China’s producer prices rose at a faster pace in May, driven by higher commodity costs and stronger demand in selected industrial sectors, while consumer inflation remained moderate, according to data released by the National Bureau of Statistics of China.
China’s Producer Price Index (PPI), which measures prices of goods at the factory gate, increased 3.9% year-on-year in May, accelerating from April’s 2.8% growth and marking a 1.1 percentage-point increase from the previous month.
The stronger producer inflation was largely supported by rising prices in commodity-related industries.
Among the biggest gainers, prices in the mining and processing of non-ferrous metal ores surged 36.5% from a year earlier, while the smelting and rolling of non-ferrous metals industry recorded a 24% increase.
Other sectors registering notable price growth included petroleum and natural gas extraction, petroleum and coal processing, as well as chemical raw materials and chemical products manufacturing.
However, not all industries experienced price increases. The manufacturing of non-metallic mineral products, electricity and heat production and supply, as well as automobile manufacturing recorded price declines during the month.
On a month-on-month basis, producer prices rose 0.5% in May, moderating from the 1.7% increase recorded in April.
NBS statistician Dong Lijuan said the monthly increase reflected several factors, including the ongoing optimisation and upgrading of China’s industrial structure, seasonal demand improvements in certain industries, and fluctuations in international crude oil prices.
According to Dong, movements in global energy prices caused price growth in some sectors to slow, while others shifted from price increases to declines.
For the first five months of 2026, China’s PPI averaged a 1.0% year-on-year increase.
Meanwhile, consumer inflation remained relatively contained.
China’s Consumer Price Index (CPI), a key measure of inflation, rose 1.2% year-on-year in May, indicating steady price growth across the broader economy.
Core CPI, which excludes the more volatile food and energy categories, increased 1.1% from a year earlier.
The latest data suggests that while commodity and industrial input costs are rising, broader consumer inflation remains subdued, providing policymakers with flexibility as they balance economic growth objectives against inflationary pressures.
Economists will continue to monitor whether higher factory-gate prices eventually filter through to consumers in the coming months, particularly as commodity markets remain sensitive to global supply disruptions and energy price volatility.
