CEPCI Annual Average Value Rises Precipitously from Last Year

The value of the 2021 Chemical Engineering Plant Cost Index (CEPCI), calculated as an average of the monthly values for the year, was higher than the annual value for 2020 by a large margin, as the CEPCI has risen each month since November 2020. The 2020 value, in turn, was actually lower than 2019, but the trend quickly reversed during the economic recovery that occurred last year, giving way to a much elevated annual CEPCI value for 2021.  The CEPCI is calculated based on a set of Producer Price Index (PPI) data from the U.S. Bureau of Labor Statistics (BLS; Washington, D.C.; www.bls.gov). While almost all PPIs that are incorporated into the CEPCI showed higher values throughout 2021, compared to 2020, to a large extent, the significant increase in the CEPCI during 2021 has to do with increasing prices for steel and other metallurgical products. Many of the PPI components that are related to metals have been on the rise since late 2020 and throughout 2021. For example, the PPI for steel mill products was 127.9% higher from December 2020 to December 2021 and 74.4% higher from February 2021 to February 2022, according to BLS data. Also, steel pipe and tubing was up 79.8% for 2021 and 71.8% between Feb. 2021 and Feb. 2022. Because…