The National Bureau of Statistics (NBS) held a press conference on May 18th to present the performance of the national economy for April 2026. Data released shows that the national Producer Price Index (PPI) in April rose by 2.8% year-on-year, an increase of 2.3 percentage points from the previous month. On a month-on-month basis, PPI increased by 1.7%, marking the seventh consecutive monthly rise. For the January to April period, PPI recorded a cumulative year-on-year increase of 0.2%, the first time the index has turned positive since 2023.
Officials explained that the recovery in industrial product prices is the result of multiple factors, including external influences from fluctuations in international commodity prices and internal drivers from domestic structural upgrades, improved market competition order, and demand recovery in certain sectors.
Firstly, international transmission effects are becoming more evident. International crude oil prices continued to fluctuate in April, driving up prices in domestic petroleum-related industries. The price index for the extraction of petroleum and natural gas increased by 28.6% year-on-year. Prices for petroleum, coal, and other fuel processing rose by 14.2%, while prices for the manufacturing of chemical raw materials and chemical products increased by 8.9%.
Secondly, the driving effect of China's industrial structure optimization and upgrading is significant. The pace of high-end, intelligent, and green transformation in manufacturing is accelerating. The deep integration of artificial intelligence across various fields and the rapid growth in computing power demand are driving price recoveries in electronics, non-ferrous metals, and basic components. In April, the price index for optical fiber manufacturing surged by 115.9% year-on-year. Prices for manufacturing of special electronic materials, and for external memory devices and components rose by 20% and 22.4% respectively. The price index for the smelting and pressing of non-ferrous metals increased by 22.5%. Accelerated green and low-carbon transformation has boosted market demand in areas like energy conservation, environmental protection, and green materials, leading to year-on-year price increases of 6.8% and 2.8% for biomass fuel processing and comprehensive utilization of waste resources, respectively. The development of some emerging industries and equipment renewal in manufacturing have increased steel demand. Consequently, the year-on-year decline in the price index for the smelting and pressing of ferrous metals narrowed significantly compared to the previous month. The price recovery in these sectors reflects the growing supporting and leading role of new economic drivers. The growth of new momentum not only helps stimulate production expansion and demand growth in related fields but also provides positive support for product price recovery and improvement in corporate profits.
Thirdly, the domestic market operating environment and competition order are continuously improving. The in-depth advancement of building a unified national market, along with capacity governance and comprehensive rectification of "involution-style" competition in key industries, is showing sustained effects. Supply-demand relationships in some sectors are gradually improving, leading to a stabilization and recovery in related industry prices. For instance, in April, the price indices for the manufacturing of lithium-ion batteries and for photovoltaic equipment and components increased by 4.5% and 3.8% year-on-year respectively. The year-on-year decline in the price index for automobile manufacturing also narrowed compared to the previous month.
It should be noted that there is a certain time lag in the transmission of international oil prices to the domestic market. International oil prices experienced volatility in April, trending downward in the first and middle part of the month before rising again in the latter half. Taking WTI crude oil as an example, the futures settlement price peaked at $112.95 per barrel on April 7th, then generally declined to $83.85 per barrel by April 17th, before trending upward again to $106.88 per barrel by April 29th. The latest settlement price for May 15th shows WTI crude oil at $105.42 per barrel.
Officials stated that the recovery in industrial product prices plays a positive role in improving corporate profit expectations. However, it was also noted that this price recovery is currently uneven, with price increases for upstream production materials being relatively more pronounced. The potential impact on costs for midstream and downstream enterprises requires attention. Looking ahead, numerous external uncertainties and unpredictable factors remain. The future trajectory of international commodity prices is still uncertain, and its impact on domestic industrial product prices and corporate production and operations requires further observation and analysis.
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