China’s producer price index (PPI) fell -0.9% YoY but rose +0.4% MoM in February 2026, indicating narrowing factory-gate deflation alongside continued monthly price increases.

• Ex-factory prices of industrial producers declined -0.9% YoY in February, a 0.5 ppt smaller drop than the prior month, while increasing +0.4% MoM for the second consecutive month, indicating that annual deflation pressures eased while monthly price momentum remained positive.

• Producer purchase prices fell -0.7% YoY, narrowing the decline by 0.7 ppts from the previous month, and rose +0.7% MoM (+0.2 ppts from January), suggesting firmer short-term input cost dynamics despite continued annual declines.

• Within ex-factory prices YoY, means of production prices fell -0.7%, led by mining (-5.3%) and raw materials (-1.9%), while processing prices increased +0.3%, indicating divergence between upstream commodity sectors and downstream processing industries.

• Prices for means of living declined -1.6% YoY, including food (-1.8%), clothing (-1.0%), general daily necessities (-1.8%), and consumer durables (-1.6%), showing broad-based softness across consumer-related industrial goods.

• On a MoM basis, means of production prices increased +0.5%, including gains in mining (+1.2%), raw materials (+0.2%), and processing (+0.6%), while prices for means of living were flat (0.0% MoM) with mixed movements across categories.

• Among purchase prices YoY, fuel and power fell -8.4%, chemical raw materials dropped -5.0%, building materials declined -4.5%, and ferrous materials fell -3.1%, while non-ferrous metal materials and wires surged +21.3%, highlighting significant divergence in upstream input costs.

• On a MoM basis, purchase prices rose +0.7%, driven by increases in non-ferrous metal materials and wires (+4.8%), chemical raw materials (+1.0%), textile raw materials (+0.2%), and building materials (+0.1%), while fuel and power prices declined -1.2%.

• By major industries YoY, oil and gas extraction fell -12.9%, petroleum and coal processing declined -12.0%, and electricity and heat production dropped -5.5%, while non-ferrous metal mining rose +30.2% and non-ferrous smelting increased +22.1%, underscoring weakness in energy-related sectors alongside strong price gains in non-ferrous metals.