MNI DATA ANALYSIS: Cdn Indus Prices Down on Non-Ferrous Metals>

By Yali N'Diaye 

     OTTAWA (MNI) - Canadian industrial product prices declined 0.2% in 

July, led by primary non-ferrous metals, which include aluminum 

products, data from Statistics Canada showed Friday. 

     July was the first month that Canadian tariffs on imports of U.S. 

aluminum and steel applied in retaliation to U.S. tariffs on Canadian 

steel and aluminum in effect since June 1. 

     --UNCLEAR TARIFFS IMPACT 

     However, the impact of tariffs on industrial prices was unclear in 

July. 

     Despite the tariffs, primary non-ferrous metal prices, which 

include aluminum, fell 3.3% on the month, following a 1.5% increase in 

June. Prices for unwrought aluminum and aluminum alloys, on the other 

hand, decreased 3.1%. 

     On a 12-month basis, prices for primary non-ferrous metals rose 

7.8%, up from 7.3% in June. 

     Prices for primary ferrous metal products, which essentially 

reflect steel prices, rose 0.2% in July, after increasing 1.7% in June. 

However, price gains accelerated year-over-year to 8.1% from  5.4%. 

     In its July policy statement, the central bank said of the U.S. and 

Canadian tariffs that, "although there will be difficult adjustments for 

some industries and their workers, the effect of these measures on 

Canadian growth and inflation is expected to be modest." 

     It remains to be seen to which extent tariffs will be passed 

through to consumers. 

     Statistics Canada estimated earlier this month that the direct 

impact on inflation from Canadian tariffs on C$16.6 billion worth of 

U.S. imports in effect since July 1 will be a maximum of 0.07 percentage 

points in the annual CPI. 

     --ENERGY SLIGHTLY DOWN 

     Energy and petroleum prices edged down 0.1% on the month but were 

still up 27.8% year-over-year. 

     The industrial product price index decreased 0.3% excluding energy 

and petroleum. 

     However, energy and petroleum products were the largest upward 

contributor the year-over-year IPPI increase. 

     The IPPI rose 6.6% year-over-year in July, the largest gain since 

October 2011. Excluding energy and petroleum, the index rose 3.6% from 

July 2017. 

     Overall, prices were down in only 7 of 21 major commodity groups on 

the month. 

     The 0.2% monthly decline suggests prices could have a modest 

downward impact on the value of manufacturing sales over the month. 

     --Raw Material Prices Up 

     Meanwhile, raw material prices rose 0.7% on the month, led by a 

3.8% gain in crude and energy. Excluding the latter category, raw 

material prices actually fell 2.0% on the month, but rose 2.1% 

year-over-year. 

     Crude energy rose 53.2% year-over-year. 

--MNI Ottawa Bureau; yali.ndiaye@marketnews.com 

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