Core view
The price of means of production continues to rise, and the cost pressure of downstream industries continues to highlight. According to the price fixing index of means of production in China's circulation field compiled by Guoxin, the price of means of production in China has risen for five consecutive ten days from mid January to late February, and the cost pressure of downstream industries continues to highlight.
February PMI data also verified this point. In February, the purchase price index of main raw materials of PMI was 60.0%, 3.6 percentage points higher than that of the previous month, rising significantly for two consecutive months. According to the PMI data interpretation release of the National Bureau of statistics, the proportion of enterprises reflecting the problems of high raw material cost, high labor cost and tight capital in February was 60.2%, 36.3% and 32.0% respectively, an increase over the previous month.
Weekly economic growth tracking:
This week, Guoxin high-frequency macro diffusion index a remained positive, index B continued to rise slightly, the overall index value was slightly higher than the historical average, and China's economic recovery trend remained unchanged.
As of March 4, 2022, Guoxin high frequency macro diffusion index a was 0.1, index B recorded 110.1 and Index C recorded - 1.3% (- 0.5pct.). Among the seven sub items of the indicators, the operating rate of all steel tires, the operating rate of coking enterprises, the output of rebar and the price of cement increased compared with last week; PTA output, commercial housing transaction area in 30 large and medium-sized cities and the comprehensive index of building materials decreased compared with last week.
Weekly price high frequency tracking:
(1) food prices continued to fall this week, while non food prices continued to rise. In February 2022, food prices may still be lower than the seasonality, and non food prices may be significantly higher than the seasonality. It is estimated that in February, CPI food chain ratio was about 2.0%, CPI non food chain ratio was about 0.5%, and CPI overall chain ratio was about 0.8%. In February this year, CPI may rise to 1.1% year-on-year.
(2) in the middle and late January, the price of means of production in China's circulation field continued to rise, bringing a large positive month tail in February. In the first, middle and late February, the price of means of production in the circulation field continued to rise. It is expected that the PPI in February will rebound significantly to 0.9% month on month, and the PPI in February will be the same as that in the previous month or 9.1%.
Risk tip: policy adjustment lags behind and economic growth declines.
