CHINA PPI BREAKDOWN:

PPI y/y declined further, m/m narrowed

PPI -0.6% m/m, with a -0.8% input prices and producer prices for consumption goods dropped by 0.1%.
The weaker PPI numbers are influenced by insufficient market demand and falling prices for certain international commodities, NBS said.

MoM Performance

PPI decreased by 0.6%, with the decline narrowing by 0.1 percentage points compared to the previous month.

Producer goods prices fell by 0.8%, while consumer goods prices shifted from stability to a 0.1% drop.

Lower international oil prices led to a 3.2% drop in domestic oil and natural gas extraction prices. Meanwhile, prices in the non-ferrous metal smelting and rolling industry fell by 0.4%, with the decline narrowing by 1.9 percentage points.

The real estate sector remains in a period of adjustment, and weak demand for building materials, compounded by severe weather in some regions, led to a 0.8% drop in non-metallic mineral product prices.

Despite signs of steel demand recovery in the latter half of September, prices for ferrous metal smelting and rolling still dropped by 3.3%, though the decline narrowed by 1.1 percentage points compared to the previous month.

Coal production remained stable, with adequate reserves for winter, leading to a 1.3% decline in coal mining and washing prices.

In equipment manufacturing, lithium-ion battery prices fell by 0.3%, while new energy vehicle manufacturing prices dropped by 0.1%. In contrast, prices in power electronics manufacturing rose by 1.8%, and industrial robot manufacturing prices increased by 0.6%.

YoY Performance

PPI dropped by 2.8%, with the larger decline driven by a combination of MoM decreases and a high base from last year. The YoY drop widened by 1.0 percentage points. Producer goods prices fell by 3.3%, while consumer goods prices declined by 1.3%.

Out of the 40 major industrial sectors surveyed, ferrous metal smelting and rolling prices dropped by 11.1%, petroleum and natural gas extraction prices by 10.1%, petroleum, coal, and other fuel processing prices by 9.4%, and non-metallic mineral product prices by 5.1%. The prices in the agricultural and sideline food processing industry decreased by 4.9%, chemicals by 4.1%, electrical machinery and equipment by 3.1%, and coal mining by 2.6%. These eight industries together contributed to a 2.04 percentage point decrease in the PPI YoY, accounting for over 70% of the total decline.

However, prices in non-ferrous metal smelting and rolling increased by 5.9%, cultural, educational, and sports product manufacturing by 4.6%, and railway, shipbuilding, aerospace, and other transportation equipment manufacturing by 0.5%.