In January 2024, industry prices changed -0.31% compared to December 2023, the third negative result in a row. In this comparison, 8 of the 24 industrial activities had price reductions. The cumulative result in 12 months was -5.56%. In January 2023, the IPP had been 0.29%.

The Producer Price Index (IPP) for Mining and Quarrying and Manufacturing Industries measures the “ factory-gate” price of products, without taxes and freight, and covers the major economic categories.

In January 2024, industrial prices fell 0.31% compared to December 2023. Eight of the 24 industrial activities investigated in the survey showed negative price changes compared to the previous month. In contrast, 12 activities had lower average prices in December compared to the previous month.

The four biggest changes were in petroleum refining and biofuels (-4.77%); mining and quarrying industries (4.64%); perfumery, soaps and cleaning products (-2.03%); and printing (1.79%).

Petroleum refining and biofuels were the most prominent industrial sector in the aggregate result, compared to December. The activity was responsible for -0.51 percentage points (pp) of influence on the -0.31% change in the general industry. Still in this regard, other activities that also stood out were mining and quarrying industries, with 0.23 pp of influence, food (-0.18 pp) and basic metals (0.07 pp).

The cumulative result in 12 months was -5.56% in January. In the previous month, this same indicator had registered a rate of -4.99%. The sectors with the four biggest price changes in the comparison between January and the same month of the previous year were: petroleum refining and biofuels (-18.26%); other chemicals (-15.87%); paper and pulp (-12.88%); and basic metals (-8.85%).

The sectors with the greatest influence on the aggregate result were: petroleum refining and biofuels (-2.15 pp); other chemicals (-1.37 pp); food (-0.96 pp); and basic metals (-0.54 pp).

Among the major economic categories, the January result had the following impact: 0.55% change in capital goods (BK); -0.88% in intermediate goods (BI); and 0.37% in consumer goods (BC), with the change observed in durable consumer goods (BCD) being 0.08%, while in semi-durable and non-durable consumer goods (BCND), it was 0.43 %.

The main influence came from intermediate goods, whose weight in the composition of the general index was 55.41% and accounted for -0.49 pp of the -0.31% change in mining and quarrying and manufacturing industries.

The list is completed by consumer goods, with an influence of 0.14 pp, and capital goods with 0.04 pp. In the case of consumer goods, the influence observed in January is divided into 0.00 pp, which was due to the change in the prices of durable consumer goods, and 0.13 pp associated with the change in semi-durable and non-durable consumer goods.

In the 12-month period, the price change of capital goods was -0.87% in January/2024. The prices of intermediate goods, in turn, changed -8.84% in this one-year period and the change in consumer goods was -1.21%, with durable consumer goods showing a price change of 1.56%. % and semi-durable and non-durable consumer goods, of -1.76%.

With a weight of 7.78% in the calculation of the general index, capital goods were responsible for -0.06 pp of the -5.56% cumulative change in 12 months in the industry, in this reference month. In the January 2024 result, there was also an influence of -0.43 pp from consumer goods and -5.07 pp from intermediate goods.

The result of consumer goods, in particular, was influenced by 0.09 pp by durable consumer goods and by -0.52 pp by semi-durable and non-durable consumer goods, the latter with a weight of 83.03% in the calculation of index of that major category.

Mining and Quarrying Industries: for the second consecutive month, prices in the sector had a positive average change, this time at 4.64% (in December, 2.30%). In the 12-month period, there was also the closing of a second consecutive month with positive changes, in January: 4.17%, against 9.12% in December 2023. From this perspective, it was not until the two-month period December 2021-January 2022 that the price change was positive in two consecutive months. At that time, in December 2021, prices increased by 13.83% and, in January 2022, by 11.30%. In terms of index-number, that of January 2024, 198.17, is 28.96% lower than the peak of the series, in August 2021, 278.96; however, it was 89.05% higher than that of March 2020, 104.82, at the beginning of the pandemic.

The sector had, in the comparison between January 2024 and December 2023, and in terms of module, the second largest change among all industry sectors and, equally, the second largest influence (0.23 pp, in -0.31%).

Food: after four consecutive positive results, the sector's prices, in the comparison month against previous month, fell in January, -0.74%. The cumulative result in 12 months, in turn, went from -2.80%, in December 2023, to -3.98%. The January index number, 172.71, is 8.60% lower than the series peak, 188.97, observed in July 2022, and 50.29% higher compared to March 2020 (114.92), when the pandemic began.

