (-1.52%), being more intense than the previous one, in April (-0.55%), with a higher one only in September 2020 (-2.83%). However, in a year with ten positive rates, the closing result was 69.72%, the highest in the series and the highest among all 24 industry sectors.

The highlight given to refining is due to the fact that it was the biggest annual change observed in the general industry, in addition to being, at the end of the year, the biggest influence (5.88 pp, in 28.39%).

"Diesel fuel", the product with the greatest contribution in the calculation of the sector's result, was not highlighted either as a change or as an influence, in the month-on-month perspective. In terms of influence, three of the four products (whose influence was -1.66 pp, in -1.52%) had a negative change, among them "gasoline, except for aviation", the second most important product.

Other chemical products: the chemical industry, in the month of December, presented the greatest positive change in IPP prices, 2.57%, accumulating a change of 64.09% in the year. The results are linked to international prices and the change in prices of several raw materials, whether imported or not, such as naphtha, in addition to a heated demand.

Analyzing the main products responsible for the increase, there is a concentration in the group “manufacture of inorganic chemical products”, more specifically in manure/fertilizers, mainly because the significant increases in urea, lower production of fertilizers in the foreign market and appreciation of the dollar against the real in the last six months of the year with 12.3%. The price change in this group was 5.51% in the month, accumulating 124.39% in the year, the highest value of this index in the entire series.

The group “manufacture of resins and elastomers”, on the other hand, presented a change of -0.50%, breaking a series of three consecutive positive changes, and still accumulating a positive change of 42.76% in the year.

Finally, in the group “manufacture of pesticides and household disinfectants”, there was a rise of 1.26% in the month, thus accumulating 19.06% in the year.

With regard to the four products that most influenced the result (1.73 pp, out of 2.57%), there was an increase in prices in all three representatives of the group of inorganic chemical products (“MPK fertilizers”, "superphosphates" and "urea"). The fourth most influential product was “polypropylene (PP)”, which had a negative price change. The other 35 products surveyed in the activity had, on average, a positive result, with 0.84 pp of the final change of the activity.

The products that most influenced the results in 2021 were: “NPK-based fertilizers or fertilizers”, “mineral or chemical, phosphate fertilizers or manure”, “polypropylene (PP)” and “superphosphates”. All had positive changes.

The sector stood out, in the comparison with the 24 activities of the survey, for having the third largest price change in module in the month, and the second in the cumulative rate of the year. Furthermore, in terms of influence, it was the third largest in the month (0.26 pp in -0.12% of the general index) and the second position in the cumulative index of the year (5.14 pp in 28.39%).

Basic metals: the price drop in the activity was -3.27%, the second consecutive negative change in the year, after a series of 16 increases in the activity. With this result, the basic metals sector accumulated a high of 41.79% in the year. Another important piece of information is that, between December 2018 (base of the current sample) and December 2021, prices in the sector had a cumulative change of 87.31%, a similar increase to the average prices of mining and quarrying industries, 88.46%, an activity which includes iron ore, the main raw material for steel, and very close to the activity with the greatest change: petroleum refining and biofuels, with 92.94%.

The sector's results are linked to the combination of the results of the steel groups (linked to steel products) and the group of non-ferrous materials (copper, gold and aluminum), which have different price behaviors. The first, linked to the steel sector, is affected by iron ore prices and the change of the dollar against the real, in addition to the replenishment of inventories in the consumer chain. In relation to the second group – non-ferrous materials – the values ​​usually present their results linked to the quotations of international stock exchanges.

Considering the economic groups of the activity, the steel industry presented its third consecutive negative rate (-2.91%), the second most intense negative change of this group in the entire series surveyed by the IPP, only losing to the previous month, of -3.71%, largely due to the decrease in iron ore prices. The steel industry accumulated 47.38% in the year, therefore, above the 12-month average high of 41.79%.

Regarding the four products that most influenced the change in the month, they accounted for -2.85 pp, from -3.27%, with -0.42 pp corresponding to the other 20 products analyzed.

All four products that most influenced the results in the month had negative changes, both of which are derived from steel, influenced, as mentioned earlier, by the drop in iron ore prices in the market.

The products that stood out in terms of influence in the month were: “aluminum oxide (calcined alumina)”, “carbon steel ingots, blocks, billets or plates”, “carbon steel hot coils, uncoated” and “aluminum plates and strips, thicker than 0.2 mm”. These same products were also highlights in the cumulative result in 2021, but with increases in this indicator.

The basic metal sector stood out, in comparison with the 24 activities of the survey, for having the second largest change in module in the month and the third in the cumulative rate of the year. In terms of influence, it was the fourth both in terms of the month's results (-0.24 pp in -0.12%) and in the cumulative result for the year (2.73 pp, in 28.39%).