Event:
On March 9, the Bureau of statistics released the price data of February: CPI year-on-year 0.9%, market expectation 0.8% and previous value 0.9%; PPI was 8.8% year-on-year, market expectation was 8.7%, and the previous value was 9.1%.
Comments:
CPI exceeded expectations mainly due to non food contribution and food continuation drag; It may rise in the future, reach a high point within the year or exceed 3%
CPI slightly exceeded expectations, mainly due to the contribution of non food items and the continued drag of food items. In February, the CPI was 0.9% year-on-year, 0.8% higher than the market expectation, and the core CPI fell 0.1 percentage point year-on-year to 1.1%; CPI rose 0.2 percentage points month on month to 0.6%. Among the sub items, the food item was flat at 1.4% month on month, significantly lower than the average of 2.7% in previous years, mainly due to the abundant supply of pork and eggs and the low price; The month on month growth of non food items expanded by 0.2 percentage points to 0.4%. The fuel used for transportation was significantly driven, which was related to the rise in the prices of bulk commodities such as crude oil.
Energy and other costs remain high, which may further strengthen the dominance of cost side pressure. The cost pressure of raw materials in the early stage has continued to be obvious, some durable goods with relatively low demand price elasticity have increased significantly, and CPI sub items such as transportation fuel and household appliances have repeatedly reached new highs. Under the tight balance between coal supply and demand, industrial and commercial electricity prices have been raised successively in various regions, and the proportion of rising during peak hours in many regions has exceeded 50%; At the same time, with the liberalization of overseas epidemic prevention and control, the demand for crude oil increases and the supply elasticity is limited, or the oil price remains high, further pushing up the pressure on the cost side.
The price rise of upstream mining and other means of production supported the lower expectation of PPI, and some middle and downstream manufacturing industries increased prices one after another
PPI fell on schedule and the range was lower than the market expectation, mainly due to the rise in the price of means of production. In February, the year-on-year increase of PPI fell by 0.3 percentage points to 8.8%, higher than the 8.7% expected by the market, from negative to positive to 0.5% month on month and - 0.2% last month. Among the major categories, the means of production changed from negative to positive to 0.7% and - 0.2% in the previous month. The three sub items contributed the most, with a month on month change of 2.6 percentage points, and the raw materials and processing industry changed by 1.3 and 0.6 percentage points respectively; Means of living rose from flat to 0.1% month on month, mainly driven by food and general daily necessities.
By industry, the upstream crude oil chain, black chain and non-ferrous chain led the rise, and some middle and downstream manufacturing industries increased prices one after another. In the industry chain comparison, the growth of oil exploitation and oil processing increased by 7.8 and 4.6 percentage points to 10.4% and 5% respectively, the growth of black mining increased by 4 percentage points to 5%, black smelting increased from decline to 0.7%, and the growth of non-ferrous smelting and non-ferrous mining also increased significantly; Some middle and lower reaches of the manufacturing industry have raised prices, for example, food processing, pharmaceutical manufacturing, metal products, rubber products and other chain rose by more than 0.3 percentage points.
Reiterated view: CPI exceeded expectations periodically, which may be a potential risk during the year. In February, both the manufacturing price rise in the middle and lower reaches of PPI and the super seasonal recovery of vehicle fuel in CPI are the characteristics of the release of price rise pressure on the cost side. In the future, on the one hand, we need to pay attention to the price rise transmission of cost side pressure and the potential risk of "lard resonance" significantly exceeding expectations; On the other hand, once the consumption scenario is accelerated, it may lead to the improvement of consumption beyond expectations, and then accelerate the rise of end consumer prices. Under the neutral scenario, CPI may rise gradually, rise to more than 2.5% in the third quarter, and reach a high of nearly 3% in the year, or have some constraints on monetary policy.
Risk tip: the pig supply is accelerated and the demand repair is less than expected.