The sector had the third biggest influence both in the monthly comparison (-0.18 pp in -0.31%) and in the cumulative index over 12 months (-0.96 pp in -5.56%). It is worth emphasizing that, in January, the monthly change and the year-to-date change are the same, given that both compare data from January with those from December of the previous year.

The four most influential products in the comparison between January 2024 and December 2023 were: “VHP (very high polarization) sugar”, “residues from soybean extraction”, both with a negative change, and, with a positive change, “frozen poultry and offal” and “sterilized / UHT / Long Life milk”. Markets without additional demand pressure and with good prospects for the next harvest explain the drop in VHP and soybean derivative prices. In turn, the price of chicken meat responds to the increase in demand at this time of year (consumers turn to more affordable proteins, in a period when extra expenses are concentrated), while the price of milk responds to a lower capture in dairy basins, explained in part by weather issues.

Paper and pulp: the succession of negative monthly results that occurred in the last 12 months, although concentrated in the first half of 2023, still affects the results of the activity, which presented the third largest change in the general industry, in module, in the cumulative index in 12 months, -12.88%. The result of this indicator can be explained, in part, by the cumulative devaluation of the dollar against the real, of 5.5% in the period. Furthermore, it is worth remembering that the result is also in line with the dynamics of international pulp prices, the most important product in the sector, which were on a downward trend throughout the first half of 2023. In January, the activity recorded -1.24% month-on-month, reversing the positive change occurred in the December 2023 indicator.

Petroleum refining and biofuels: for the second consecutive month, prices in the sector, compared to the previous month, had a negative averagechange, in January, -4.77% (-4.03%, in December). Thecumulative result in 12 months was -18.26%, completing a series of 11 negative results. The January index number, 172.50, is 34.24% lower than the peak of the series, which occurred in July 2022 (262.34), and 68.21% higher than that of the beginning of the pandemic, March 2020 (102.55).

The sector stood out for being, both in terms of change and influence, the first in the two comparisons made: against the previous month (in January this indicator is the same for the monthly comparison and the for the cumulative result in the year) and against the same month in the previous year. In the case of influence, from a monthly perspective, the sector accounted for -0.51 pp in -0.31%; in the cumulative perspective (over 12 months), for -2.15 pp in -5.56%.

In the comparison against December 2023, all highlighted products, both in terms of change and influence, had a negative change. "Diesel fuel", the product with the greatest weight in the activity calculation, was the main influence on this result.

Other chemicals: in January, the chemical industry presented the third negative result in comparison with prices from the previous month: -0.43%. The negative sequence, however, did not offset the effect of the increases seen in the sector between August and October of last year. Compared to July 2023, prices were around 1.80% higher in that reference month.

Even in the face of the current exchange rate depreciation – the R$/US$ rate increased 0.3% over the month – the lower prices of petrochemicals were a highlight, determining the sector's result. Adherence to the international reference in force in the first half of the month helped to explain the price dynamics in the domestic sphere. The moderate demand for derivatives more than offset the stability in the price of naphtha in the period.

Of the four products with the greatest influence on the sector's result, only petrochemicals presented lower prices compared to December, which was enough to guarantee the negative rate of the contribution to the sector.

In 12 months, the chemical industry presented deflation of -15.87%, after recording -16.38% in December in this same indicator. The result placed the sector in the spotlight among all those surveyed by the IPP, due to the magnitude of the change in its prices and the influence exerted on the general index (-1.37 pp). Both results were among the four most intense in the mining and quarrying and manufacturing industries.

Basic metals: in January, the activity's price change was 1.14% in relation to the previous month, the second positive result in a row after the series of seven consecutive falls observed in this indicator between May and November 2023. Furthermore, the result of January is the biggest increase observed in activity since May 2022, when it had changed 2.05%, and stood out as the fourth biggest influence among all sectors analyzed in the survey (0.07 pp, in -0.31%). But, despite the increases observed in the last two months, when compared with January 2023, the activity's prices accumulated, on average, a drop of 8.85%, standing out as the fourth sharpest change among the 24 activities surveyed in the IPP, in addition to being the fourth main influence on this indicator (-0.54 p.p. in -5.56%).

The sector's result this month was mainly influenced by the higher prices of steel products (an economic group that changed 2.08% in January, but still accumulated a drop of 8.66% in the last 12 months). During 2023, this group was largely affected by the low domestic demand for steel products and the need to maintain competitive prices due to the greater volume of imports. However, in recent months, it has suffered the impact of higher prices for iron ores, the main input in its production chain. It is also worth highlighting the importance of the exchange rate in the sector's results (in January, the dollar rose 0.3% against the real, but accumulated a fall of 5.5% in the last 12 months).