The industrial prices increased 4.78% in March 2021 over February, the second highest rise since January 2014. The cumulative index in the year hit 14.09%. It was the highest one for March in the time series. The cumulative indicator in 12 months (33.52%) was also a record. In March, 23 out of 24 activities rose their prices for the third month in a row.

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 information by major economic category, i.e., capital goods, intermediate goods and consumer goods (durable and semi and non-durable).

In March 2021, the industrial prices increased 4.78% over February, the second highest rise in the time series of this indicator, started in January 2014. The four biggest changes were the activities of oil refining and ethanol products (16.77%), other chemicals (8.79%), wood (7.73%) and pulp and paper (7.18%).

The biggest influences were: oil refining and ethanol products (1.53 p.p.), other chemicals (0.74 p.p.), food products (0.58 p.p.) and basic metals (0.41 p.p.).

The cumulative index in the year hit 14.09% against 8.88% in February 2021. It was the highest index for March in the entire time series of the survey. Among the activities with the the highest changes were: mining and quarrying industries (49.57%), oil refining and ethanol products (37.82%), other chemicals (24.89%) and basic metals (21.47%). The most influential sectors were: oil refining and ethanol products (3.19 p.p.), mining and quarrying industries (2.73 p.p.), other chemicals (1.99 p.p.) and basic metals (1.40 p.p.).

The cumulative index in 12 months was 33.52%, another record in the time series. The four biggest changes were in mining and quarrying industries (136.25%), oil refining and ethanol products (52.78%), basic metals (45.76%) and other chemicals (44.92%). The most influential sectors were: food products (7.58 p.p.), mining and quarrying industries (5.55 p.p.), oil refining and ethanol products (4.70 p.p.) and other chemicals (3.63 p.p.).

The price change of 4.78% over February affected the major economic categories in the following way: 2.95% in capital goods; 5.70% in intermediate goods; and 3.63% in consumer goods, being 0.45% the change reported in durable consumer goods and 4.27%, in semi and non-durable consumer goods.

The influence of the economic categories on the IPP (4.78%) was: 0.21 p.p. of capital goods, 3.30 p.p. of intermediate goods and 1.27 p.p. of consumer goods. In the case of consumer goods, 0.03 p.p. was due to price changes observed in durable consumer goods and 1.25 p.p., in semi and non-durable consumer goods.

In the cumulative rate in the year (14.09%), the change was 7.32% in capital goods (influence of 0.53 p.p.), 19.78% in intermediate goods (11.02 p.p.) and 6.86% in consumer goods (2.54 p.p.). In this last case, the result was influenced by durable consumer goods (0.26 p.p.) and by semi and non-durable consumer goods (2.28 p.p.).

In the March 2021/March 2020 comparison, the change in the industrial prices hit 33.52%, with the following changes: capital goods, 18.60% (1.43 p.p.); intermediate goods, 44.75% (24.14 p.p.); and consumer goods, 20.71% (7.94 p.p.), being the influence of durable consumer goods of 0.96 p.p. and that of semi and non-durable consumer goods of 6.98 p.p. The major highlights are described below:

Mining and quarrying industries: in March, the prices in this sector changed, on average, 4.38%, the third consecutive positive change, though the lowest one of the three (12.03% in January and 27.91% in February). With the March result, the change in the quarter reached 49.57%, the highest one ever registered for March and the second highest in the time series (50.31% in October 2020), which accrued a ten-month change. In turn, the comparison between March 2021 and March 2020 was the highest one ever recorded: 136.25%.

This sector stood out due to the fact that, in the cumulative index, it was the most intense change and the second biggest influence (2.73 p.p. in 14.09%) and, in the change over the last 12 months (M/M_-12), it was once again the major change and the second influence (5.55 p.p. in 33.52%).

Food products: in March, the prices in this sector accelerated 2.41% in the comparison with the previous month (1.22% in February and 1.49% in January). It was the highest figure since November (2.59%). With the March result, the cumulative index changed from 2.73% in February to 5.21%. In the comparison between March 2021 and March 2020, the change was of 31.49%.

This sector, which is the sector that mostly contributes to the aggregate result of the industry (23.69%), stood out as it was the third biggest influence in the March against February comparison (0.58 p.p. in 4.78%) and the biggest one in the M/M_-12 comparison (7.58 p.p. in 33.52%).

Only one product, "crude degummed soybean oil", was among the highlights both in terms of change and influence. Among the biggest changes, all of them positive, were another soybean derivative and two products from slaughtering and manufacture of meat products. Among the most influential ones, among the four listed above, whose aggregate influence was 0.94 p.p. in 2.41%, two soybean derivatives ("residue of soybean oil extraction was the only one with a negative change), one sugarcane derivative and "fresh or cooled beef" (which replaced "frozen beef", a highlight in terms of change) appeared.

