Continued increase in PPI
The producer price index (PPI) continued August’s increase in September, after having dropped continuously through 2020. The total index rose by 2.8 percent this month, with increased price on natural gas as the main driver.
The price on natural gas rose by over 40 percent from August, which together with increased prices on electricity, gas and steam lead to the total increase in PPI. The price on crude oil, on the other hand, fell by about 5 percent in September. This reduced the total increase, whereas the combined index for manufacturing industries stood at a no-change, despite some significant increases.
Figure 1. Price index, 2015=100
|Manufacturing, total||Extraction of crude oil and natural gas|
Price increase on important metals
Of the industries with the mentioned price increases in September, metal industry was the largest contributor. The rise in prices on important non-ferrous metals were especially high, with an increase of 2.7 percent on the export market. One reason for this increase may have been that the Norwegian krone weakened slightly against both US dollars and Euro in September. Aluminum had a price increase measured in NOK of 14.2 percent, whereas nickel had an equivalent increase of 4.5 percent in September. As important export goods, the metal prices were significant contributary factors to the rise in the total index in September.
Continued increase on electricity
The electricity prices in PPI have faced large increases in the two latest months after mainly falling in the first half of 2020. Because of this, the percentagewise increase was large in September, albeit from a low base level. Compared to September 2019, the prices on electricity still lies lower, at 21 percent. On the export market this 12-month comparison gives 50 percent lower.
According to the Norwegian Water Resources and Energy Directorate (NVE), the electricity prices have ebbed and flowed over the weeks during September. Magazine fillings above normal levels and reductions in transfer capacity have been mentioned as reasons on the price decreasing side. On the price increasing side, large price increases in Europe is given as the main contributor. Very low production from wind and reduced production from nuclear plants and coal made the system price on the Nordic power exchange high. This system price is a cornerstone in price development for electricity in PPI, especially on the export market, where the increase was a little over 81 percent.