The prices of the mining and manufacturing industries increased, on average, 0.35% in March when compared with February. In this same comparison, 17 out of 24 activities recorded positive changes of prices, against 14 last month. Therefore, the cumulative index in the year stayed at 0.25% against –0.10 in February 2024. That was the third lowest result ever registered for March since the beginning of the time series, in 2014. The cumulative indicator in 12 months hit -4.13%. The IPP had been -0.65% in March 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.

The four biggest changes in March were the following: wearing apparel (2.65%), other chemicals (2.06%), pulp and paper (1.92%) and toiletries, soaps and cleaning products (-1.46%).

In terms of influence, the highlights were: other chemicals (0.16 pp), petroleum refining and biofuels (0.10 pp), food products (-0.09 pp) and pulp and paper (0.06 pp).

In March, the cumulative index in the year hit 0.25%, the third lowest value ever registered for March since the beginning of the time series in 2014. This indicator had been -0.10% in February 2024 and, in 2023, the cumulative rate up to March had been -0.64%. Among the activities that recorded the highest percentage changes in this indicator, the highlights were: mining and quarrying industries (5.41%), basic metals (4.26%), footwear and leather products (3.72%) and wearing apparel (3.50%).

The sectors with the biggest influence were: food products (-0.55 pp), petroleum refining and biofuels (-0.33 pp), mining and quarrying industries (0.27 pp) and basic metals (0.25 pp).

In the cumulative rate in 12 months, the price change was -4.13% against -5.08% in February. The four biggest changes comparing March with the same month in the previous year were: petroleum refining and biofuels (-11.81%), other chemicals (-10.31%), printing (7.43%) and wood products (-6.93%).

The sectors with the biggest influence on the aggregate result were: petroleum refining and biofuels (-1.32 pp), food products (-1.05 pp), other chemicals (–0.86 pp) and basic metals (-0.41 pp).

Among the major economic categories, the price changes of 0.35% over February were the following: 0.18% in capital goods, 0.53% in intermediate goods and 0.12% in consumer goods, being the change reported in durable consumer goods of -0.09% and that in semi and non-durable consumer goods of 0.16%.

The major influence among the major economic categories was exerted by intermediate goods, whose weight in the overall index was 55.50% and it accounted for 0.30 pp. of the 0.35% change in the mining and manufacturing industries. Consumer goods (influence of 0.04 pp) and capital goods (0.01 pp) completed the list. In the case of consumer goods, the influence observed in March was split into -0.01 pp, due the change in prices of durable consumer goods and 0.05 pp, due to the change in prices of semi and non-durable consumer goods.

As for the cumulative index in the year, the change in the broad economic categories reached: -0.03%, in the case of capital goods; -0.16% in intermediate goods; and 0.94% in consumer goods, in which durable consumer goods had a cumulative change of 0.26%, whereas semi and non-durable consumer goods, 1.08%.

In terms of influence on the cumulative result in the year, capital goods accounted for 0.00 pp of the rate of 0.25% registered by the overall industry up to March this year. Intermediate goods, in turn, accounted for -0.09 pp, whereas consumer goods exerted an influence of 0.35 pp on the aggregated result of industry, an influence shared by prices of durable consumer goods (0.02 pp) and semi-durable and non-durable consumer goods (0.33 pp).

Considering the cumulative index in 12 months, the change of prices of capital goods was -2.21% in March 2024.  The prices of intermediate goods, in turn, changed -6.39% in the period of one year and the change in consumer goods was -0.93%, with durable consumer goods having changed by 1.71% and semi and non-durable consumer goods, -1.44%.

Considering the influences on the aggregate result, consumer goods, responsible for 7.69% in the general index, accounted for -0.17 pp of the rate of -4.13% of cumulative change in 12 months in industry, in the reference month. The result of March 2024 was also influenced by -0.33 pp from consumer goods and by -3.63 pp from intermediate goods. The result of consumer goods was particularly influenced by durable consumer goods (0.10 pp) and semi and non-durable consumer goods (-0.43 pp.), the latter with a contribution of 83.09% to the index of this broad category.

The major highlights were:

Mining and quarrying industries The result in March over February was negative (-1.04%), after three consecutive months with a positive average change of prices. As a result, the cumulative index in the year retreated from 6.52% in February to 5.41% in March. In the comparison between March 2024 and March 2023, the result, positive as it has been since December 2023, was 1.19%, the lowest one among those four.

