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China’s factory gate inflation hits record high in September By Reuters



© Reuters. FILE PHOTO: Copper rods are seen at Truong Phu cable manufacturing facility in northern Hai Duong province, exterior Hanoi, Vietnam, August 11, 2017. REUTERS/Kham/File Picture

BEIJING (Reuters) -China’s annual manufacturing facility gate costs grew at their quickest tempo on document in September, pushed by power curbs and hovering commodity costs, piling strain on companies already grappling with provide bottlenecks.

The producer worth index (PPI) rose 10.7% from a yr earlier in September, the Nationwide Bureau of Statistics (NBS) mentioned on Thursday, the most important rise for the reason that knowledge started to be compiled in 1996. Economists in a Reuters ballot had anticipated the PPI to rise 10.5% after a 9.5% enhance in August.

A widening energy scarcity in China, brought on by the nation’s transition to wash power, booming industrial demand and excessive commodity costs, have halted manufacturing at quite a few factories together with many supplying large world manufacturers reminiscent of Apple (NASDAQ:).

The ability crunch has hit output throughout the cement, metal,and aluminum industries, whereas utility corporations have struggled to maintain up with post-pandemic energy demand.

Towards this backdrop, Chinese language power and petrochemicals futures rose to multi-year and document highs respectively on Monday, additionally fuelled by an oil worth rally.

Thermal coal costs on the Zhengzhou Commodity Alternate gained 60% final month, and have been final up 8% at 1,408.20 yuan ($218.77) per tonne amid a coal scarcity.

Beijing has taken a raft of measures to curb record-high coal costs and ease the nation’s energy crunch, together with urging coal miners to spice up output and handle electrical energy demand at industrial vegetation.

Regardless of this, coal costs have remained elevated, partly as a result of shutdown of dozens of coal mines as floods hit China’s prime coal producing province of Shanxi.

NBS knowledge additionally confirmed China’s shopper worth index (CPI) rose 0.7% year-on-year in September, smaller than the 0.9% acquire forecast within the Reuters ballot and a 0.8% rise in August.

Pork costs, a key element of China’s CPI, dropped 46.9% year-on-year.

Beijing is shopping for up pork to assist costs of the nation’s staple meat after they plunged earlier this yr, resulting in heavy losses for farmers.

Core inflation, which strips out risky meals and power costs, reached 1.2% in September after being flat in August.

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