China's factory-gate prices return to growth after 41-month decline

China’s producer price index (PPI) turned positive in March, ending 41 straight months of declines. The PPI rose 0.5% year on year, compared with a 0.9% fall in February, according to the National Bureau of Statistics (NBS).

The biggest gains were in non-ferrous metals. Prices in non-ferrous metal mining and dressing jumped 36.4% year on year, while non-ferrous metal smelting and rolling rose 22.4%. The NBS said gains widened from February. A rapid rise in global commodity prices and improving domestic supply-demand conditions drove the turnaround.

New growth drivers also played a role. The “AI Plus” initiative accelerated, and demand for computing power increased quickly, lifting prices in related sectors. Imported factors pushed up some domestic industries or narrowed their previous declines.

On a month-on-month basis, the PPI rose 1.0% in March, the sixth consecutive monthly increase and the fastest pace in 48 months. The rise was 0.6 percentage points stronger than in February.

Consumer inflation stayed mild. The consumer price index (CPI) rose 1.0% year on year in March, easing from 1.3% in February. Industrial consumer goods prices climbed 2.2%, contributing about 0.67 percentage points to the CPI’s annual increase. Gold jewelry prices surged 65.8% year on year, though the pace slowed by 10.8 percentage points, and gasoline prices rose 3.8%, adding roughly 0.11 points. Month on month, the CPI fell 0.7% because food and services prices dropped seasonally after the Spring Festival. Core CPI rose 1.1% year on year. Analysts said expanding domestic demand is key for a sustained price recovery, with consumption and investment expected to improve under the coming five-year plan.

China’s factory-gate prices broke a 41‑month slide in March, with the producer price index up 0.5% year on year after a 0.9% drop in February, according to the National Bureau of Statistics. The turnaround reflected both external and domestic forces.

Non-ferrous metals led the gains: prices in non-ferrous metal mining and dressing jumped 36.4% year on year, while non-ferrous metal smelting and rolling climbed 22.4%. The NBS noted that gains widened by 6.2 and 0.3 percentage points respectively from February. A rapid upswing in global commodity prices and improved supply-demand conditions at home lifted upstream prices.

New growth drivers are adding momentum. As the “AI Plus” initiative gathers pace, demand for computing power has accelerated, buoying related sectors. Imported factors also pushed up prices in connected industries or narrowed earlier declines, the NBS said.

On a month-on-month basis, the PPI rose 1.0% in March, the sixth consecutive increase and the fastest pace in 48 months, 0.6 percentage points stronger than February. This suggests upstream price pressures are firming.

Consumer inflation remained contained. The CPI rose 1.0% year on year in March, easing from 1.3% in February. Industrial consumer goods were up 2.2%, contributing about 0.67 percentage points to headline CPI. Within that, gold jewelry prices surged 65.8% year on year, though the pace of increase slowed by 10.8 percentage points, while gasoline rose 3.8%, contributing around 0.11 points. On a monthly basis, CPI fell 0.7% as food and services prices normalized after the Spring Festival. Core CPI increased 1.1% year on year versus 1.8% in February. Analysts argue that effectively expanding domestic demand is critical to sustain price recovery and growth. Sun Xuegong said favorable conditions remain, with the draft outline of the 15th Five‑Year Plan (2026–30) pointing direction and bolstering expectations, as new quality productive forces scale up, traditional industries undergo structural adjustment, services expand faster, consumption stays central to policy, and well‑prepared project pipelines support an investment rebound.