July PPI data released: Petrochemical and chemical industries show month-on-month decline, year-on-year increase maintained.

On August 9, the National Bureau of Statistics released industrial producer price data for July 2026. The national industrial producer price index (PPI) rose by 3.5% year-on-year and fell by 0.7% month-on-month; industrial producer purchase prices rose by 5.5% year-on-year and fell by 1.0% month-on-month.

Influenced by the transmission of falling international commodity prices, prices in petrochemicals and basic chemical raw materials declined month-on-month, presenting a divergent pattern where the chemical industry still showed an upward trend year-on-year but experienced a phased decline month-on-month.

Looking at chemical-related industries, in July, the ex-factory prices of the chemical raw materials and chemical products manufacturing industry rose by 9.1% year-on-year and fell by 2.6% month-on-month; the ex-factory prices of the petroleum, coal, and other fuel processing industry rose by 8.2% year-on-year and fell significantly by 6.0% month-on-month. At the upstream raw material end, the purchase prices of chemical raw materials rose by 9.3% year-on-year and fell by 2.6% month-on-month, with upstream and downstream chemical products simultaneously experiencing a month-on-month correction.

Analyzing the logic of PPI month-on-year movements, imported pressure is the core factor dragging down prices in the petrochemical industry chain.

Data shows that prices for oil extraction, refined petroleum product manufacturing, and organic chemical raw material manufacturing fell by 11.8%, 8.4%, and 4.2% month-on-month, respectively. The weakening price linkage between upstream and downstream petrochemicals became a significant driver of the decline in industrial product prices this month. Combined with lower prices in non-ferrous metal related industries, these five major industries collectively pulled the PPI down by approximately 0.65 percentage points month-on-month.

Seasonal factors further increased the downward pressure on industrial product prices.

In July, high temperatures, rainfall, and typhoons disrupted construction schedules, leading to a decline in prices for ferrous metallurgy and building materials; increased output from hydropower and wind power drove energy prices lower. However, industrial upgrading and emerging demand provided support, revealing structural highlights in the market. Demand in the new materials sector continued to be released, with ex-factory prices of carbon new materials rising by 0.4% month-on-month; demand recovery in high-end manufacturing and smart consumption sectors supported prices of some fine chemicals and new materials-related products to maintain an upward trend.

In year-on-year terms, the PPI rose by 3.5%, with the increase narrowing by 0.6 percentage points from the previous month. Upstream and downstream chemical industries such as oil and natural gas extraction, petroleum and coal processing, and chemical raw material manufacturing remained the main sectors supporting the year-on-year rise in PPI. Among them, year-on-year increases for non-ferrous metal mining and dressing, and non-ferrous metal smelting remained as high as 22.6% and 20.2%, respectively, but year-on-year increases in most energy and chemical-related industries narrowed compared to the previous month.

Increases in coal mining, electrical machinery, and electronic manufacturing industries expanded somewhat, providing a counterbalance. Prices in the electric power and heat, automotive, and pharmaceutical manufacturing industries declined year-on-year, exerting a downward pull.

Cumulative data shows that for the January—July average, the national industrial producer ex-factory prices rose by 1.8% compared to the same period last year, and purchase prices rose by 2.8%. The cumulative performance of the chemical sector was steady, with ex-factory prices in the chemical raw materials and chemical products manufacturing industry rising by 4.6% year-on-year, ex-factory prices in the petroleum, coal, and other fuel processing industry rising by 3.8%, and purchase prices of chemical raw materials rising by 3.6% year-on-year.

Overall, in July, the domestic petrochemical and chemical industries were significantly impacted by fluctuations in international energy prices, facing short-term correction pressure. At the same time, emerging industries such as artificial intelligence, high-end equipment, and new materials continued to expand, providing medium-to-long-term support for demand in fine chemicals and new materials fields, highlighting the structural divergence in price trends within the chemical industry.