China’s October factory gate prices beat forecasts

China’s factory gate prices surged at the fastest rate in 26 years in October. It exceeded economist’ projections, tightening profit margins for firms already grappling with rising coal prices and other commodity costs due to a power shortage.

According to the National Bureau of Statistics (NBS), the producer price index (PPI) jumped 13.5% from a year ago, higher than the previous month’s 10.7% increase.

It beat analysts’ forecast of a 12.4% rise, touching a reading last seen in July 1995.

Higher raw material costs and manufacturing output cuts fueled the increase. This came as the government limitations on carbon emissions and surging coal prices, a vital fuel for electricity generation, resulted in power rationing.

The power shortage has since alleviated slightly as a result of government intervention to stabilize the coal market.

Meanwhile, China’s consumer price index (CPI) tallied a 1.5% year-on-year growth in October from a 0.7% increase in September. It also exceeded a forecast of a 1.4% gain.