China’s producer prices rose at a faster pace in May to the highest level since September 2008 as domestic demand steadily recovers.
Similarly, raw material prices also continue to rally, official data shows on Wednesday.
The National Bureau of Statistics, (NBS) said China’s Producer Price Index (PPI), which measures costs for goods at the factory gate went up nine per cent year on year last month, accelerating from the 6.8-per cent growth in April.
The carryover effect contributed three per centage points to the PPI growth, while new price increases contributed 6 per centage points.
Data from the NBS shows on monthly basis, the PPI gained 1.6 per cent, quickening by 0.7 percentage points from April.
China’s factory prices returned to positive growth in January, the first time since the novel Coronavirus outbreak, representing its fifth consecutive month of positive gains.
Dong Lijuan, NBS senior statistician, said that in May, the prices of international crude oil, iron ore and non-ferrous metals rose further, driving up the prices of industrial products in China.
The PPI for the country’s domestic oil and natural gas extraction sector grew 1.7 per cent month on month in May, up by 1.3 percentage points from the growth in April.
Furthermore, as factories started to add reserves of steam coal to meet the summer power peak, the demand for such products surged, pushing up the PPI of the coal mining and washing industries to jump 10.6 per cent month on month during the period.
According to NBS, the first five months, the PPI growth averaged 4.4 per cent year on year.
The PPI data came along with the release of the Consumer Price Index, a main gauge of inflation, which gained 1.3 per cent year on year in May.