China’s factory inflation surges to a 26-year high in October as coal prices increased amid a power crunch in the nation’s industrial zone.CSI 300 down -0.53%, CNY USD up +0.01%
- The producer price index (PPI) rose to 13.5% from a year earlier, faster than a 10.7% increase in September.
- Consumer price increases also quickened, even though at a slower rate than factory gate prices. The consumer price index (CPI) increased 1.5% on October YOY, compared with September’s 0.7% increase.
- The increasing price pressures disrupt deliberations for the People’s Bank of China that has now been wary of expanding monetary stimulus faster amid concerns about soaring inflation.
- Zhiwei Zhang, chief economist at Pinpoint Asset Management stated that they were concerned about the pass-through from producer prices to consumer prices.
- Consumer prices are likely to expand in the coming months as firms struggle with depleted inventories and are pressured to pass higher costs to the final consumers.