China’s producer price inflation cooled for the first time in seven months last month as iron ore and coal prices tumbled, pressured by fears that Chinese steel production is outweighing demand and threatening a glut of the metal later this year.
A renaissance in China’s steel industry has been a major driver of the world’s second-largest economy in the past few quarters, helping to generate the strongest profit growth in years and adding to a reflationary pulse being felt across the global manufacturing sector.
However, after cranking out as much metal as possible in recent months, Chinese steel mills are now starting to cut prices, threatening to snuff out a bull market that had pushed prices of some steel construction products to their highest since 2014.
China’s producer price index (PPI) last month rose 7.6 percent year-on-year, still at an elevated pace, but in line with analysts’ expectations and easing from a gain of 7.8 percent in February, which was a nine-year high, the Chinese National Bureau of Statistics said yesterday.
Economists polled by Reuters had forecast a softer reading as a torrid rally in China’s commodity markets showed signs of correcting and on expectations that measures to cool the country’s overheated housing market would eventually slow demand for steel and other building materials.
On a month-on-month basis, the PPI rose just 0.3 percent, the smallest increase since September last year and half the pace posted in February.
China’s consumer price inflation edged up to 0.9 percent year-on-year, slightly softer than expected and compared with 0.8 percent in February.
Analysts polled by Reuters had predicted last month’s consumer inflation would edge up to 1 percent, but remain well within the central bank’s comfort zone.
Still-modest consumer inflation and moderating producer prices would give policymakers room to continue with a gradual pace of monetary policy tightening as they try to contain risks from years of debt-fueled stimulus without crimping economic growth.
Consumer inflation picked up last month as costs for healthcare services, housing, transportation and communication surged, suggesting stronger demand from an increasingly wealthy and rapidly aging population and that stronger producer inflation in the past months might have started passing through to downstream consumers.
Food prices last month fell by 4.4 percent after a 4.3 percent drop in February.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
Nvidia Corp CEO Jensen Huang (黃仁勳) on Thursday met with US President Donald Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker, people familiar with the matter said. Details of what the two men discussed were not immediately available, and the people familiar with the meeting declined to elaborate on the agenda. Spokespeople for the White House had no immediate comment. Nvidia declined to comment. Nvidia’s CEO has been vocal about the need for US companies to access the world’s largest semiconductor market and is a frequent visitor to China.
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STABLE RESULTS: Despite June’s lower consolidated revenue, second-quarter sales still reached a record high, driven by demand for chips for AI applications Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales of NT$263.71 billion (US$9.02 billion) for last month, its second-lowest monthly result this year. The world’s largest contract chipmaker said in a statement that its revenue last month only fared better than the NT$260.01 billion posted in February. Last month’s figure rose 26.9 percent from a year earlier, but slumped 17.7 percent from May, the company said. However, second-quarter revenue reached NT$933.8 billion, a record high for a single quarter, company data showed. The figure represented growth of 11.26 percent from the first quarter and 38.6 percent from a year earlier. Previously, TSMC said that
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