ECONOMY

Analysis: China’s Factory Prices Return to Growth but Demand Lags

Published: Apr. 10, 2026 3:20 p.m. GMT+8

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Workers produce aluminum profiles on an automated line at a factory in Suichuan county, Jiangxi province. Photo: VCG

China’s factory-gate prices returned to growth in March for the first time in more than three years, driven by higher global commodity costs, but weak domestic demand may limit the broader impact.

The producer price index rose 0.5% year-on-year, ending a 41-month decline, official data showed Friday.

The rebound was led mainly by external factors. Higher oil and metals prices following the U.S.-Iran conflict pushed up input costs, particularly in energy-related sectors.

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Explore the story in 30 seconds

China’s PPI rose 0.5% YoY in March, ending 41-month decline.
Driven by higher global oil/metals prices from U.S.-Iran conflict and some domestic AI demand.
Weak domestic demand limits pass-through to consumers and sustainability.

AI generated, for reference only