UPDATE 1-China’s factory gate inflation hits record high in September

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* September PPI highest since data was compiled in 1996

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* CPI 0.7% y/y in September versus +0.9% in a Businesshala poll, +0.8% in August (updated with details)

BEIJING, Oct 14 (Businesshala) – China’s annual factory gate prices rose at their sharpest pace on record in September, driven by energy restrictions and rising commodity prices that hit businesses already grappling with supply constraints. The pressure was on.

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The National Bureau of Statistics (NBS) said Thursday that the producer price index (PPI) rose 10.7% in September from a year earlier, the biggest increase since the data was compiled in 1996. Economists in a Businesshala poll had expected the PPI to rise 10.5 per cent after rising 9.5 per cent in August.

China’s growing electricity shortage, the country’s transition to clean energy, rising industrial demand and high commodity prices have led to a halt in production at many factories, including those supplied by large global brands such as Apple.

Power shortages have hit production in the cement, steel and aluminum industries, while utility companies have struggled to keep up with post-pandemic electricity demand.

Against this backdrop, Chinese energy and petrochemicals futures hit multi-year and record highs respectively on Monday, also driven by a rally in oil prices.

Thermal coal prices on the Zhengzhou Commodity Exchange rose 60% last month, and rose 8% to 1,408.20 yuan ($218.87) a tonne amid a coal shortage.

Beijing has taken a slew of measures to curb record-high coal prices and ease the country’s electricity shortage, urging coal miners to ramp up production and manage electricity demand at industrial plants.

Despite this, coal prices remain high, partly due to the closure of dozens of coal mines that have flooded China’s top coal-producing province, Shanxi.

NBS data also showed that China’s consumer price index (CPI) rose 0.7 percent on a year-on-year basis in September, lower than a Businesshala poll forecast of a 0.9% gain and a 0.8% increase in August. Is.

Prices of pork, a key component of China’s CPI, dropped 46.9% year-on-year.

Beijing has been buying pork earlier this year to support the country’s staple meat prices, which have hit farmers hard.

Core inflation, which separates volatile food and energy prices, rose to 1.2% in September after remaining flat in August.

Reporting by Liangping Gao, Stella Qiu and Ryan Wu; Editing by Ana Nicolasi da Costa

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