Data released by the National Bureau of Statistics on August 9 shows that in July 2026, China's national producer price index (PPI) for factory goods rose 3.5% year-on-year, but fell 0.7% month-on-month. The purchasing price index for industrial producers increased 5.5% compared to the same period last year, while dropping 1.0% from the previous month.

Looking at specific sectors, factory prices for the chemical raw materials and chemical products manufacturing industry surged 9.1% year-on-year in July, though they declined 2.6% from June. The petroleum, coal, and other fuel processing industry saw a year-on-year price increase of 8.2%, with a sequential fall of 6.0%. Procurement costs for chemical raw materials rose 9.3% from last year but decreased 2.6% month-on-month.

On a month-on-month basis, the national PPI fell 0.7%, a 0.4 percentage point larger decline than the previous month. Key characteristics of this monthly movement include: First, imported cost factors drove down prices in domestic related industries. Prices for oil extraction, refined petroleum product manufacturing, and organic chemical raw material manufacturing dropped by 11.8%, 8.4%, and 4.2%, respectively. In the non-ferrous metal mining and non-ferrous metal smelting and rolling processing industries, prices fell 2.1% and 1.7%. These five sectors together contributed approximately 0.65 percentage points to the overall 0.7% monthly PPI decline. Second, seasonal factors caused price drops in some industries. Hot weather, heavy rainfall, and typhoons in July slowed construction project progress, leading to price decreases of 0.8% and 0.5% in ferrous metal smelting and rolling processing and non-metallic mineral products, respectively. Increased generation from hydropower and wind power pushed their prices down by 10.3% and 3.9%. These four sectors contributed roughly 0.11 percentage points to the monthly decline. Third, industrial transformation, upgrading, and expanding quality consumption boosted demand and raised prices in some sectors. The growth of new drivers, such as artificial intelligence, high-end equipment, and new materials, led to price increases of 2.5% for intelligent unmanned aerial vehicle manufacturing, 0.4% for carbon new materials, and 0.3% for ship and related device manufacturing. Rapid growth in quality consumption pushed up prices for smart household consumer devices by 3.4% and skin care cosmetics manufacturing by 0.7%.

Year-on-year, the national PPI rose 3.5%, a 0.6 percentage point slowdown from the previous month. Among the major industries with price increases, the oil and natural gas extraction industry rose 3.2%, petroleum, coal, and other fuel processing increased 8.2%, and chemical raw materials and chemical products manufacturing climbed 9.1%. The non-ferrous metal mining and non-ferrous metal smelting and rolling processing industries saw rises of 22.6% and 20.2%, respectively, while ferrous metal smelting and rolling processing was up 2.7%. All these sectors saw their year-on-year growth rates narrow compared to the previous month. These six sectors collectively contributed approximately 2.55 percentage points to the PPI's year-on-year rise. In contrast, the coal mining and washing industry jumped 27.1%, electrical machinery and equipment manufacturing rose 5.7%, and computer, communication, and other electronic equipment manufacturing increased 4.4%, with all three sectors expanding their year-on-year growth rates. These three sectors contributed about 1.53 percentage points to the annual increase. The combined upward pull from these nine industries was 0.56 percentage points less than the previous month. The five industries with the largest negative impact on the PPI were electricity and heat production and supply, automobile manufacturing, non-metallic mineral products, pharmaceutical manufacturing, and beverage, liquor, and refined tea manufacturing, with price declines ranging from 2.3% to 5.7%. Together, they contributed approximately 0.76 percentage points to the annual PPI decline, a reduction of 0.05 percentage points from the previous month.

For the first seven months of the year on average, factory gate prices for industrial producers rose 1.8% year-on-year, while purchasing prices for industrial producers increased 2.8%. Within this period, factory prices for the chemical raw materials and chemical products manufacturing industry rose 4.6% year-on-year, the petroleum, coal, and other fuel processing industry saw a 3.8% increase, and procurement costs for chemical raw materials were up 3.6%.