China's Factory Inflation Cools Again as Commodity Prices Ease

China’s producer price gains moderated following further easing in commodity prices, signaling weaker overall inflation pressure in the pipeline.

Resurgent factory inflation since last year has moderated, in step with the faltering global commodity rally. Regulatory efforts to contain financial leverage may also weigh on property and infrastructure investment in the second half of the year, denting a crucial pillar for raw material demand. Global commodities sank to one-year low this week, which may further erode raw material prices for Chinese producers.