The industrial prices changed 1.58% in July 2024 over June, the sixth consecutive positive result in this indicator. In this comparison, 21 out of 24 industrial activities registered positive price changes. The cumulative index in the year was 4.18%, whereas the cumulative indicator in 12 months stayed at 6.63%. The IPP had been -0.76% in July 2023.

The Producer Price Index (IPP) of the Mining and Manufacturing Industries measures the evolution of the prices of products "at the factory gate", free from taxes and freight, and encompasses the broad economic categories.

In July 2024, industrial prices changed 1.58% over June this year. Twenty-one out of 24 industrial activities investigated in the survey registered positive price changes over the immediately previous month. On the other hand, 18 activities had recorded higher average prices in June against the previous month, when the change of the same indicator had also been positive for the overall industry.

The four activities with the highest changes, in absolute terms, in this indicator (M/M-1) were: basic metals (4.47%); pulp and paper (3.79%), mining and quarrying industries (3.48%); and petroleum refining and biofuels (2.83%).

Compared with June, the sector of petroleum refining and biofuels was the biggest highlight in the composition of the aggregate result. That activity was responsible for 0.29 percentage points (p.p.) of influence on the change of 1.58% of the overall industry. Still in this issue, other activities that also stood out were basic metals (0.28 p.p. of influence, food products (0.21 p.p.) and mining and quarrying industries (0.17 p.p.).

The cumulative index in the year, which compares prices of the reference month with those from December in the previous year, hit a change of 4.18%. In 2023, the cumulative rate up to /July had been -7.17%. The value of the cumulative rate in the year until this reference month was the fifth highest ever registered for July since the beginning of the time series in 2014.

Among the activities that recorded the highest changes in the cumulative index in the year in July 2024 were: basic metals (15.53%); pulp and paper (15.09%); tobacco (9.68%); and wood (9.52%). In the composition of the aggregate result of industry, from the perspective of this same indicator (cumulative in the year), the main influences were recorded in basic metals (0.91 p.p.), other chemicals (0.66 p.p.), food products (0.51 p.p.) and pulp and paper (0.46 p.p.).

The cumulative index in 12 months reached 6.63% in July. In the previous month, the rate had reached 4.17%. The sectors accounting for the four biggest changes in prices in July against the same month a year ago were: pulp and paper (16.15%); petroleum refining and biofuels (14.41%); mining and quarrying industries (12.44%); and bother transportation means (11.81%). On the other hand, the sector with the biggest influence on the aggregate result in this same comparison were: petroleum refining and biofuels (1.38 p.p.); food products (1.35 p.p.); other chemicals (0.85 p.p.); and basic metals (0.60 p.p.).

Among the broad economic categories, the price changes in July over June 2024 were the following: 1.28% in capital goods (BK), 1.93% in intermediate goods (BI), and 1.12% in consumer goods (BC), being the change reported in durable consumer goods (BCD) of 0.20% and that in semi and non-durable consumer goods (BCND) of 1.30%.

Still in this indicator, the major influence was exerted by intermediate goods, whose weight in the composition of the overall index was 55.50% and accounted for 1.07 p.p. of the change of 1.58% of the mining and manufacturing industries. Consumer goods, responsible for 0.41 p.p. and capital goods, for 0.10 p.p., complete the list. In the case of consumer goods, the influence is split into 0.01 p.p., due to change in prices of durable consumer goods, and 0.40 p.p., related to price changes in semi-and non-durable consumer goods.

The cumulative index in the year hit 3.73% in the case of capital goods; 3.74% in intermediate goods; and 4.94% in consumer goods, being that durable consumer goods accumulated a change of 1.57%, whereas semi-durable and non-durable goods, 5.64%.

In terms of influence on the cumulative result in the year, capital goods accounted for 0.29 p.p. of the rate of 4.18% registered by the overall industry up to July this year. Intermediate goods, in turn, accounted for 2.08 p.p., whereas consumer goods exerted an influence of 1.81 p.p. on the aggregate result of industry, an influence that splits into 0.10 p.p. due to price changes of durable consumer goods and 1.71 p.p. caused by changes of semi and non-durable consumer goods.

In the cumulative indicator in 12 months, the price change of capital goods was of 3.87% in July 2024. The prices of intermediate goods, in turn, changed 7.33% in the period of one year and the change in consumer goods was of 6.18%, in which durable consumer goods changed 2.25% and semi and non-durable consumer goods, 7.00%.

Concerning the influences on the aggregate result, intermediate goods, with a weight of 55.50% in the overall index, accounted for 4.04 p.p. in 6.63% of cumulative change in 12 months in industry, in the reference month. In the result of July 2024, consumer goods also influenced 2.29 p.p. and capital goods, 0.31 p.p.

In particular, the result of consumer goods was influenced by 0.14 p.p. by durable consumer goods and by 2.14 p.p. by semi and non-durable consumer goods, the latter with a weight of 83.53% in the index of that broad category.

Mining and quarrying industries: the average price change of this sector was positive for the second consecutive month, now at 3.48% against 1.61% in June. As a result, the cumulative index in the year stayed at 1.55% and, in 12 months, at 12.44%, below that reported in June (14.17%).

 The highlight given to this sector was due to the fact, in terms of change, that it was the third most intense, both in the perspective of M/M_-1 and in the cumulative rate in 12 months. In terms of influence, it was the fourth one between June and July, accounting for 0.17 p.p. in 1.58%. It should be mentioned that the changes were positive in all the cases.

