China's factory prices rise 5.7% while consumer prices rise 0.7%, a 5-point gap

China's factory-gate prices rose 5.7% in October from a year earlier, while consumer prices rose 0.7%, the National Bureau of Statistics said. The gap of 5.0 percentage points shows costs rising far faster at the start of the supply chain than at the checkout.

Mining and raw materials carried the producer index

The producer price index (PPI), which tracks what factories charge when they first sell a product, rose 0.7% from September and 5.7% from October 2025, the bureau said in releases dated 09:30 China Standard Time on Monday (01:30 UTC). In September the annual rate was 5.0% and the monthly rise 1.2%, according to the bureau's September release.

Prices of means of production, the goods factories use as inputs, were 7.4% higher than a year earlier. Within that group, mining prices rose 27.9%, raw-materials prices 11.6% and processing-industry prices 3.5%. On the month, mining prices rose 2.8% and raw-materials prices 2.0%.

The bureau's text names the sectors but does not give a reason for the moves.

Companies paid more for fuel, chemicals and metals

The separate index of purchase prices, what industrial companies pay for inputs, rose 7.9% from a year earlier and 1.1% from September. By category, fuel and power cost 18.6% more than a year earlier, chemical raw materials 16.8% more, and nonferrous metals and wire 16.7% more.

Averaged over January to October, producer prices were 2.7% above the same period of 2025 and purchase prices 4.0% above.

The bureau also noted that China began publishing price indexes on a 2025 base year in January. It estimated that the change moved monthly year-on-year PPI readings by about 0.08 percentage point on average.

Goods for households were still getting cheaper at the factory gate

Producer prices of consumer goods fell 0.1% from a year earlier. Food was down 1.6%, clothing 1.3% and daily necessities 0.7%, while durable consumer goods rose 1.4%.

Consumer prices: unchanged on the month, food still lower

The consumer price index (CPI) rose 0.7% from a year earlier, in cities and in the countryside alike, and was unchanged from September, the bureau said in its separate CPI release. The annual rate was 0.9% in September, so it eased by 0.2 percentage point.

Food prices fell 2.9% on the year and non-food prices rose 1.5%. Consumer goods rose 0.8% and services 0.7%. Fresh vegetables were 16.9% cheaper than a year earlier and pork 8.6% cheaper. Transport and communication prices rose 5.5%, health care 2.4% and other goods and services 1.8%. Over January to October, consumer prices averaged 0.9% above the same period of 2025.

We would watch whether input costs reach the shelf

We think October's figures describe a cost shock that has so far stayed upstream: producers and their suppliers face prices that are 5.7% and 7.9% higher, yet the bureau's own data show consumer-goods factory prices slightly lower and shop prices rising only 0.7%. Energy and raw-material shocks are supply-side problems, and they tend to squeeze company margins before they reach households.

The opportunity is that consumer inflation stays subdued while input costs level off, which would give China's central bank more room than the producer figure alone suggests. The threat is that margins give way and the cost pass-through begins. We expect, as a forecast and only if mining and fuel prices stay near current levels, that consumer-goods prices become the line to follow over the next six to twelve months. Our view would change if the factory prices of food and daily necessities start rising month after month.

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