The National Bureau of Statistics will release November price data at 9:30 on December 9.
For the growth rate of CPI in November, institutions predict that under multiple pressures such as the decline in pork and vegetable prices and the epidemic suppressed the repair of core CPI, the growth rate of CPI in November may decline significantly compared with in November. In terms of PPI, institutions believe that the overall price of industrial products in November is "combined"; in the context of the downward trend of global macroeconomic , international oil prices are likely to continue to decline, and the year-on-year decline in PPI may continue to expand.
CPI year-on-year growth rate may continue to slow down
CPI, many institutions predict that the prices of major consumer goods in November "fall more and rise less", pork prices fluctuated and fell, vegetable prices fell sharply, the epidemic suppressed the recovery of core CPI, and CPI may fall significantly year-on-year under multiple pressures.
Data from the National Bureau of Statistics showed that China's consumer price (CPI) rose 2.1% year-on-year in October.
Data source: National Bureau of Statistics
For the year-on-year growth rate of CPI in October, the predicted values of the Macro Research Department of Industrial Research, CICC Macro, and Zhejiang Securities Li Chao's macro team are 1.5%, 1.4% and 1.6% respectively.
In terms of pig price, CICC Macro said that in November, the supply of pigs turned from tight to loose while increasing the regulation and high prices boosted the enthusiasm of farmers to slaughter. The repeated epidemic has caused the demand for dining out and college procurement to decline. The pork price turned negative (-1.3%) month-on-month, narrowing from 82% to 41% year-on-year.
The supply and demand gap of pork narrowed. Li Chao, a macro team of Zhejiang Securities, said that on the demand side, the repeated epidemic has led to weak consumption. The hot weather since the beginning of winter is not conducive to the release of pork demand; on the supply side, the second fattening sows were successively slaughtered in the early stage. The National Development and Reform Commission conducted its seventh selling of reserves this year on November 4, and the pork supply and demand gap has narrowed since August. At the same time, the arrival volume of soybeans in November rebounded, soybean meal prices fell slightly, and the support for pig prices on the cost side weakened.
In terms of vegetable prices, Li Chao's macro team said that the recovery of vegetable supply is weak. In November, the average price of 28 key monitoring vegetables nationwide in the Ministry of Agriculture and Rural Affairs was about 4.3 yuan/kg, a year-on-year decrease of more than 20%, which has a significant drag on CPI. Although winter has entered November, the temperature in most parts of the country is higher than last year. In addition, the precipitation is relatively sufficient, vegetables are growing well, and vegetables such as green vegetables and cabbage are on the market seasonally well and the supply is sufficient. In terms of demand, the epidemic is frequent and circulating across the country, and vegetable consumption is generally lower than expected, demand is weak, and the supply and demand gap has further widened.
Industrial Research Macro Research Department stated that given that the absolute price is currently low and the temperature will further fall in December, subsequent vegetable prices are expected to stabilize. At the same time, affected by the overseas avian influenza superimposed by the slowdown in customs clearance, the introduction of breeding chickens faces continuous insufficient pressure, and the egg price was -1.1% month-on-month in November, but the absolute level of egg price is still the peak in the same period in the past five years.
Judging from the inflation trend, Zheng Houcheng, director of Yingda Securities Research Institute, told The Paper that the downward pressure on inflation in the next quarter is greater than the upward pressure. In terms of CPI, in the context of the base in the fourth quarter, the pork CPI fell year-on-year in November to December, the fuel CPI used for transportation fell year-on-year, and the core CPI was difficult to rise significantly in the same month, it is expected that the CPI in November will likely decline year-on-year compared with October, and it will be difficult to rise significantly in December.
According to Wande data, the average forecast of the year-on-year growth rate of CPI in January was 1.65%, down 0.45 percentage points from October, with a forecast range of 1.4% to 2.2%; of which 16 institutions predicted a year-on-year increase in CPI in November.
PPI year-on-year decline may continue to expand
PPI, many institutions believe that the overall price of industrial products in November is "combined with rises and falls"; in the context of the global macroeconomic downturn, international oil prices are likely to continue to decline, and the year-on-year decline in PPI may continue to expand.
Data from the National Bureau of Statistics showed that China's industrial producer ex-factory price (PPI) fell by 1.3% year-on-year in October.
Data source: National Bureau of Statistics
Zheng Houcheng said that the year-on-year growth rate of PPI in October entered the negative range for the first time since January 2021. It is expected that the reading of -1.3% in October is not the low point of PPI in the current cycle year-on-year. In the medium and short term, PPI will likely continue to decline in the same month.
For the year-on-year growth rate of PPI in October, the predicted values of the Macro Research Department of Industrial Research, CICC Macro, and Li Chao's macro teams of Zhejiang Securities were -1.8%, -1.3% and -1.5% respectively.
Industrial Research Macro Research Department stated that industrial product prices rose and fell in November, and there was no obvious trend feature in that month. After crude oil price rebounded slightly in October, it weakened slightly again driven by lower than expected production cuts in OPEC. The prices of black products are generally relatively stable. non-ferrous metals prices rebounded to a certain extent, and US inflation data was lower than expected, which may boost the prices of related metals.
CICC Macro also stated that domestic and foreign demand hinders the performance of energy prices, crude oil prices declined, LME announced that it would not impose a ban on Russian metals, Black Sea grain export agreement renewed, non-ferrous metal prices rose first and then fell, and grain prices fell, but favorable policies such as 20 domestic epidemic prevention optimization and 16 real estate support to boost market confidence and support ferrous metal prices to increase significantly.
Depending on the oil price specifically, as of November 28, WTI crude oil futures have fallen below $75, a drop of more than 10%.
Li Chao's macro team said that signs of global recession significantly affected oil prices. In November, the Federal Reserve raised interest rates by 375 basis points, and monetary conditions further tightened. In November, the initial value of the ISM manufacturing PMI in the United States recorded 47.6%, falling into the contraction range for the first time after the epidemic. The PMI in Japan and Europe also fell below the boom and bust line . At the same time, the Drugepa oil pipeline from Russia to Hungary was temporarily suspended and restarted, and supply uncertainty decreased.
In terms of coal prices, Li Chao's macro team said that the tight supply and demand situation eased, and coal prices accelerated their decline. In terms of supply, coal inventory in ports such as Qinhuangdao Port in November rebounded, and combined with the recovery of transportation capacity of the Daqin Line, the situation of tight supply in November eased. In terms of demand, due to the high temperatures in most parts of the country in November compared with the usual year-on-year, the epidemic disturbance factors have strengthened, and the recovery of real estate, infrastructure and other factors have a certain delay. The coal demand in the non-electric industry performed weakly, resulting in a decline in overall coal demand. The tight supply and demand situation eased to a certain extent, driving a significant decline in coal prices.
From the perspective of inflation trend, Zheng Houcheng said that in the context of the global macroeconomic downturn, international oil prices are likely to continue to decline. In addition, considering the sharp rise in the same period in 2022, it indicates that the PPI in the first half of 2023 is likely to continue to be in the negative range of the month, and is likely to continue to decline. Affected by this, the core CPI in the first half of 2023 will most likely be at a low level for the same month, and the fuel CPI for transportation vehicles will most likely be under pressure and downward in the same month, which means that the CPI in the first half of 2023 will most likely be at a low level for the same month.
According to Wande data, the average forecast of the year-on-year growth rate of PPI in November was -1.47%, which was 0.17 percentage points lower than October, with a forecast range of -2.8% to -1%; of which 12 institutions predicted the year-on-year decline in PPI in November, and the forecast decline was unchanged.
