Canadian industrial product prices drop in July while raw material prices rise

Friday, 27 August 2021 19:50:46 (GMT+3)   |   San Diego

According to Statistics Canada, the Industrial Product Price Index (IPPI) fell 0.4 percent month over month in July, and was up 15.4 percent year over year. The Raw Materials Price Index (RMPI) rose 2.2 percent on a monthly basis in July and 37.7 percent year over year.

In July, the Industrial Product Price Index (IPPI) fell 0.4 percent on a monthly basis. Among the 21 major commodity groups, 17 were up, 3 were down, and 1 was unchanged.

Prices for basic and semi-finished iron or steel products were up 5.9 percent in July, an 11th consecutive monthly increase. Compared with July 2020, prices are 50.9 percent higher, the biggest year-over-year increase on record. The increase in steel and iron has been mainly driven by strong demand from China, Statistics Canada said. However, the ascent has been volatile due to uncertainty about environmental policy, infrastructure spending, and the effects of the COVID-19 Delta variant. In August, benchmark prices for iron and steel, which are typically correlated, decoupled. A curb on steel output in China has reduced demand for iron ore, pushing on its price downward.

Year-over-year, the IPPI rose 15.4 percent in July, a 12th consecutive advance, following a 17.2 percent increase in June. This was mostly driven by higher prices for energy and petroleum products (+46.9 percent), primary ferrous metal products (+49.8 percent), as well as lumber and other wood products (+39.1 percent) compared with July 2020.

In July, the Raw Materials Price Index (RMPI), was up by 2.2 percent, a 10th consecutive monthly increase. Of the six main commodity groups, five were up and one was down. The main contributor to the upward movement was higher prices for both conventional crude oil (+4.5 percent) and synthetic crude oil (+4.9 percent).

Year over year, the RMPI was up 37.7 percent. This was mostly driven by higher prices for crude energy products (+66.6 percent), canola (+84.8 percent) and live animals (+26.0 percent).

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