China Producer Prices Change

China’s producer prices dropped by 2.5% yoy in March 2025, steeper than market expectations of a 2.3% drop and February’s 2.2% decrease. This was the fastest annual fall since last November, amid a seasonal downtrend in energy demand and ongoing trade row with the U.S. that fueled concerns over growing stocks of unsold exports, potentially pushing domestic prices even lower. The cost of production materials fell further (-2.8% vs -2.5% in February), with deeper drops in mining (-8.3% vs -6.3%), raw materials (-2.4% vs -1.5%), and processing (-2.6% vs -2.7%). Consumer goods prices also saw a sharper drop (-1.5% vs -1.2%), due to lower prices of clothing (-0.3% vs -0.2%), durable goods (-3.4% vs -2.5%), and food (-1.4% vs -1.6%), while prices for daily-use goods eased slightly (0.7% vs 0.9%). On a monthly basis, producer prices shrank 0.4%, the largest drop in six months, after a 0.1% dip in February. During Q1 of 2025, factory-gate prices fell by 2.3%, following a 2.2% decline in 2024.