China's June PPI Falls Month-on-Month After Eight Months of Gains, NBS Says

China's Producer Price Index (PPI) turned negative month-on-month in June after eight consecutive months of gains, primarily due to the pass-through effect of falling international crude oil prices, according to Wang Guanhua, spokesperson for China's National Bureau of Statistics (NBS), at a press conference on Wednesday. Wang said the average international crude oil price dropped 18.6% month-on-month in June, based on World Bank data, which significantly weakened domestic prices in the petroleum and chemical sectors. He added that PPI is expected to maintain stable operation in the second half of the year, supported by rising demand for computing power from AI integration and improved market competition order. Looking ahead, Wen Bin, chief economist at China Minsheng Bank, told Jiemian News that PPI is expected to peak around mid-year and then gradually decline, with the full-year increase remaining around 1.0%. Wen noted that accelerated special bond issuance and policy financial instruments are boosting infrastructure investment, underpinning prices for steel, cement, and non-ferrous metals, while high-tech sectors like AI computing infrastructure and new energy installations support prices for electronic components and specialized equipment. Separately, Zhang Di, macro analyst at China Galaxy Securities, told Jiemian News that three key factors will influence PPI trends: geopolitical tensions between the U.S. and Iran affecting oil prices, the El Niño phenomenon's impact on commodity prices and coal demand, and domestic policy support for internal demand, with the July Politburo meeting potentially accelerating the implementation of existing policy tools.