Analysts at Nomura note that China’s PPI inflation fell to 3.6% y-o-y in September, in line with market expectations (Nomura: 3.5%; Consensus: 3.6%), from 4.1% y-o-y in August (January-August: 4.0%; 2017: 6.3%).
Key Quotes
“The slowdown was largely due to a high base last year (PPI inflation was 0.6% m-o-m compared to 1.0% m-o-m in September 2017) as well as continued weakness in domestic demand.”
“PPI inflation in upstream sectors moderated broadly: in mining and the raw material sector it fell to 11.7% y-o-y and 7.3% in September, respectively, from 12.1% and 7.8% in August; in the processing sector it also softened to 2.9% y-o-y from 3.5%.”
“PPI inflation moderated visibly in non-metallic mineral products manufacturing, ferrous metal processing, chemical products manufacturing, and coal mining, which combined subtracted ~0.32pp from the year-on-year headline PPI inflation number – more than offsetting spikes in oil & natural gas extraction and fuel processing industries inflation.”
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