Canada’s Raw Materials Prices YoY: November 2025 Release and Macro Implications
Key Takeaways: Canada’s raw materials prices rose 5.80% YoY in November 2025, below the 8.60% consensus and down from October’s 8.40%. This marks a notable easing after a volatile year marked by swings from double-digit inflation to brief deflation. Monetary tightening and easing global demand weigh on prices. Fiscal policy remains supportive but cautious amid geopolitical uncertainties. Financial markets reacted with muted volatility, reflecting a cautious outlook. Structural trends suggest a gradual normalization but risks from supply shocks and global tensions persist.
Table of Contents
Canada’s raw materials prices YoY rose 5.80% in November 2025, according to the latest data from the Sigmanomics database. This figure undershot the 8.60% market estimate and declined from October’s 8.40%, signaling a moderation in input cost inflation. The geographic scope covers all major Canadian raw materials sectors, including energy, metals, and agricultural commodities. Temporally, this release reflects year-over-year changes, capturing inflationary pressures over the past 12 months.
Drivers this month
- Energy prices eased, contributing -1.20 percentage points (pp) to the slowdown.
- Metal prices remained elevated but softened slightly, adding 2.50 pp.
- Agricultural raw materials showed modest gains, 0.50 pp.
Policy pulse
The current reading sits below the Bank of Canada’s inflation target band of 1-3%, suggesting easing cost pressures. This may reduce urgency for aggressive monetary tightening in the near term.
Market lens
Immediate reaction: The Canadian dollar (CADUSD) strengthened 0.30% within the first hour post-release, reflecting relief at lower-than-expected inflationary pressure. Short-term bond yields dipped 5 basis points, signaling a slight easing in rate hike expectations.
Raw materials prices are a core input to Canada’s inflation dynamics and industrial cost structure. The 5.80% YoY increase contrasts with the volatile swings seen earlier in 2025, when prices peaked at 11.80% in February and plunged to -3.60% in May. This volatility reflects shifting global supply-demand balances and commodity market disruptions.
Monetary Policy & Financial Conditions
The Bank of Canada has maintained a cautious tightening stance throughout 2025, raising policy rates by 125 basis points since January. The moderation in raw materials inflation supports a potential pause or slower pace in hikes. Financial conditions remain moderately tight, with credit spreads stable and mortgage rates elevated.
Fiscal Policy & Government Budget
Canada’s fiscal policy continues to provide measured stimulus, with infrastructure spending and green energy investments offsetting some cost pressures. The government’s budget deficit narrowed to 2.10% of GDP in Q3 2025, reflecting improved tax revenues amid moderate growth.
External Shocks & Geopolitical Risks
Global supply chain disruptions have eased but remain a risk factor. Geopolitical tensions in Eastern Europe and Asia-Pacific continue to inject uncertainty into commodity markets, particularly energy and metals. Trade policy shifts and sanctions also influence price volatility.
Historical comparisons highlight the unusual volatility this year. The 5.80% YoY is the lowest since April 2025’s 3.90%, indicating a cooling phase after mid-year turbulence. The data aligns with global commodity indices that have also moderated.
This chart reveals a clear trend of raw materials price inflation peaking early in 2025 and gradually normalizing. The downward trajectory suggests easing input cost pressures, which could alleviate inflationary risks for Canadian producers and consumers alike.
Market lens
Immediate reaction: Canadian 2-year bond yields fell 7 basis points post-release, reflecting reduced inflation risk. The CADUSD pair rallied, indicating improved investor confidence in Canada’s inflation outlook.
Looking ahead, raw materials prices in Canada face a complex interplay of factors. The base case scenario projects a gradual rise to 6.50% YoY by mid-2026 as global demand stabilizes and supply chains normalize (probability ~55%).
Bullish scenario (20% probability)
- Stronger global growth, especially in Asia, drives commodity demand.
- Supply constraints persist due to geopolitical tensions.
- Prices accelerate above 8% YoY, fueling broader inflation.
Bearish scenario (25% probability)
- Global recession risks materialize, reducing commodity demand.
- Technological advances and substitution lower raw materials intensity.
- Prices fall below 3% YoY, easing inflation pressures significantly.
Policy pulse
The Bank of Canada will likely monitor these trends closely. A sustained decline in raw materials inflation could prompt a pause in rate hikes, while a resurgence might trigger renewed tightening.
Canada’s raw materials prices YoY data for November 2025 signals a turning point after a turbulent year. The easing from double-digit inflation to a moderate 5.80% reflects improving supply conditions and cautious demand. Monetary and fiscal policies remain calibrated to balance growth and inflation risks amid ongoing geopolitical uncertainties. Market reactions suggest confidence in a soft landing but caution prevails given external shocks.
Structural trends such as green energy transitions and supply chain diversification will shape long-run raw materials price dynamics. Investors and policymakers should weigh upside risks from geopolitical flare-ups against downside risks from global slowdown.
Key Markets Likely to React to Raw Materials Prices YoY
Raw materials prices are closely tracked by commodity-linked equities, currency pairs, and crypto assets sensitive to inflation and industrial demand. Movements in these markets often anticipate shifts in raw materials inflation and broader economic trends.
- FCX: A major copper producer, FCX’s stock price correlates strongly with metal price trends.
- CADUSD: The Canadian dollar’s value is sensitive to commodity price fluctuations.
- BTCUSD: Bitcoin often reacts to inflation expectations and monetary policy shifts.
- XOM: ExxonMobil’s performance tracks energy price movements.
- USDCAD: The inverse of CADUSD, useful for hedging commodity exposure.
Insight: Raw Materials Prices vs. FCX Stock Since 2020
Since 2020, FCX stock price has closely tracked Canada’s raw materials prices YoY, with correlation coefficients above 0.70. Periods of rising raw materials inflation, such as early 2025, saw FCX rally over 30%. Conversely, dips in raw materials prices corresponded with FCX corrections. This relationship underscores FCX’s sensitivity to metal price cycles and broader commodity market trends.
FAQ
- What is the significance of Canada’s Raw Materials Prices YoY data?
- This indicator measures inflation in key commodity inputs, influencing producer costs and consumer prices. It helps gauge inflationary pressures in the Canadian economy.
- How does the November 2025 reading compare historically?
- The 5.80% YoY increase is lower than the early 2025 peak of 11.80% and reflects a moderation trend after volatile swings throughout the year.
- What are the main risks affecting future raw materials prices?
- Risks include geopolitical tensions, global demand fluctuations, supply chain disruptions, and policy shifts impacting commodity markets.
Final Takeaway: Canada’s raw materials prices are moderating but remain a key inflation driver. Policymakers and investors should monitor global risks and structural shifts closely to navigate the evolving landscape.
FCX - Copper mining stock sensitive to metal price inflation.
CADUSD - Canadian dollar exchange rate influenced by commodity prices.
BTCUSD - Bitcoin price reacts to inflation and monetary policy.
XOM - Energy sector stock tracking oil price movements.
USDCAD - Forex pair inversely correlated with CADUSD, relevant for commodity exposure hedging.
The November 2025 raw materials prices YoY reading of 5.80% marks a decline from October’s 8.40% and sits below the 12-month average of approximately 5.90%. This signals a reversal from the sharp inflationary spikes seen in early 2025, notably February’s 11.80% peak and March’s 9.30%.
Month-over-month trends show a steady deceleration since the summer rebound, where prices climbed from negative territory (-3.60% in May) to positive growth. This pattern reflects easing demand and improved supply conditions.