Lower fuel prices contract producer prices'Canada'

OTTAWA: Lower fuel prices helped cut prices for both Canadian industrial products and raw materials in June over May, Statistics Canada said on Friday.

Industrial product prices dropped for the second month in a row, falling by 0.3 percent. Market analysts had predicted a 0.1 percent decline.

The main reason for the decline was a 2.8 percent fall in prices for petroleum and coal products, led by a 4.3 percent fall in gasoline prices. This followed the decision by some oil exporters to increase production.

Excluding petroleum and coal, producer prices increased 0.2 pct.

Primary metal product prices were off by 1.3 percent as nickel prices dropped 9.2 percent on lower demand for stainless steel and market expectations of increased supply from new mines.

Raw materials prices fell by 2.2 percent in June from May as the prices for mineral fuels dropped by 4.9 percent. The decline was partially offset by a 4.6 percent increase in price for vegetable products.

Copyright Reuters, 2011