China Producer Prices Change

China's producer prices fell by 2.3% yoy in January 2025, keeping the same pace as in the prior month while surpassing market estimates of a 2.1% decline. It was the 28th straight month of producer deflation despite remaining at its softest level since August amid continued efforts from Beijing to spur demand at the start of the year. Meantime, the Lunar celebration, which fell at the end of the month, contributed to seasonal price fluctuations. The cost of production materials remained in decreased (-2.6% vs. -2.6% in December), with continued drops in mining (-4.9% vs. -4.6%), raw materials (-1.9% vs. -2.2%), and processing (-2.7% vs. -2.7%). Consumer goods prices also fell (-1.2% vs. -1.4%), driven by more declines in food (-1.4% vs. -1.4%), clothing (-0.1% vs. -0.1%), and durable goods (-2.6% vs. -3.1%), while prices for daily-use goods rose further (0.5% vs. 0.6%). Monthly, producer prices dropped 0.2%, after a 0.1% fall in December. In 2024, factory-gate prices shrank by 2.2%.