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Haitong Macro | Liang Zhonghua team
Authors of this report:
应镓娴 S0850521080001
梁中华 S0850520120001
· Summary ·
The CPI and PPI performance in September continued to be expected to be boosted. However, we believe that after "924", the inflection point of this round of policy has been confirmed, and the rise in policy expectations may also lead to the improvement of inflation expectations, but the inflection point of domestic demand may have to wait patiently, which will also affect the repair of prices.
Since September 24, a series of stable growth economic policies have increased significantly. First of all, domestic commodity prices have risen significantly since "924", especially the black industry chain, which may be able to support the next PPI performance. The continued recovery of prices, especially CPI, may have to wait for a steady improvement in domestic demand, which still requires patience. Because this round of economic cycle is different from the past, first, the policy will not be as flooded and stimulated as in the West; Second, the real estate cycle is different, in addition to housing prices, we should pay attention to the changes in valuation levels; Third, entity confidence and expectations still need to be boosted, which will also take time. Therefore, it is still necessary to continue to monitor the situation of follow-up policies and changes in economic fundamentals.
On October 13, 2024, the National Bureau of Statistics released price data for September 2024, with CPI rising 0.4% year-on-year and PPI falling 2.8% year-on-year, with the decline further expanding.
1
Core CPI continues to weaken
Food and non-food prices continue to diverge. The CPI was flat in September from the previous month, falling back to 0.4% year-on-year, with food prices remaining the main support, with the food CPI rising 3.3% year-on-year. At the same time, the core CPI fell back to 0.1% year-on-year, the lowest since March 2021.
In terms of food, the prices of fresh vegetables, eggs and fresh fruits rose by 4.3%, 2.5% and 2.1% respectively during the beginning of the school season and the Mid-Autumn Festival, but the increase was lower than that in August. Pork prices edged higher, rising 0.4% month-on-month. Judging from the high-frequency data, the pig price reached a maximum of 21.1 yuan/kg in mid-August, and since then, the pig price has entered a downward channel, or the main reason is that the phased centralized slaughter of the second breeding in the early stage has brought about a rise in supply. However, because the end of last year was the fastest stage of capacity reduction, we expect that the benchmark supply of live pigs may still be insufficient, which is expected to drive pig prices to rise again.
The non-food CPI continued to fall by 0.2% month-on-month, weaker than seasonal (0.25% on average in the same period over the past 10 years). In addition to gasoline prices falling by 2.9% month-on-month, the core CPI also fell by 0.1% month-on-month in September, driving the core CPI to 0.1% year-on-year, the lowest since March 2021. Among the important sub-items of core consumer prices, travel-related prices fell seasonally in September, and the rental CPI fell by 0.1% month-on-month, which was also weak in the same period in recent years. At the same time, consumer prices of durable goods rebounded month-on-month, but due to seasonal factors, the increase was not strong compared with the same period.
2
The year-on-year decline in PPI widened
In September, the PPI fell by 0.6% month-on-month and 2.8% year-on-year, which was significantly larger than that in August, but it was also related to the higher base in the same period last year. Insufficient domestic market demand, especially pressure on the real estate infrastructure chain, and fluctuations in international commodity prices are the main drags. The introduction of the "924" series of policies boosted expectations and drove domestic commodity prices to rise significantly, but this may not be reflected in the September PPI (according to the statistical system, the simple average of the two monthly 5-day and 20-day prices is taken as the monthly price of industrial products).
In terms of industries, the prices of non-ferrous mining and dressing and gas production and supply led the way in September, both at the level of 0.4%, and non-metallic mineral mining and dressing also rose slightly by 0.1%. The prices of black gold and the oil and gas industry chain were weak, and the decline in international oil prices drove the oil and gas exploitation prices down by 3.2%; Affected by the expectation of policy boost, steel demand showed signs of recovery in the second half of September, but black gold smelting and black gold mining still fell by 3.3% and 4.2% respectively in the whole month.
In midstream manufacturing, industry prices were mixed. The manufacturing price of lithium-ion batteries decreased by 0.3%, and the manufacturing price of new energy vehicles decreased by 0.1%; The manufacturing price of power electronic components rose by 1.8%, and the manufacturing price of industrial robots increased by 0.6%.
To sum up, the performance of CPI and PPI in September continued to be expected to be boosted. However, we believe that after "924", the inflection point of this round of policy has been confirmed, and the rise in policy expectations may also lead to the improvement of inflation expectations, but the inflection point of domestic demand may have to wait patiently, which will also affect the repair of prices.
Since September 24, a series of stable growth economic policies have increased significantly. First of all, domestic commodity prices have risen significantly since "924", especially the black industry chain, which may be able to support the next PPI performance. The continued recovery of prices, especially CPI, may have to wait for a steady improvement in domestic demand, which still requires patience. Because this round of economic cycle is different from the past, first, the policy will not be as flooded and stimulated as in the West; Second, the real estate cycle is different, in addition to housing prices, we should pay attention to the changes in valuation levels; Third, entity confidence and expectations still need to be boosted, which will also take time. Therefore, it is still necessary to continue to monitor the situation of follow-up policies and changes in economic fundamentals.
Risk Warning: Real Estate Trend; The policy was not as strong as expected.
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