# Heat pumps, air conditioning and refrigeration: Correlation Prices it moves with, and why Source page: https://www.materialinsights.org/energy/e_heat_pumps/correlation/ The index covers air conditioners, refrigeration and heating equipment. Prices follow copper and aluminium coils, steel cabinets, compressors and refrigerants, plus labour; demand rises with hot summers, building activity and policies that push heat pumps over gas boilers. Price index **US PPI: air-conditioning, refrigeration and forced-air heating equipment** index · monthly, Jan 2006 to Sep 2026 #### What its price moves with Selected link ##### Heat pumps, air conditioning and refrigeration and Copper Monthly changes -0.02 little or none correlation 12-month changes -0.06 little or none correlation Last 5 years -0.17 monthly changes Lead or lag +3 mo Copper tends to lead by 3 months (r 0.11) Price function, Jan 2006 to Sep 2026 Heat pumps, air conditioning and refrigeration ≈ 1.96 × (Copper)^0.52 R² 0.33 On this fit, a 10% higher copper price goes with a 5.1% higher heat pumps, air conditioning and refrigeration price over the long run. Units: index and $/mt. Chart: Heat pumps, air conditioning and refrigeration and Copper prices rebased to 100 at Jan 2006, log scale Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size. Chart: Heat pumps, air conditioning and refrigeration price against Copper price, monthly, log scales, with fitted line Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic. Commodity [Cu Copper](https://www.materialinsights.org/commodities/copper/)Coils and tubing −0.02 Refrigerant circuits and heat exchanger coils use copper tubing. The link barely shows in the data, with correlations close to zero, because equipment makers price on annual lists and use contracts and aluminium substitution to smooth copper swings. little or none co-movement month to month · 249 months Show charts Commodity [St Steel](https://www.materialinsights.org/commodities/steel/)Cabinets and parts 0.17 Outer cases, compressor shells and frames are steel. Yearly moves correlate at 0.34 with the steel index, a modest link, since steel is one of several inputs and price changes reach finished equipment slowly. little or none co-movement month to month · 249 months Show charts Chemical [HFC Fluorochemicals and refrigerants](https://www.materialinsights.org/chemicals/fluoro_intermediates/)Refrigerants 0.12 Most units are charged with fluorinated refrigerants, whose prices rise as rules phase down older gases. The proxy for fluorocarbon gases correlates at 0.12 monthly, with yearly moves more closely aligned, a weak to moderate cost link. little or none co-movement month to month · 207 months Show charts Energy [Blr Boilers, furnaces and stoves](https://www.materialinsights.org/energy/e_combustion_heat/)Competing heating 0.40 Heat pumps compete with gas and oil boilers and furnaces for heating. The two equipment indices correlate at 0.40 monthly and 0.91 yearly, but this is a common driver: both follow US manufacturing costs and building demand, not a substitution effect. moderate co-movement month to month · 249 months Show charts Energy [Bld Energy in buildings](https://www.materialinsights.org/energy/e_buildings/)Running cost 0.14 A heat pump's running cost is its electricity bill, so power prices shape how attractive it is against a boiler. Yearly moves correlate at 0.70 with the electricity proxy, largely shared US inflation rather than buyers reacting to tariffs. little or none co-movement month to month · 248 months Show charts Energy [Gas Natural gas](https://www.materialinsights.org/energy/natural_gas/)Competing fuel 0.08 The gas price sets what heat pumps save when they replace gas boilers, so dear gas, as in Europe after the recent supply crisis, boosts demand. Yearly moves correlate at 0.53 with European gas, while monthly moves hardly correlate, as equipment prices respond slowly. little or none co-movement month to month · 249 months Show charts How to read these numbers **Correlation of monthly changes** (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak. **12-month changes** compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs. **Price function** is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)^β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation. **Lead or lag** checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months. Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link. Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site. ## Other sections - [Summary](https://www.materialinsights.org/energy/e_heat_pumps/index.md) - [Overview](https://www.materialinsights.org/energy/e_heat_pumps/overview/index.md) - [Science and limits](https://www.materialinsights.org/energy/e_heat_pumps/science/index.md) - [Value chain](https://www.materialinsights.org/energy/e_heat_pumps/valuechain/index.md) - [Unit economics](https://www.materialinsights.org/energy/e_heat_pumps/economics/index.md) - [Engineering methods](https://www.materialinsights.org/energy/e_heat_pumps/methods/index.md) - [Equipment and suppliers](https://www.materialinsights.org/energy/e_heat_pumps/equipment/index.md) - [Relationships](https://www.materialinsights.org/energy/e_heat_pumps/links/index.md)