The dilemma of inflation in Chinese factories portends a global price surge

Factory inflation in China has accelerated to a 13-year high, adding pressure to global consumer prices that have risen due to the commodity boom prime, rising shipping costs and an uneven economic recovery from the pandemic.

The National Bureau of Statistics said on Thursday that China’s producer prices rose 9.5% in August from a year earlier, mainly due to rising commodity prices. prime.

US data in Releases next week are expected to show that consumer prices rose more than 5% for the third straight month in August as companies hiked the prices of goods and services, although the Federal Reserve says the pressure will be temporary.

In the United States, material shortages, shipping bottlenecks and hiring difficulties are likely to continue to put greater upward pressure on prices in the coming months. The importers there and in Europe were already facing historically high transport costs to move quantities record of goods they buy from China, and this faster factory inflation will drive their costs up just as they hoard goods for the holiday season.

Chinese exports to the US up to the end of August increased by a third compared to 2020, as increased US demand resulting from stimulus and recovery, combined with material costs prime higher and faster factory prices in China has increased the value of trade in goods. In addition, shipping costs have increased due to container shortages, port closures, the COVID-19 outbreak, and other factors, which have increased the cost of transporting goods from China to the United States or elsewhere.

The increase in the prices of materials prime was a major factor in factory inflation quest’year. And moves by the Chinese government to limit quick wins, such as increasing supplies and trying to reduce storage, have had little impact so far.

And Fitch Ratings this week raised its forecast for Chinese thermal coal import prices for both quest’year than for 2022, seeing demand increase faster than Chinese supply, especially as the government seeks to reduce pollution and carbon emissions.

The actual ban is likely too in course on Australian coal imports will affect prices in China.

Read More About: Business News

Leave a Reply