MNI BRIEF: China June CPI Hits Three Month Low

China's Consumer Price Index hit a three-month low in June, rising 0.2% y/y, slowing from May’s 0.3% and missing the 0.4% consensus, data from the National Bureau of Statistics showed Wednesday.

Food prices fell 2.1% y/y, reducing headline inflation by 0.39 pp, as the 18.1% increase in pork prices were offset by declines in vegetables, fruits, eggs, beef, mutton and poultry. Non-food prices rose 0.8%, contributing 0.64 pp to CPI growth. Inflation fell 0.2% m/m, compared with the previous 0.1% fall.

PPI declined 0.8% y/y for the 21st straight month, in line with market consensus and recovering from May's 1.4% decline, marking the narrowest fall since Jan 2023. PPI fell 0.2% m/m, reversing the previous 0.2% increase, mainly driven by falling international oil prices and weaker demand for steel, the NBS said.

Chinese steel rebar prices are likely to stage only a partial recovery in the second half as construction and infrastructure work declines, local analysts recently told MNI. (SEE: MNI: China H2 Steel Outlook Subdued)