China’s producer prices rose the fastest in more than five years in November as prices of coal,steel and other building materials climbed, boosting industrial profits and giving firms more cash flow to pay off mountains of debt.
The producer price index (PPI) rose 3.3 % last month from a year earlier, a pace not seen since late 2011 and well above expectations, the National Bureau of Statistics (NBS) said on Friday.
On a monthly basis, producer prices rose 2.1 %.China’s consumer inflation rate also quickened to 2.3 %on-year, the highest since April, due to higher food prices.
Analysts polled by Reuters had expected a gain in producer prices of 2.2 %, up from 1.2 % in October, while consumer prices had been expected to pick up marginally to 2.2 % from 2.1 %.
A construction boom led by higher government spending and a blistering housing market rally have boosted prices for materials from steel and copper to glass and cement, with speculators adding fuel to a months-long rally in China’s commodity futures markets.