China Producer Prices Drop the Most in Near 2 Years

China’s producer prices increased 3.9% year-on-year in May 2026, accelerating from a 2.8% rise in the previous month and matching market forecasts. It was the third consecutive monthly increase and the fastest pace since July 2022, driven by soaring global commodity and energy prices amid supply disruptions stemming from the war in Iran. Beijing’s efforts to cut excess industrial capacity and curb intense price competition also helped lift factory-gate prices. Production material costs accelerated (5.2% vs 3.8% in April), driven by stronger increases in mining (15.8% vs 10.8%), raw materials (9.2% vs 7.1%), and processing (2.3% vs 1.5%). A decline in consumer goods prices eased (-0.8% vs -1.0%), despite continued decreases in food prices (-1.8% vs -1.9%), clothing (-1.0% vs -1.1%), and daily-use goods (-1.0% vs -1.1%), while durable goods prices were unchanged (vs 0.3%). For the first five months of the year, PPI climbed 1.0%. Monthly, PPI rose 0.5%, easing from a 1.7% gain in April.

China’s producer prices rose 2.8% yoy in April 2026, picking up from a 0.5% gain in the prior month and beating market forecasts of 1.5%. It marked a second consecutive monthly gain and the fastest pace since July 2022, fueled by surging global commodity and energy prices amid supply disruptions from the war in Iran. Beijing’s efforts to cut excess industrial capacity and curb intense price competition also helped lift factory-gate prices. Production material costs quickened (3.8% vs 1.0% in March), led by steeper rises in mining (10.8% vs 2.0%), raw materials (7.1% vs 1.1%), and processing (1.5% vs 0.9%). A fall in consumer goods prices eased (-1.0% vs -1.3%), despite continued drops in food (-1.9% vs -1.7%), clothing (-1.1% vs -1.1%), daily-use goods (-1.1% vs -1.4%), and durable goods (-0.3% vs -1.0%). For the first four months of the year, producer prices rose 0.2%, reversing a 0.6% drop in January–March. Monthly, producer prices gained 1.7%, the fastest since October 2021.

China’s producer prices rose 0.5% year-on-year in March 2026, beating expectations of a 0.4% gain and reversing a 0.9% decline in February. This marked the first increase since September 2022, ending its longest deflationary streak in decades, mainly driven by a sharp rise in global commodity prices, particularly energy, alongside improved supply-demand conditions in certain domestic industries. Prices rebounded for production materials (1.0% vs -0.7% in February), particularly in intermediate goods (2.0% vs -5.3%) and raw materials (1.1% vs -1.9%), while processed goods rose at a faster pace (0.9% vs 0.3%). Consumer goods deflation also eased (-1.3% vs -1.6%), with softer declines in food (-1.7% vs -1.8%), daily-use items (-1.4% vs -1.8%), and durable goods (-1.0% vs -1.6%). Meanwhile, clothing costs continued to drop (-1.1% vs -1.0%). On a monthly basis, producer prices rose 1.0%, the strongest since 2022, following gains of 0.4% in each of the previous two months.