May PPI structure breakdown: manufacturing of chemical raw materials up 12.7% year-on-year; purchase prices of chemical raw materials up 11.8% year-on-year

Data shows that the national manufacturing producer ex-factory prices (PPI) rose by 3.9% year-on-year and 0.5% month-on-month; manufacturing producer purchase prices (IPI) rose by 5.8% year-on-year and 1.3% month-on-month, with price trends in the upstream and downstream chemical industries becoming a notable highlight of this month's data.

In terms of month-on-month dimension, affected by the transmission of international crude oil price fluctuations, price trends in the domestic petroleum and chemical upstream and downstream industries have significantly weakened.

Specifically, the month-on-month price of oil extraction shifted from a surge of 24.1% in April to a decline of 1.8%, and the manufacturing price of refined petroleum items fell slightly from a 19.0% increase last month to a 0.3% decline. while downstream chemical sub-sectors still maintained a price increase direction, the increases narrowed synchronously: the manufacturing of chemical raw materials and chemical items rose by 2.0% month-on-month, with the increase retreating by 6.3 percentage points from the previous month; the chemical fiber manufacturing sector rose by 1.5% month-on-month, with the increase retreating by 4.1 percentage points; the rubber and plastics sector also rose by 1.5% month-on-month, with the increase retreating slightly by 0.2 percentage points, as the price callback at the crude oil end was transmitted from top to bottom throughout the entire chemical sector chain.

On a year-on-year basis, the magnitude of price increases in the energy and chemical industries led all manufacturing sectors. Prices in the oil and natural gaseous extraction sector, petroleum, coal and other fuel processing sector, and chemical raw materials and chemical items manufacturing sector surged by 35.7%, 18.4%, and 12.7% respectively, contributing significantly to the rise in ex-factory prices.

Looking at enterprise production purchase costs, upward pressure on chemical-related raw material costs still exists.

Among manufacturing producer purchase prices in might, chemical raw materials rose by 11.8% year-on-year and 4.2% month-on-month, with the increase at a high level among major raw material categories; fuels and power, as the core energy to chemical production, rose by 10.0% year-on-year and 2.7% month-on-month; textile raw materials rose by 2.5% year-on-year and 1.0% month-on-month, with chemical raw material and energy costs jointly raising the procurement expenditures of mid- and downstream manufacturing companies.

In terms of cumulative data, averaging from January to might, the national manufacturing producer ex-factory prices rose by 1.0% compared to the same period last year, and manufacturing producer purchase prices rose by 1.6% year-on-year. The cumulative increase in purchase prices continued to be higher than ex-factory prices, indicating that processing and manufacturing sectors, including the chemical sector, still face certain cost squeeze pressures. sector analysis believes that changes in international crude oil prices are the core variable to immediate price fluctuations in the chemical sector chain, and subsequent changes in the price spread between raw materials and finished items might continue to affect the profit margins of chemical companies.