PPI Components Deliver Mixed Results

  • The Producer Price Index for the Mining & Quarrying industry for February 2026 fell by 1.3%, while the index for the Manufacturing industry increased by 0.5%.
  • The decline in the Mining & Quarrying industry was mainly due to a similar 1.3% fall in the index for the major group ‘Bauxite Mining & Alumina Processing’. Additionally, the PPI for the other major group, ‘Other Mining & Quarrying’, fell by 0.3%.
  • The upward movement in the index for the Manufacturing industry was due to increases in the major groups ‘Food, Beverages & Tobacco’ (0.2%) and ‘Refined Petroleum Products’ (2.0%).
  • For the period February 2025 – February 2026, the point-to-point index for the Mining & Quarrying industry fell by 30.8 %. This was due to a decline of 32.3% in the index for the major group ‘Bauxite Mining & Alumina Processing’.
  • Reflecting a 3.2% increase in the index for the major group ‘Food, Beverages & Tobacco’, the point-to-point index for the Manufacturing industry increased by 1.9%. However, the overall point-to-point increase in the industry’s index was tempered by a 4.7% fall in the index for the major group ‘Refined Petroleum Products’ which is in line with a 9.2% fall in oil prices on the world market in February 2026.
  • The global bauxite market is currently experiencing significant oversupply, largely driven by record exports from Guinea, which has led to a nearly 50% drop in prices since January 2025. The PPI is likely to remain influenced by the further surplus in 2026, which could continue to weigh on prices in the Mining & Quarrying sector as demand for bauxite and alumina levels off, given China’s strict national ceiling of 45 million tons on primarily aluminium production.  However, the Guinean government has plans to intervene by implementing export restrictions by April 2026, which could offset these declines.
  • In contrast, the Manufacturing index may experience upward pressure. With Brent crude surging past US$100/bbl following the start of the US-Israeli war on Iran and Iran’s restriction of access to the Strait of Hormuz. Furthermore, Liquefied Natural Gas (LNG), which accounts for 70% of local power generation, has seen prices climb by 3.8% since the onset of the conflict, with further volatility expected
  • Against this backdrop, the Manufacturing Index, particularly for Refined Petroleum Products, is projected to rise in March alongside electricity costs across all divisions. Ultimately, the rising cost of imported fuel and energy is poised to trigger a cost-push increase in producer prices across all manufacturing sub-groups.

(Sources: STATIN & NCBCM Research)