China’s producer price inflation in June has not changed, earlier this year, bullish, high and volatile, the steel industry oversupply, the signs of economic weakness exacerbated the price outlook.
The National Commodity Price Index (PPI) rose 5.5% in June, the National Bureau of Statistics said Monday. This is consistent with the analyst’s forecast, unchanged from last month. As the economic activity since March is relatively cold, earlier hit, China’s past few weeks of futures prices, raw material prices rebounded some rebound.
National Bureau of Statistics said that China’s consumer prices in June rose 1.5% compared with the same period last year, in line with market expectations and bullish in May, food prices continue to decline, although the pace slowed.
Analysts worry that price pressures may fall for the rest of the year due to weak economic fundamentals.
Julian Evans-Pritchard of the Singapore Institute of Capital Economics wrote in a report: “The result is that price pressures in previous months seem to stabilize in June.
“Despite this, the slowdown in credit growth may put pressure on economic activity in the coming quarters, and we believe that food price volatility will continue and inflation will continue to decline, which will make hope that sustained inflation expectations may help Weakening the company ‘s debt burden disappointed.
Food prices were the largest component of the consumer price index, down 1.2 percent from the previous year, down 1.6 percent in May and 3.5 percent in April.
According to the State News Center chief economist Zhu Baoliang said Monday, China’s “Financial News” reported that “food prices may be due to the accumulation of grain reserves and seasonal factors, part of the People’s Bank of China.”
Inflation remains moderate despite a rebound in factory activity. China’s swimwear manufacturing industry expanded at the fastest pace in three months in June and was welcomed by strong production and new orders.
At the same time, as investors continue to focus on China’s steel industry capacity reduction and industrial upgrading, spot iron ore and construction steel prices have also increased.
“The government is trying to eliminate low-grade steel, the high profit margins, is to induce the factory to produce more steel, thus increasing the demand for iron ore,” said Zou Mingdong, Shanghai steel manager at COSCO Merchants Group.
“But the price increase did not change the fundamentals of oversupply and weak demand.”
China’s largest steel company Baoshan Iron and Steel Company in the long-term series of growth, the main cut in May and June the main steel products prices.
PPI fell 0.2% in June.
China’s current economic growth rate of about 6.5% this year, the inflation rate of 3%. Chinese Premier Li Keqiang said in his speech at the World Economic Forum that despite the challenges, China has the ability to achieve annual growth targets and control systemic risks.