China producer inflation hits four-year high as commodity pressures persist

Factory-gate prices surged for a fourth consecutive month in June, driven by raw material costs linked to Middle East disruptions and AI infrastructure spending.

By Handelsavisen Newsroom · Automated 2026-07-09 05:57 UTC · 1 min read

China’s producer price index (PPI) climbed to its highest level since July 2022 in June, marking a fourth straight month of acceleration.

The data underscores the persistent inflationary pressure on Chinese manufacturers, driven largely by elevated raw material costs.

2% gain in May. While consumer inflation remains modest, the divergence between stable consumer prices and surging factory-gate costs highlights a squeeze on industrial margins.

Consumer prices also ticked up, with the consumer price index (CPI) rising 1.0% year-on-year in June, compared to a 1.2% gain in May.

While consumer inflation remains modest, the divergence between stable consumer prices and surging factory-gate costs highlights a squeeze on industrial margins.

The acceleration in producer inflation is being fueled by a dual surge in input costs.

Disruptions stemming from the ongoing Middle East conflict have kept commodity prices elevated, while capital-intensive spending on artificial intelligence infrastructure has further strained supply chains for key materials.