China’s producer prices increased 3.9% year-on-year in May 2026, accelerating from a 2.8% rise in the previous month and matching market forecasts. It was the third consecutive monthly increase and the fastest pace since July 2022, driven by soaring global commodity and energy prices amid supply disruptions stemming from the war in Iran. Beijing’s efforts to cut excess industrial capacity and curb intense price competition also helped lift factory-gate prices. Production material costs accelerated (5.2% vs 3.8% in April), driven by stronger increases in mining (15.8% vs 10.8%), raw materials (9.2% vs 7.1%), and processing (2.3% vs 1.5%). A decline in consumer goods prices eased (-0.8% vs -1.0%), despite continued decreases in food prices (-1.8% vs -1.9%), clothing (-1.0% vs -1.1%), and daily-use goods (-1.0% vs -1.1%), while durable goods prices were unchanged (vs 0.3%). For the first five months of the year, PPI climbed 1.0%. Monthly, PPI rose 0.5%, easing from a 1.7% gain in April.

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