The Canadian Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) both saw significant increases in April 2024, highlighting a period of robust price growth across various sectors. According to data from Statistics Canada, the IPPI rose by 1.5% month-over-month and 1.4% year-over-year, while the RMPI experienced a sharp 5.5% monthly increase and a 3.1% annual rise.
In April 2024, the IPPI continued its upward trajectory, marking the third consecutive monthly increase. The primary driver of this surge was the price of primary non-ferrous metal products, which jumped by 8.3% month-over-month. Within this category, unwrought silver and silver alloys saw a notable increase of 13.5%, and unwrought gold and gold alloys rose by 9.1%. The escalation in precious metal prices was largely attributed to heightened geopolitical tensions in the Middle East, which spurred safe-haven demand, coupled with strong investment demand from both investors and central banks.
Industrial metals also experienced significant price hikes. Unwrought copper and copper alloys surged by 10.3%, and unwrought aluminum and aluminum alloys increased by 7.4%. Contributing factors included manufacturing growth in China, as evidenced by the Caixin China General Manufacturing Purchasing Managers’ Index reaching its highest level since February 2023, and supply concerns stemming from sanctions on Russian metals by the United States and the United Kingdom.
Energy and petroleum products saw a 2.5% price increase, with finished motor gasoline prices rising by 6.7%, driven by higher crude oil prices and seasonal demand. However, diesel prices fell slightly by 0.4%, influenced by reduced demand for home heating oil.
The prices of pulp and paper products rose by 4.0%, the largest monthly increase in wood pulp prices since October 1994. This was due to higher manufacturing costs and supply constraints in North American operations.
Chemicals and chemical products continued their upward trend, with a 1.3% increase driven by higher prices for petrochemicals and plastic resins. The rise in petrochemical prices was linked to the increased cost of crude oil.
Conversely, lumber and other wood products exerted a downward pressure on the IPPI, with a 1.3% decline. This was mainly due to a 3.4% drop in softwood lumber prices, as economic uncertainty and weather conditions dampened demand.
The IPPI’s annual increase of 1.4% in April 2024 marked the end of a six-month streak of year-over-year declines. Precious metals, particularly unwrought gold, silver, and platinum group metals, were the largest contributors to this increase, with a notable rise of 11.8%. Other significant contributors included softwood lumber (10.8%), motor gasoline (4.4%), and light-duty trucks and SUVs (2.1%).
On the other hand, prices for unwrought nickel and nickel alloys, grain and oilseed products, and other animal feed saw substantial year-over-year declines, reflecting a correction from previously elevated price levels.
The RMPI’s 5.5% monthly increase in April 2024 followed a 4.3% rise in March, representing the most significant consecutive monthly increases since March 2022. Excluding crude energy products, the RMPI rose by 5.3%.
Crude energy products led the RMPI increase with a 5.8% rise, driven primarily by a 6.2% increase in conventional crude oil prices. Factors contributing to this surge included heightened geopolitical tensions and voluntary production cuts by OPEC+ members, which reduced global oil inventories.
Metal ores, concentrates, and scrap prices rose by 7.7% in April, with gold, silver, and platinum group metal ores and concentrates increasing by 10.3%. Nickel ores and concentrates also saw a 5.6% rise, influenced by supply constraints due to mine permitting delays and sanctions on Russian metals.
Prices for animals and animal products climbed for the third consecutive month, with cattle and calves prices up by 5.2% and hog prices rising by 6.1%. Strong demand from Canadian meat packers and high levels of Canadian cattle slaughtered in U.S. plants contributed to these increases, alongside seasonal patterns in hog demand.
On an annual basis, the RMPI rose by 3.1% in April 2024. Key contributors to this increase included conventional crude oil (8.1%), gold, silver, and platinum group metal ores and concentrates (16.6%), cattle and calves (14.1%), and synthetic crude oil (6.7%).
Offsetting these increases, prices for nickel ores and concentrates, canola, wheat, and other grains saw significant year-over-year declines, primarily due to strong global supply over the past year.