Natural gas pulls PPI up
The producer price index (PPI) increased by 4.1 per cent in October. The increase in price of natural gas was the most important contributor, while several industrial industries and electricity also increased.
The price of natural gas rose by almost 50 percent from September, while the oil price had a flat development. In total, this led to an increase in the index for extraction of crude oil and natural gas by 17.5 percent in October. The rise of natural gas prices, together with higher prices in several industrial industries and electricity, gas and steam, contributed to the increase in PPI of 4.1 percent in October.
Price increase on important metals continues
The metal industry continued its price rise in October by 1.4 percent, driven by higher export prices of important non-ferrous metals. This is the fourth month in a row that prices of non-ferrous metals have increased. The Norwegian krone continued to weaken against the dollar and euro in October. This may have affected the price of both aluminum and nickel, which increased by 4.7 percent and 4 percent measured in NOK, this month. As important exports, metal prices contributed to the overall increase in PPI for October.
Some other positive contributions to the rise in PPI in total was increased prices for chemical products and non-metallic mineral products, while refined petroleum products and food products went in the opposite direction.
Figure 1. Price index. 2015=100
|Non-ferrous metals||Manufacturing, total|
Continued increase in domestic electricity prices
Prices on electricity have had increases since July, after decreases in the first six months. The October part of these increases has been modest, with an increase of 1.9 percent on the domestic market. For comparison, this increase was at 9.6 percent in September. At the export market, there was a decrease of 5 percent in October.
Figure 2. Price index. December 2019=100
|Electricity, gas and steam - Domestic market||Electricity, gas and steam - Export market|
In their weekly reports (in Norwegian), the Norwegian Water Resources and Energy Directorate (NVE), writes that the prices increased early in October as a result of drier and colder weather. Later, this increase was dampened by mild weather and lower consumption. High wind power production in Europe has given lower system price on the common Nordic electricity exchange, which has resulted in cheap electricity from outside Norway. This led to the decreasing prices on the export market.