Canada’s raw materials prices increased 1.60% month-over-month (MoM) in November 2025, according to the latest data from the Sigmanomics database. This figure slightly missed the 1.70% rise recorded in October but exceeded the market estimate of 0.60%. The current reading reflects a continued recovery from the mid-year troughs, where prices fell as much as 3.00% in May. Over the past 12 months, the average monthly change stands at approximately 0.50%, highlighting recent volatility.

Drivers this month

• Strong demand for metals and energy commodities amid industrial restocking.
• Supply chain disruptions easing but still causing localized price pressures.
• Seasonal factors related to construction and manufacturing cycles.

Policy pulse

The 1.60% increase remains above the Bank of Canada’s inflation target range of 1-3%, signaling persistent cost pressures in upstream commodity markets. This may influence the central bank’s cautious stance on further rate hikes.

Market lens

Immediate reaction: The Canadian dollar (CADUSD) strengthened 0.30% post-release, reflecting optimism about resource sector resilience. Meanwhile, 2-year government bond yields edged up 5 basis points, pricing in potential inflation persistence.

Raw materials prices are a critical input for Canada’s inflation and growth outlook. The 1.60% MoM rise in November follows a volatile year marked by swings from 3.70% in February to -3.00% in May. This volatility reflects global commodity market dynamics and domestic supply constraints.

Monetary Policy & Financial Conditions

The Bank of Canada has maintained a cautious tightening bias amid inflationary pressures. The recent raw materials price increase supports the case for a steady policy stance, balancing growth concerns with inflation control. Financial conditions remain moderately tight, with credit spreads stable but borrowing costs elevated.

Fiscal Policy & Government Budget

Canada’s fiscal policy remains expansionary, with ongoing infrastructure spending supporting commodity demand. However, rising raw materials costs could pressure government budgets, especially in resource-dependent provinces. The federal government’s budget outlook anticipates moderate deficits, with commodity price volatility a key risk factor.

External Shocks & Geopolitical Risks

Global geopolitical tensions, particularly in energy-producing regions, continue to influence raw materials prices. Supply chain disruptions from trade disputes and sanctions remain a downside risk. Conversely, easing tensions could stabilize prices and support Canadian exports.

Drivers this month

• Energy prices rose 2.10% MoM, driven by crude oil and natural gas demand.
• Metal prices increased 1.40%, supported by industrial restocking.
• Agricultural raw materials edged up 0.80%, reflecting weather-related supply concerns.

Policy pulse

The raw materials price increase remains a key input for inflation expectations. The Bank of Canada’s target inflation rate of 2% is challenged by these upstream cost pressures, suggesting a cautious approach to monetary easing.

Market lens

Immediate reaction: The Canadian dollar appreciated 0.30%, while 2-year bond yields rose 5 basis points, indicating market anticipation of sustained inflationary pressures. Commodity-linked equities showed modest gains.

Looking ahead, raw materials prices in Canada face a complex set of influences. The baseline scenario projects moderate monthly increases averaging 0.80% over the next six months, supported by steady demand and easing supply constraints. However, risks remain on both sides.

Bullish scenario (30% probability)

• Global economic recovery accelerates, boosting commodity demand.
• Supply chain disruptions resolve faster than expected.
• Energy transition policies increase demand for critical minerals.

Base scenario (50% probability)

• Gradual normalization of supply chains.
• Moderate inflationary pressures persist.
• Monetary policy remains cautious but steady.

Bearish scenario (20% probability)

• Geopolitical shocks disrupt commodity flows.
• Global slowdown reduces demand sharply.
• Stronger monetary tightening dampens growth.

Structural & Long-Run Trends

Long-term trends include a shift toward sustainable resource extraction and diversification of supply sources. These factors may moderate price volatility but could also introduce new cost pressures related to green technologies and regulatory compliance.

Canada’s raw materials prices continue to be a bellwether for inflation and economic health. The November 2025 MoM increase of 1.60% signals ongoing upstream cost pressures amid a volatile global environment. Policymakers must balance inflation control with growth support, while markets remain sensitive to geopolitical and supply chain developments. Structural shifts toward sustainability will shape the medium-term outlook, requiring adaptive strategies from businesses and governments alike.

Key Markets Likely to React to Raw Materials Prices MoM

Raw materials prices directly impact commodity-linked equities, currency pairs, and energy markets. The following symbols historically track these price movements and are likely to react to the latest data:

• FCX – A major copper mining stock sensitive to metal price fluctuations.
• CADUSD – The Canadian dollar pair, closely tied to commodity price trends.
• BTCUSD – Bitcoin, often viewed as a hedge against inflation and commodity price shocks.
• XOM – ExxonMobil, an energy sector giant impacted by crude oil price changes.
• USDCAD – The inverse Canadian dollar pair, reflecting currency strength shifts.

FAQs

What is the significance of the Raw Materials Prices MoM for Canada?

The Raw Materials Prices MoM indicator measures monthly changes in commodity input costs, influencing inflation and economic growth in Canada.

How does the November 2025 reading compare historically?

The 1.60% increase is the second-highest monthly rise this year, following February’s 3.70%, and marks a recovery from mid-year declines.

What are the main risks affecting future raw materials prices?

Key risks include geopolitical tensions, supply chain disruptions, global demand shifts, and monetary policy changes.

Final Takeaway: Canada’s raw materials prices remain elevated and volatile, signaling persistent inflationary pressures and underscoring the need for vigilant monetary and fiscal policy coordination in the months ahead.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.