Producer Prices Rose in February Owing to Commodity Price Shocks

• For February 2022, output prices for producers in the Mining and Quarrying industry increased by 0.5%. The movement was mainly attributed to a 0.6% rise in the index for the major group ‘Bauxite Mining & Alumina Processing’. 
• The bauxite and alumina market has been impacted by the substantial increase in energy and raw material costs, growing demand, decline in China’s production capacity, reduction in global inventories and the impact of COVID-19. Furthermore, fears over the supply of aluminium to the global market, following the sanctions against Russia which has the largest aluminium producer outside of China, also caused prices to reach new highs which influenced the rise in the index. 
• The index for the Manufacturing industry increased by 3.1%. The main contributors to the increase in the index for the Manufacturing industry were the major groups, ‘Refined Petroleum Products’ up by 9.3%, ‘Food, Beverages & Tobacco’ which moved up by 1.7% and ‘Other Non-Metallic Mineral Products’ which increased by 6.9%. This industry continues to be adversely affected by higher costs for shipping and raw materials on the international market owing to both the lingering effects of the pandemic and the current geopolitical tensions between Russia-Ukraine. 
• These February outturns contributed to a 12-month point-to-point (February 2021 – February 2022) increase of 39.9% and 22.2% in both the Mining & Quarrying and Manufacturing industry indices, respectively. It is anticipated that these indices will rise further in the near term as the Russia-Ukraine conflict and its impact on commodity prices continue to unfold.

(Source: STATIN and NCBCM Research)