NBS: China's May CPI gains 1.2%, PPI rises 3.9% YoY

The on-year growth in the country's CPI in May was mainly attributed to a low base in the same month last year, while the on-month retreat in the prices of energy and services caused the CPI to pull back slightly from April, commented Dong Lijuan, a senior statistician with the NBS.

For example, China's gasoline prices in May remained 23.5% higher on year, but they dipped 0.3% from April, NBS data showed.

Meanwhile, last month's food prices dropped 1.7% on year and 0.4% on month as plentiful seasonal vegetables and ample pork supplies weighed on prices.

Prices in the tourism sector declined from April as travel bookings retreated quickly after the country's May Day holiday, with car rental prices and airfares sliding 6.8% and 6.3% respectively on month.

China's core inflation, which excludes energy and food prices, nudged 0.1% lower on month but increased 1.1% on year, according to NBS data.

On the other hand, the country's PPI continued to gain upward momentum from the industrial structure optimization and rising seasonal demand, Dong noted.

For instance, manufacturing equipment upgrades gave a boost to domestic demand for steel products, pushing the steelmaking and fabrication prices to rise 1.2% on month and grow 1% on year in May. The prices for non-ferrous making and processing in China also increased 1.1% on month and jumped 24% on year, NBS data showed.

Meanwhile, domestic coal demand increased as part of efforts to maintain a stable supply of thermal power nationwide for peak summer consumption, according to Dong. China's prices for coal mining and processing in May went up 3.2% from April and rose by a large 10% compared with the same month last year.

During January-May, China's CPI and PPI both gained 1% on year, according to NBS statistics.

Written by Anthea Shi, shihui@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com