China Producer Inflation Highest in Over 4 Years

China’s producer prices rose 5.7% year-on-year in October 2026, accelerating from 5.0% in the previous month and exceeding market expectations of 5.3%. It marked the fastest increase since June 2022, reflecting stronger commodity prices and improving industrial demand in the post-Golden Week period. Prices of production materials quickened further (7.4% vs 6.5% in September), driven by faster increases in mining (27.9% vs 25.4%), raw materials (11.6% vs 9.4%), and processing (3.5% vs 3.4%). Meanwhile, consumer goods prices remained subdued (-0.1% vs -0.1%), as declines in food (-1.6% vs -1.8%), clothing (-1.3% vs -1.2%), and daily-use goods (-0.7% vs -0.6%) offset slower growth in durable goods prices (1.4% vs 1.6%). On a monthly basis, the PPI rose 0.7%, easing from September’s 1.2% increase, the strongest in five months. In the first ten months of 2026, producer prices climbed 2.7%, accelerating from 2.3% in the preceding period.

China’s annual producer price inflation accelerated to 5.0% in September 2026 from 3.8% in August, exceeding expectations of a 4.5% increase. This marked the strongest reading since June 2022, as higher fuel prices drove up business costs. Prices of production materials accelerated to 6.5% from 5.0%, driven by faster increases in mining (25.4% vs 17.8%), raw materials (9.4% vs 6.7%) and processing (3.4% vs 3.1%). Meanwhile, consumer goods prices fell 0.1%, easing from a 0.5% decline in August, as food prices fell 1.8%, clothing dropped 1.2% and daily-use goods decreased 0.6%, while durable goods prices rose 1.6%. Among major industries, prices increased sharply in coal mining (35.3%), oil and gas extraction (24.5%) and non-ferrous metal smelting (21.4%). On a monthly basis, the PPI rose 1.2%, its biggest increase since April, accelerating from August’s 0.4% gain. In the first nine months of the year, producer prices increased 2.3% compared to the same period last year.

China’s producer inflation accelerated to 3.8% yoy in August 2026, up from July’s three-month low of 3.5% and surpassing market estimates of 3.7%, as energy prices continued to rise amid global oil shocks related to disruptions in the Strait of Hormuz. Prices of production materials inflation accelerated (5.0% vs 4.8% in July), supported by faster increases in the cost of mining (17.8% vs 16.4%) and raw materials (6.7% vs 6.1%), while processing increased at the same pace (3.1%). Meanwhile, consumer goods prices fell at a softer pace (-0.5% vs -0.8%), as prices fell further for food (-2.3% vs -2.1%), clothing (-1.2% vs -1.1%), and daily-use goods (-0.8% vs -1.0%), while durable goods prices picked up (1.2% vs 0.4%). On a monthly basis, producer prices rose 0.4%, recovering from a 0.7% drop in July. In the first eight months of the year, producer prices rose 2.0%, faster than the 1.8% gain in the previous period.