This sector stood out due to the fact of having the most intense change (positive) in the cumulative index in the year and appearing as the third biggest influence (0.27 pp out of 0.25%) in this same indicator. The negative result was reached due to the retreat in the prices of the two products of the extraction of iron ore, a movement that followed the foreign market.

Food: the prices in this sector changed -0.38% in March 2024, recording the third consecutive month of negative changes. As a result, it changed -2.21% in the cumulative index in the year (in March 2023, it had been -0.61%). As happening since April 2023 (-0.80%), the cumulative index in 12 months remained on the negative side (-4.36%).

This sector stood out due to the fact of appearing among the four biggest influences in the three indicators computed: it was the third and the only negative change among those four in the monthly indicator (-0.09 pp out of 0.35%), the first one in the cumulative index in the year (-0.55 pp out of 0.25%) and the second one in the cumulative rate in 12 months (-1.05 pp out of -4.13%).

Of the four products with the biggest influence in the comparison of March against February, three of them registered a negative price change. In all the cases, the companies reported a lower demand. In the case of “crystallized sugar”, this retreat was followed by a lower price in the foreign market (in spite of the devaluation of 0.3% of the real against the dollar). Lastly, the only product with a positive price change, “VHP sugar”, benefited from a higher foreign demand, coupled with the devaluation of the real against the dollar.

Pulp and paper: this activity changed 1.92%, the third highest change in the overall industry in March. The foreign prices of pulp remained high, caused by interruptions in the supply chain, associated with the reduction in the world supply, especially in North America and China, and by logistic challenges in the trade among countries. With this result, the cumulative index in the year evolved to 3.40% and, in relation to the last 12 months, to -6.21%.

Petroleum refining and biofuels: the average change in the prices of this sector was positive (0.93%) for the second month in a row. Even with the cumulative change in these last two months (1.79%), the cumulative index in the year remained negative (-3.06%). It had been -7.04% in March 2023. In the cumulative rate in 12 months, the result was negative (-11.81%) for the 13th consecutive month, the second less intense, a position reported in March 2023 (-10.42%).

Besides being the most intense (and negative) change in the perspective of the cumulative indicator in 12 months, the behavior of the prices in this sector made it, among all the activities raised by the IPP, the second influence both in the monthly indicator (0.10 pp out of 0.35%) and in the cumulative rate in the year (-0.33 pp out of 0.25%), and the first one in the cumulative index in 12 months (-1.32 pp out of -4.13%).

Other chemicals: the average price of chemicals at the factory gate increased 2.06% in March over February. The rise highlighted this sector among the industrial activities surveyed by the IPP, both due to its magnitude, the second most intense change in this type of comparison, and to its contribution to the overall result of this same indicator. Contributing with 0.16 pp to the change of 0.35% of the overall industry, the chemical sector exerted the major influence on the IPP compared with February. With the rise in March, the cumulative index in the year of this sector hit 2.04%, returning to the positive side.

Having the third highest weight in the calculation of the overall index (7.84%), this sector also stood out in the composition of the cumulative indicator in 12 months, this time with a negative signal, -0.86 pp out of the cumulative index of -4.13% of the overall industry. Compared with the prices in March 2023, the products were 10.31% cheaper in the chemical sector in the reference month.

Between February and March, petrochemicals were, once again, important to explain the sectoral result. With naphtha rising over the last months (following the oil barrel), its derivative chain has been pressed in costs and, in this perspective, it is also important to consider the effect of the currency devaluation in the last months over the price of the input. The devaluation in the current month increased the amount received in reais (R$) for the domestic product quoted in foreign currency.

Basic metals: the price change of this activity was 0.75% in relation to the previous month, hitting the fourth consecutive positive figure in this indicator. As a result, this activity accumulated a rise of 4.26% in the first quarter of 2024, highlighting as the second highest change and the fourth biggest influence (0.25 pp out of 0.25%) among all the sectors analyzed. In the cumulative indicator in 12 months, this activity stood out as well, though with a negative result. This sector accumulated a drop of 6.62% in the period, showing the fourth most intense influence (-0.41 out of -5.16%).

Of the four most influential products on the monthly indicator, three of them registered positive figures, being “gold for non-monetary use” exerted the major impact, as it has been following the rise in the quotation of gold in the foreign market. The other products that stood out were from the steel group. Although it showed two products with a positive change among its major highlights, it dropped 0.66% this month, the first negative figure in the year and in the opposite direction of the sector average. The result this month could be partly explained by the drop noticed in iron ore, the main input used in its productive chain.