Electricity pulls PPI down
The producer price index (PPI) had a small down turn in March. Lower prices on electricity, gas and steam was an important factor for this outcome. However, the fall was reduced by higher prices on refined petroleum products.
Prices on refined petroleum products increased with 7.8 per cent in March. The industry has seen continuously price increases for several months know and the March increase seems to be part of a trend, according to new figures from the Producer price index.
Extraction of oil and natural gas had a small price reduction in March and had less effect on the PPI total than the two previous months. The price reduction can be traced to a lower price on natural gas. Individually, oil and natural gas had larger price changes, but the changes in March went in separate directions.
Figure 1. Price index. 2015=100
|Basic metals||Non-ferrous metals|
Record high price level for basic metals
Basic metals increased with 1.3 per cent and continued its price increase from previous month. The result was mainly driven by increase in prices for production of iron and steel. Basic metals have seen a continuously price increase for several months and was as of March at a record high level.
Bloomberg sees the high prices as result of bets that the economic recovery from the pandemic and a international push for more green energy will increase demand.
Declining prices for electricity
Electricity had a price fall of 13,8 per cent in March, but nevertheless, the price level for March is considerably higher than the same month in 2020. This can be traced back to the increase from December 2020 to January 2021.