China Producer Prices Change

China's producer prices fell by 2.2% yoy in February 2025, compared with market forecasts of a 2.1% decline and after a 2.3% drop in the prior two months. This marked the slowest drop since August 2024, as Beijing continued efforts to spur demand, despite producer deflation persisting for the 29th straight month amid price fluctuations in some commodities and the impact of the Lunar break in late January. Cost of production materials continued to fall (-2.5% vs -2.6% in January), with further drops in mining (-6.3% vs -4.9%), raw materials (-1.5% vs -1.9%), and processing (-2.7% vs -2.7%). Consumer goods prices remained weak (-1.2% vs -1.2%), weighed by more declines in food (-1.6% vs -1.4%), clothing (-0.2% vs -0.1%), and durable goods (-2.5% vs -2.6%), but prices for daily-use goods quickened (0.9% vs. 0.5%). Monthly, producer prices inched lower (-0.1% vs -0.2%). Considering the first two months of the year, factory-gate prices shrank 2.2%. In 2024, producer prices slipped 2.2%.