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China’s producer price ends decline streak in September

Updated: Oct 14,2016 5:18 PM     Xinhua

BEIJING — China’s producer price index (PPI), which measures costs for goods at the factory gate, ended a 54-month straight decline in September, official data showed on Oct 14.

The reading increased 0.1 percent year on year, the first positive reading since March 2012, according to the National Bureau of Statistics (NBS).

On a month-to-month basis, it increased 0.5 percent amid warming prices in more industries surveyed, with the number increasing by eight to reach 25, NBS senior statistician Yu Qiumei said.

Moreover, the turn is closely linked to higher price in some key industries including ferrous metals metallurgy and coal mining, Yu said in a statement.

Prices in the coal mining industry increased 4.1 percent year on year, going upward for the first time since July 2012, while the ferrous metals metallurgy and rolling industry saw price increase by 10.1 percent than previous year.

The positive reading is also attributable to the country’s capacity cut and destocking, which trimmed oversupply, and recovering commodity price of crude oil, iron ore and nonferrous metals in the global market, Yu said.

Factors including rising prices of coal and steel suggest the PPI will continue to rise in October with a possible 0.7 percent year on year increase, said Jiang Chao, strategy analyst at Haitong Securities.

China’s industrial growth, corporate profits and investment, especially private investment, were stabilizing and recovering, Premier Li Keqiang said on Oct 11.

The economy in the third quarter not only continued the growth momentum in the first half of this year, but also featured some positive changes, the Premier said, adding that China is fully capable of maintaining medium to high speed growth.

The PPI figures came along with the release of the consumer price index, which rose 1.9 percent year on year in September, and 0.7 percent on a monthly basis.

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