China's Producer Price Index (PPI) maintained its upward trajectory in May. Data released on June 10th shows that the PPI in May rose by 3.9% year-on-year, an increase of 1.1 percentage points from the previous month, while the month-on-month increase moderated.
An official from the National Bureau of Statistics highlighted that price increases in six key sectors contributed significantly to the annual PPI rise. These sectors include non-ferrous metal mining and processing, smelting and pressing of non-ferrous metals, coal mining and washing, electrical machinery and equipment manufacturing, computer, communication, and other electronic equipment manufacturing, and smelting and pressing of ferrous metals. Collectively, they accounted for approximately 2.56 percentage points of the year-on-year increase. Conversely, prices in sectors like non-metallic mineral products and the production and supply of power and heat declined compared to a year ago.
On a monthly basis, the PPI increased by 0.5% in May, a deceleration of 1.2 percentage points from the rate recorded in April.
The official attributed the sequential price gains in sectors like non-ferrous metals, electrical machinery, and computer-related industries to several factors, including accelerated electrification, the deep integration of artificial intelligence across various fields, and rising demand for computing power. For instance, prices for the smelting and pressing of non-ferrous metals rose by 1.1% month-on-month, with notable increases in tin smelting (4.8%) and copper smelting (3.1%). Similarly, prices in the computer, communication, and other electronic equipment manufacturing sector increased by 0.6%, driven by rises in integrated circuit packaging and testing (2.9%) and external storage devices and components (1.9%).
Additionally, influenced by fluctuations in international crude oil prices, the price of petroleum extraction shifted from a 24.1% increase in April to a 1.8% decrease in May. Similarly, the price of refined petroleum product manufacturing turned from a 19.0% increase to a 0.3% decline.
A senior research fellow noted that the momentum behind industrial price increases in China is currently diverging. Upstream sectors such as non-ferrous and ferrous metal processing continue to see stronger prices, supported by global commodity volatility and domestic manufacturing investment demand. In contrast, sectors like petroleum extraction and refining have transitioned from growth to decline due to a pullback in international oil prices. Meanwhile, prices in equipment manufacturing and computer communication sectors continue to rise, aligning with the expansion of demand within the artificial intelligence-related industrial chain.
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