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In April, the Canadian Industrial Product Price Index (IPPI) increased 0.5 percent compared with March, led by higher prices for petroleum and precious metals, according to Statistics Canada. The Raw Materials Price Index (RMPI) rose 6.8 percent as a result of a strong upward movement in crude oil prices. The overall increase in the RMPI was moderated by a sharp decline in radioactive concentrates.
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The IPPI posted a growth rate of 0.5 percent in April, slower than those of 0.8 percent in February and 1.0 percent in March. The gain in April was primarily driven by a 4.2 percent increase in petroleum and coal products and a 1.9 percent rise in primary metal products. Chemical products (+0.7 percent) and meat, fish and dairy products (+0.6 percent) contributed more modestly to the increase.
Prices for petroleum and coal products increased in April, but at a more moderate pace than the 8.2 percent observed in March.
In April, prices for primary metal products rose 1.9 percent and registered their 10th consecutive advance. Silver and platinum (+19.0 percent) as well as precious metal basic manufactured shapes (+15.0 percent) grew sharply, while copper, iron and steel, and aluminum products made very modest gains. On the other hand, the upward movement in primary metal products was dampened by a 3.8 percent decline in nickel products. Reduced production in Asia continued to negatively affect the demand for metals.
The IPPI advance was moderated by a 1.0 percent decline in prices for motor vehicles and other transport equipment. The decrease was largely the result of the 1.9 percent appreciation of the Canadian dollar against the US dollar.
Some Canadian producers who export their products to the United States are generally paid on the basis of prices set in US dollars. Consequently, the strength of the Canadian dollar in relation to the US dollar had the effect of reducing the corresponding prices in Canadian dollars. Without the impact of the exchange rate, the IPPI would have risen 1.0 percent instead of 0.5 percent.
In April, excluding petroleum and coal products, the IPPI decreased 0.1 percent after remaining unchanged in March.
IPPI 12-Month Change
The IPPI rose 5.0 percent in April compared with the same month a year earlier, after advancing 3.7 percent in February and 5.0 percent in March. Of the 21 major commodity aggregations, 16 were up and 5 decreased, which is comparable to the distribution in March.
In the past 12 months, the IPPI advance was driven mainly by higher prices for petroleum and coal products (+28.7 percent) and primary metal products (+12.3 percent).
Year over year, the largest contributors to the increase in primary metal products were precious metals, particularly silver and platinum (+104.8 percent), as well as precious metal basic manufactured shapes (+103.0 percent). Copper and iron and steel products played a less important part, with respective increases of 13.1 percent and 3.8 percent.
Chemical products (+4.9 percent) and fruits, vegetables, feeds and other food products (+6.2 percent) made smaller contributions to the IPPI growth.
In April, the 4.9 percent year-over-year increase in the value of the Canadian dollar relative to the US dollar dampened the IPPI advance. Without the impact of the exchange rate, the IPPI would have risen 6.1 percent instead of 5.0 percent.
Prices for motor vehicles and other transport equipment, which are particularly sensitive to the exchange rate, fell 2.3 percent in April compared with the same month a year earlier, continuing the downward movement that started in October 2009.
Excluding petroleum and coal prices, the IPPI increased 2.1 percent year over year in April, a rate of growth similar to those observed in January and February, but inferior to that of 2.6 percent in March. This index has recorded year-over-year increases since May 2010.
Raw Materials Price Index
The Raw Materials Price Index (RMPI) rose sharply by 6.8 percent in April, compared with increases of 2.2 percent in February and 5.8 percent in March. The RMPI growth was primarily driven by mineral fuels (+13.2 percent). Following a 16.2 percent increase in March, crude oil prices rose 14.1 percent in April. The crude oil price index was 32.8 percent higher than in January.
Price increases for animals and animal products (+1.6 percent), vegetable products (+1.4 percent) and wood products (+1.8 percent) contributed more modestly to the RMPI advance in April.
Non-ferrous metals (-0.6 percent) slightly dampened the impact of higher crude oil prices on the RMPI.
The drop in prices for non-ferrous metals in April was driven by a sharp decline in the price of radioactive concentrates (-17.3 percent), which resulted from the earthquake and the tsunami in Asia in March. The decrease in radioactive concentrates offset the advances of all other metals. With the exception of radioactive concentrates, prices increased for all non-ferrous metals, particularly precious metals (+7.4 percent).
Excluding mineral fuels, the RMPI increased 0.6 percent in April, following a 1.8 percent decline in March.
Compared with the same month a year earlier, the RMPI was up 22.4 percent in April, following gains of 11.4 percent in February and 16.8 percent in March. Year over year, the RMPI has been on an upward trend since November 2009. The main contributors to the RMPI year-over-year increase in April were mineral fuels (+30.0 percent), non-ferrous metals (+17.2 percent), vegetable products (+40.3 percent) and animals and animal products (+9.7 percent).
Excluding mineral fuels, the RMPI recorded a year-over-year increase of 15.1 percent in April, slower than the growth rates of 20.0 percent in February and 17.2 percent in March.