OPEC Monthly Oil Market Report – November 2017
rose 1.5% y-o-y in September, down from 1.7% in the previous month, according to
National Bureau of Statistics
(NBS). The headline decline was largely due to faster deflation in food
prices, which contracted 1.4% y-o-y in September, compared with the 0.2% contraction a month earlier.
Services prices increased 3.3% y-o-y, up 0.2 pp from the previous month, as a result of rising inflation in
healthcare and residence. The rising base effect was the main driver of the y-o-y decline, as the m-o-m CPI,
at 0.5%, was the highest since October 2016, driven by rising oil prices.
producer price index
(PPI) improved to 6.9% y-o-y in September, compared with 6.4% a month
earlier. Rising inflation in raw materials and the heavy manufacturing sector was the main contributor to the
headline improvement, with faster growth reported in the ferrous-metals smelting, non-ferrous metals
smelting, and chemical materials and products sectors. Meanwhile, m-o-m inflation in several sectors – such
as coal, ferrous metals and non-ferrous metals, petroleum, paper, and chemical sectors – suffered as the
environmental production policy continued to expand. Inflation in consumer goods manufacturing remained
stable, reflecting relatively weak domestic demand.
Graph 3 - 27: China’s CPI and PPI
Graph 3 - 28: China’s trade balance
expanded 8.1% in September in US dollar terms, up 3 pp from the previous
month, according to the General Administration of Customs. The improvement was driven by a faster
expansion of exports to the US, the European Union, and ASEAN, while exports to Hong Kong contracted at
a faster rate. Exports of mechanical and electrical products and hi-tech products continued to lead the
headline recovery, reflecting the boost from the surge in demand for global electronics and robust economic
growth in advanced economies.
, measured in US dollars, expanded by 18.7% in September, accelerating from 13.5%
in the previous month. This is the fastest monthly expansion since March, and is the result of improving
domestic demand and rising commodity prices. In September, the volume of crude oil and iron ore imports
expanded by 10.6% and 11.9%, respectively, compared with an increase of 30.2% and 29.4% in import
declined to a six-month low. As imports grew at a much stronger pace than exports,
China’s trade surplus in September dropped to $28.6 billion, the lowest level since March, and marking the
second consecutive month of decline. The moderation in export growth may be slower than the moderation
in import growth, as a result of relatively stable global economic growth; this will support the recovery in the
trade surplus and the foreign exchange reserve in 4Q17.
rose 6.6% y-o-y in September, following a 6.0% gain in the previous month
and beating market expectations of 6.2%. It was the steepest increase in industrial production since June, as
output grew further for both manufacturing – by 8.1% from 6.9% in August – and for electricity, gas and water
production – by 7.8 % from 8.7 %. On the other hand, mining production continued to decline by -3.8 % from
-3.4 % a month earlier.
Official interest rate
Sources: China Index Academy, China National Bureau of
Statistics, Soufan and Haver Analytics.
% change y-o-y
Sources: China Customs and Haver Analytics.