The advance in the prices in March was in line with the real devaluation (4.2% in the March-February comparison and 9.7% accrued in the first quarter of 2021). The negative change posted by "residue of soybean oil extraction" was explained by a market contingency, a supply relatively bigger than the demand. The off-season period of sugarcane helps to explain the movement of the prices of "VHP sugar (very high polarization)" like the pressure of cold stores on the slaughter of cattle helps to understand the movement of prices of beef in a dynamic foreign market.

Oil refining and ethanol products: the change of 16.77% registered in March against February was the sixth consecutive positive change. (The last negative change was in September 2020: -2.83% over August.) Even so, the changes in February (12.12%) and March were the most intense. The average change between October and January was 3.70%, against the average of 14.44% between February and March. The cumulative index changed from 18.03% in February to 37.82%, the peak in the time series either looking only at March results or looking at all the months. The change reported in the month against same month last year comparison, which hit 52.78% and replaced the previous record of 42.41% of July 2018, was also a peak in the time series.

This sector, which was the second biggest contribution to the aggregate result for the mining and manufacturing industries (10.18%), was spread along all the indicators: in the monthly indicator, it was the highest change and the biggest influence (1.53 p.p. in 4.78%); in the cumulative index in the year, it was the second highest change and the biggest influence (3.19 p.p. in 14.09%); and in the cumulative index in 12 months, it was the second highest change and the third biggest influence (4.70 p.p. in 33.52%).

In terms of products, the same ones that were among the highest changes also appeared among the biggest influences (15.82 p.p. in 16.77%). Three of them are derived from petroleum oil and one of them, "ethyl alcohol (anhydrous or hydrated)", is a biofuel. It should be mentioned that these four products have the highest weight in the calculation of the result of the sector (in the aggregate, they added up to 84.81%).

Other chemicals: in March, the industrial prices registered an average change of 8.79%, the ninth consecutive increase and the second highest positive change in the entire time series of this activity. This sector accrued a positive change of 44.92% over the last 12 months and of 24.89% in the first quarter of the year – both of them were the highest values in their time series.

The results reported in the latest months were mostly linked with the international prices and with the price increase of a number of raw materials, either imported or not, like, for example, naphtha, mostly due to the devaluation of the real against the dollar, which hit 4.2% in the month, 9.7% in the year and 15.6% in the last 12 months.

Concerning the economic groups of this activity, the highlights were the changes occurred in "manufacture of resins and elastomers", with 13.85% in the month, accruing 36.88% in the first three months of the year and 92.14% in 12 months; and in "manufacture of inorganic chemicals", with a change of 10.35% in the month, reaching 29.65% in the year and 43.64% in the cumulative index in 12 months. In regard to "manufacture of agrochemical products and disinfectants (for agriculture and other use)", the result was 2.09% in the month, accruing 5.44% in the year and 15.03% in the 12-month period.

Concerning the four products that mostly influenced the month´s result (4.62 p.p. in 8.79%), all of them increased their prices: "NPK-based manure and fertilizers", "polypropylene (PP)", "linear polyethylene, with density below 0.94" and " unsaturated propene (propylene)". The first product belongs to the group of inorganic chemicals and the next two belong to the group of resins and elastomers. The other 35 products of this activity accounted for 4.17 p.p. of the final change of 8.79% of this sector.

Basic metals: the price comparison between March and February showed a change of 5.92%, the ninth consecutive positive change in this activity. With this result, the sector of basic metals accrued a change of 45.76% in the last 12 months and of 21.47% in the first quarter of the year. The monthly change was the third highest in the entire time series, losing only to the changes in January and February this year.

Therefore, the cumulative changes in the year and in 12 months were the highest ones in the entire IPP survey, started in January 2010. Another highlight was that the prices in this sector recorded a cumulative change of 60.47% between December 2018 – base of the current time series – and March 2021, only losing to the change in the prices of the mining and quarrying industries (147.63%).

The results of the latest months were linked with the combination of the results of the steel groups (linked with steel products) and the group of non-ferrous materials (copper, gold and aluminum), whose prices behave differently. The former, linked with the steel sector, is affected by the prices of iron ore and by the valuation of the dollar against the real. Concerning the second group – non-ferrous materials –, their prices used to be linked with the quotations in the international stock markets.

Among the economic groups of this activity, the steel group changed 8.24%, accruing 27.25% in the year and 56.87% in 12 months, the three of them standing above the averages of this activity. The influence of the four major products was of 3.60 p.p. in the month and that of the other 20 products surveyed, 2.32 p.p.

The four products that mostly influenced the results of the month and year, all of them with positive changes, were: "carbon steel ingots, blocks, rods or plates", "uncoated hot-rolled steel carbon coils" and "aluminum plates and strips, more than 0.2 mm thick" in the month and in the quarter, as well as "copper and copper alloys bars, profiles and rebars", standing out in the month, and "aluminum oxide (calcined alumina)", standing out in the year.