CHINA PPI BREAKDOWN:

PPI y/y and m/m declined further.
PPI -0.7% m/m, with a -0.6% input prices and producer prices for consumption goods remained at 0%.
The weaker PPI numbers are influenced by insufficient market demand and falling prices for certain international commodities, NBS said.

Month-on-Month Analysis:
PPI dropped by 0.7%, widening the decline by 0.5 percentage points compared to the previous month.

The prices of producer goods fell by 1.0%, with a 0.7 percentage point increase in the decline rate, while consumer goods prices remained unchanged for two consecutive months.

The main factor for the month-on-month PPI decrease was the price drop in high-energy-consuming industries. For instance, ferrous metal smelting and rolling decreased by 4.4%, non-ferrous metal smelting and rolling by 2.3%, petroleum, coal, and other fuel processing by 2.0%, and chemical raw materials and products manufacturing by 0.9%.

Some tech-intensive industries saw price increases, such as aircraft manufacturing (+2.1%), industrial robots (+0.8%), and computer manufacturing (+0.4%).

In consumer goods manufacturing, prices for cultural, educational, and sports goods, as well as food processing, slightly decreased by 0.2% and 0.1%, respectively, while textile and apparel prices remained stable.

Year-on-Year Analysis:
PPI decreased by 1.8%, expanding the decline by 1.0 percentage point.

Prices of producer goods fell by 2.0%, while consumer goods dropped by 1.1%.

Major industries contributing to the year-on-year PPI decline included ferrous metal smelting and rolling (-8.0%), non-metallic mineral products (-5.1%), food processing (-4.0%), oil and gas extraction (-3.3%), petroleum and coal processing (-3.0%), electrical machinery manufacturing (-3.0%), automotive manufacturing (-2.2%), and chemical products (-1.2%).

These sectors collectively contributed approximately 1.47 percentage points to the PPI's overall decline, which was 0.74 percentage points more than the previous month.

Conversely, some industries saw price increases, including non-ferrous metal smelting and rolling (+7.6%), cultural, educational, and sports goods manufacturing (+4.9%), chemical fiber manufacturing (+0.8%), and railway, shipbuilding, and aerospace manufacturing (+0.6%).

The carry-over effect on the PPI in August was around -0.1 percentage points (compared to 0.1 percentage points last month), while new price changes contributed -1.7 percentage points (compared to -0.9 percentage points last month).