China's Factory Prices Rise 5.7% in October as Energy Costs Outpace Consumer Inflation

Energy drives the strongest factory price rise since June 2022

China's factory prices rose 5.7% in October 2026 from a year earlier, while the prices industrial companies paid for supplies climbed 7.9%, according to figures released by the National Bureau of Statistics on November 9. Coal mining prices surged 36.6%, and six industries linked to energy generated more than 80% of the monthly increase in producer prices.

Households faced a much smaller rise in their spending basket. Consumer inflation slowed to 0.7%, as cheaper vegetables, pork and fruit offset some of the increase in gasoline prices. The figures show an economy where energy and some industrial materials are becoming much more expensive, while many businesses selling finished goods face limited room to raise prices.

The producer price index, or PPI, measures the prices industrial producers receive when goods leave the factory. Its annual increase accelerated from 5.0% in September, exceeded economists' forecast of 5.3% and reached the highest rate since June 2022, when the index rose 6.1%.

October was the third consecutive month of accelerating annual producer inflation. Prices also rose from September, but that monthly increase slowed to 0.7% from 1.2%. Annual inflation therefore became stronger even as the latest monthly step became smaller.

What the two industrial price measures reveal

China's industrial purchase price index measures what producers pay for materials, fuel and other supplies. It rose 7.9% over the year and 1.1% over the month, outpacing the corresponding increases of 5.7% and 0.7% in the prices producers received.

The annual gap between those two measures was 2.2 percentage points. During January through October, purchase prices averaged 4.0% above the same period in 2025, compared with a 2.7% increase in producer selling prices, a gap of 1.3 percentage points.

For a manufacturer, faster growth in input costs can squeeze the money left after paying for production, especially when customers resist higher prices. Each industry's exposure depends on its materials, contracts and ability to change selling prices. The national indexes combine many businesses with different cost structures.

October's producer inflation was also well above the 2.7% average for the first ten months. The latest reading therefore shows stronger price pressure than the period average, with much of that pressure concentrated near the beginning of industrial supply chains.

Coal, oil and winter preparations explain most of the increase

Dong Lijuan, chief statistician in the National Bureau of Statistics' urban division, attributed the monthly rise mainly to higher international energy prices and seasonal demand as China prepared for winter heating.

Oil and natural gas extraction prices rose 6.0% from September, while coal mining and washing prices increased 2.7%. Higher basic energy costs then spread to industries that process fuels and chemicals. Refined petroleum manufacturing and organic chemical raw materials manufacturing each recorded monthly increases of 6.8%; coal processing rose 3.2%, and gas production and supply increased 1.5%.

Those six industries together added about 0.61 percentage points to the 0.7% monthly PPI increase. Using the published rounded figures, their contribution was roughly 87% of the total. Energy was therefore responsible for most of October's new industrial price pressure.

The annual changes were larger still. Coal mining and washing prices rose 36.6%, oil and gas extraction prices increased 35.0%, and petroleum, coal and other fuel processing prices climbed 29.9%. Chemical raw materials and chemical products manufacturing prices rose 16.4%, while gas production and supply prices increased 7.9%.

Elevated global oil prices amid the Middle East war added to the pressure. China's winter preparations created another source of demand for coal and gas at the same time, combining an international cost shock with a seasonal need for heating fuel.

Raw materials rise much faster than finished consumer goods

Production materials, the goods businesses use to make other products, rose 7.4% in price from a year earlier. They contributed about 5.77 percentage points to the headline PPI increase. Consumer goods leaving factories fell 0.1%, subtracting about 0.03 percentage points.

Within production materials, mining prices increased 27.9%, raw materials rose 11.6%, and processing prices increased 3.5%. The declining size of those increases along the production chain shows how unevenly the pressure was distributed: extraction industries recorded much larger gains than businesses further along in manufacturing.

Factory prices for food fell 1.6% over the year, clothing declined 1.3%, and general household goods fell 0.7%. Durable consumer goods, products intended to last, rose 1.4%. These are prices at the producer stage, while consumer inflation measures purchases made by households.