Food products: the prices in this sector changed, on average, 0.86% between June and July, the fourth positive change in a row. As a result, the cumulative index in the year changed from 1.18% in June to 2.05% in July. The annualized rate reached 5.51%, the highest one since /January 2023 (5.75%). In terms of index-number, the current one (177.56) was 6.04% below the peak of July 2022 (188.97), though it was the highest one since April 2023 (178.41).

This sector stood out due to its influence: it was the third one in the perspective of M/M_-1 (0.21 p.p. in 1.58%) and in the cumulative index in the year (0.51 p.p. in 4.18%) and the second one in the cumulative rate in 12 months (1.35 p.p. in 6.63%).

Despite the positive result of the change, two out of four products that mostly influenced the result registered a negative net impact: "sterilized/UHT/long-life milk" and "cooled or fresh beef." In general, the price of beef has increased, stimulated by the depreciation of the real against the dollar (2.8% between June and July, 13.2% in the cumulative rate in the year and 15.4% in the cumulative rate in 12 months) and the resulting increase in the exports, though not in the specific segment of "cooled or fresh beef", a movement that was widespread along companies. A colder demand, in turn, partly explained the retreat in the price of "sterilized/UHT/long-life milk."

In the specific case of orange juice, whose prices positively pressed the result, taking the product to stand out both in terms of change and influence, the domestic production was at relatively low levels, even at harvest time. Besides orange juice, that of other fruits also stood out, though only in terms of change. As an example, the production of apples has been under the demand, due to an adverse weather. The rise in "VHP (very high polarization) sugar" was mostly due to the depreciation of the real against the dollar. In any event, the net influence of the four products that mostly stood out on the monthly result was 0.20 p.p. in 0.86%.

Pulp and paper: this activity recorded the second highest result in relation to the other activities, both in the change against the previous month (3.79%) and in the cumulative index in the year (15.09%). It also reported the most significant result in the perspective of the cumulative rate in 12 months (16.15%).

The products with the highest changes between June and July were "notebooks", kraft paper for packaging, uncoated" and "chemical pulp, soda/sulphate, except dissolution pulp", with positive results and "sanitary pads of any matter", with a negative result. However, the group of the most influential products was slightly different, with all the positive impacts, which added up to 3.84 p.p. out of 3.79%. Due to the importance of "chemical pulp, soda, sulphate, except dissolution pulp" in terms of weight, the depreciation of the real against the dollar (2.8% between June and July) and the rise in the foreign price of this commodity are factors that justify the scenario observed.

Petroleum refining and biofuels: as happening since February this year, the price change in this sector was positive between the previous month and the current one (2.83%), the highest result since September 2023 (8.25%). As a result, the cumulative index in the year changed to the positive side (0.68%). Lastly, the cumulative rate in 12 months (14.41%) surpassed that of June (8.01%).

This sector stood out in terms of change, the fourth most intense (and positive) between June and July, and the second one (also positive) in the cumulative rate in 12 months. Accounting for 0.29 p.p. out of 1.58%, it was the major influence on the monthly change, as well as in the last 12 months, when it accounted for 1.38 p.p. out of 6.63%.

All of them registering positive changes, the four most influential products accounted for 2.65 p.p. out of 2.83%. "Gasoline, except for aviation" appears among them, the second highest weight in in the sectoral calculation.

Other chemicals: prices of the chemical industry advanced 1.98% in July over June, recording the fifth positive result in the first seven months of 2024, taking the cumulative index in the year to 8.59%. Compared with the same month a year ago, the prices of this sector were 10.98% higher.

As happened in June, the July´s result remained explained, to a great extent, by the higher prices in the fertilizers market, reflecting the seasonal window of higher domestic demand for these products. However, this movement was not widespread across the productive chains. Macronutrients like MAP and "superphosphates" were sold at cheaper prices this month, whereas derivative fertilizers, with an important influence on the sectoral result, maintained the high bias of the previous month.

The chemical industry has the third highest weight in the calculation of the IPP, 8.02% in July. Even not showing the most significant sectoral changes, this activity exerted the second most intense influence on the cumulative index in the year of the overall index (0.66 p.p.) and the third on the cumulative rate in 12 months (0.85 p.p.).

Basic metals: prices of this activity changed 4.47% in July in relation to the previous month, being the most intense rise since April 2022 (6.23%) and hitting the eighth consecutive positive result in this indicator. As a result, this activity accumulated a rise of 15.53% in the first seven months of 2024. In the cumulative indicator in 12 months, this activity reached the second month on the positive side, after 22 consecutive negative results between August 2022 and May 2024, with the prices, on average, 9.57% higher in July 2024 than in July 2023.

Among the 24 activities surveyed, this sector stood out in all the types of comparison, being the most intense change and the second biggest influence (0.28 p.p. out of 1.58%) in July over June, the highest change and the biggest influence (0.91 p.p. out of 4.18%) in the cumulative index in the year, and the fourth biggest influence (0.60 p.p. out of 6.63%) in the cumulative rate in 12 months.

The group of non-ferrous metals influenced both the month´s result and those of the longer-term indicators. Their changes are usually linked with quotation in international markets and they have been mainly impacted by change in the quotation of aluminum and gold. The importance of the currency exchange should be reminded to explain the result of this sector: in July, the dollar appreciated 2.8% against the real and it already accumulates a rise of 13.2% in 2024 and of 15.4% in the last 12 months.