The monthly breakdown followed a similar pattern. Production materials rose 0.9%, contributing about 0.75 percentage points to PPI. Mining increased 2.8%, raw materials 2.0%, and processing 0.2%. Consumer goods fell 0.1%, with food unchanged, clothing down 0.2%, and general household goods and durable goods each down 0.1%.

Which industrial buyers faced the biggest increases?

Fuel and power purchase prices rose 18.6% from October 2025, the largest annual increase among the purchase categories listed. Chemical raw materials rose 16.8%, while nonferrous metal materials and wire increased 16.7%. Nonferrous metals are metals other than iron, including copper and aluminium.

Textile material purchase prices increased 5.3%, and agricultural and sideline products rose 0.5%. Building materials and nonmetallic minerals fell 1.9%, while ferrous metal materials, which include iron and steel materials, declined 1.1%.

Changes from September showed some easing outside energy and chemicals. Fuel and power rose 4.1%, and chemical raw materials increased 3.2%. Textile materials rose 0.6%, while building materials and nonmetallic minerals increased 0.4%.

Ferrous metal purchase prices fell 0.6% over the month. Nonferrous metal materials and wire, and agricultural and sideline products, each declined 0.3%. A business purchasing metals therefore faced a different immediate price trend from one buying large amounts of fuel.

Prices received by nonferrous metal smelters and processors were still 18.6% above a year earlier, while nonferrous ore mining prices rose 16.3%. Both annual increases eased from September, even as coal, oil and several chemical industries recorded faster annual inflation.

Technology and capacity changes create smaller pockets of strength

China's statistics bureau also pointed to adjustments in industrial capacity and demand associated with artificial intelligence. Nonmetallic mineral products prices rose 0.8% from September as supply and demand improved in parts of the industry.

Automobile manufacturing prices were unchanged after falling for three consecutive months. Electrical machinery and equipment prices, and computer, communications and other electronic equipment prices, each increased 0.1% over the month. Dong linked the latter increases to demand generated by artificial intelligence and industrial upgrading.

Over the year, electrical machinery and equipment prices rose 6.2%, while computer, communications and other electronic equipment prices increased 5.9%. Those gains were substantial, though far smaller than the increases in coal mining and oil extraction.

Nine major industries with rising prices contributed about 6.14 percentage points to annual PPI inflation. Their upward contribution increased by 0.64 percentage points from September. Five major industries pulling prices down subtracted about 0.60 percentage points, with their downward contribution shrinking by 0.06 percentage points.

Those five industries were beverages and refined tea, pharmaceuticals, nonmetallic mineral products, automobile manufacturing, and electricity and heat production and supply. Their annual price declines ranged from 1.6% to 5.2%, with each decline smaller than in September. October's acceleration therefore reflected both stronger increases in leading industries and less downward pressure from some weaker ones.

Why household inflation slowed despite expensive gasoline

China's consumer price index, or CPI, rose 0.7% from a year earlier, below the 0.8% economists expected and September's 0.9%. Consumer prices were unchanged over the month, following a 0.2% rise in September. Inflation averaged 0.9% during January through October.

Food prices fell 2.9% over the year, their weakest annual reading in 13 months. Fresh vegetables fell 16.9%, pork declined 8.6%, and fresh fruit dropped 3.8%. Those three categories together reduced annual consumer inflation by about 0.54 percentage points.

Gasoline moved sharply in the opposite direction. Its price rose 22.4% over the year, contributing about 0.63 percentage points to CPI. Energy prices increased 9.9%, accelerating from 7.3% in September. The household experience was therefore mixed: filling a vehicle cost much more, while several common groceries cost less.

Monthly food prices fell 1.0%. Suitable weather helped bring down prices for eggs, vegetables and fruit, while plentiful supplies contributed to lower pork and aquatic product prices. Gasoline prices rose 4.2% over the same month.

Core inflation, which excludes food and energy to give a steadier view of price changes, eased to 0.8% from 1.0% in September. It was the lowest reading in nine months, although still within the 0.8% to 1.2% range recorded during the year.

Household purchases show sharp differences beneath the average

Technology products stood out within the consumer figures. Data storage equipment prices rose 45.4% from a year earlier, tablet computers increased 29.3%, computers rose 23.0%, and mobile phones increased 16.7%. Together, those four categories added about 0.26 percentage points to annual CPI.

Industrial consumer goods excluding energy rose 1.2%, contributing about 0.30 percentage points. Services increased 0.7%, adding about 0.34 percentage points. Medical service prices rose 3.6%, while travel service prices increased 1.5%.

October's National Day holiday lifted some travel costs from September. Hotel accommodation rose 6.5%, airfares increased 3.3%, and travel agency charges rose 2.4%. Together, they added about 0.04 percentage points to monthly CPI.

Gold jewellery prices fell 5.9% over the month, although they remained 4.5% higher than a year earlier. These contrasting movements help explain why the unchanged monthly consumer index could coexist with noticeable increases in fuel and holiday travel expenses.

Strong exports and weak domestic demand pull in different directions

Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, linked the industrial price increase to strong external demand. China's economy grew faster than expected in the third quarter, supported by resilient exports despite weakness in household spending.

Zhang also pointed to property market uncertainty as a drag on consumer confidence and local government revenue. In his assessment, low consumer inflation reflected weak domestic demand and a limited policy response. He said:

The CPI inflation stayed at a low level which reflects that domestic demand remains weak. We have not seen significant policy stimulus so far. Export growth has been phenomenally strong, which may be the reason why China is not in a rush to launch new stimulus,

The five percentage point gap between annual producer inflation of 5.7% and consumer inflation of 0.7% captures the contrast between industrial and household prices. For businesses selling into a cautious domestic market, higher energy bills can be difficult to recover through higher selling prices.

Pang Ming, a member of the China Chief Economist Forum, expected further price recovery in particular industries rather than a uniform rise. He cited improving supply and demand, efforts to curb inefficient competition, and advanced manufacturing, while warning that commodity prices remained exposed to external demand, international energy prices and the global economy.

What comes next after October's split inflation readings?

Nguyen Hoang Nam, China economist at Capital Economics, expected the external energy shock to keep inflation elevated for several more months before weakening in 2027. He said:

We think the price shock from the Middle East conflict will keep inflation elevated over the coming months. But its impact should fade next year,

Nguyen forecast that producer prices would return to deflation, meaning prices would fall from a year earlier, and that consumer inflation would average 0.4% in 2027. The timing and extent of any easing in energy costs remain uncertain.

The next releases will help show whether export demand continues to support industry and whether price pressure spreads further through manufacturing. October trade figures were expected later in the week following the inflation release, while November inflation figures were due in early December.

• September 2026: Producer prices rose 5.0% over the year and 1.2% over the month; consumer inflation was 0.9%.
• October 2026: Producer inflation accelerated to 5.7%, while its monthly increase slowed to 0.7%; consumer inflation eased to 0.7%.
• November 9, 2026: The National Bureau of Statistics released October's inflation figures.
• Early December 2026: November inflation figures were due.

For factories, the immediate issue is the balance between rising supply costs and the prices customers will pay. For households, cheaper food is cushioning higher fuel costs, while purchases such as computers, phones and travel show that the low national average can hide substantial changes in particular expenses.

Key Points

• China's producer prices rose 5.7% in October, the fastest annual increase since June 2022.
• Industrial purchase prices rose 7.9%, faster than producer selling prices.
• Six energy industries contributed about 0.61 percentage points to the 0.7% monthly PPI increase.
• Consumer inflation slowed to 0.7%, with falling food prices offsetting part of the rise in gasoline costs.
• Core consumer inflation eased to 0.8%, its lowest reading in nine months.
• November inflation figures were due in early December.