China's factory prices continued to pick up in August amid booming demand and rising prices of bulk commodities, official data showed Thursday.
The producer price index (PPI), which measures costs for goods at the factory gate, went up 9.5 percent year on year in August, faster than the 9 percent year-on-year increase registered in July, the National Bureau of Statistics (NBS) said.
On a monthly basis, China's PPI rose 0.7 percent in August, up 0.2 percentage points from July.
The faster expansion of PPI last month was due to price rises in coal, steel and chemicals, said senior NBS statistician Dong Lijuan.
Among the major sectors, coal mining and washing, chemical raw materials and products manufacturing, and ferrous metal smelting and processing were the main contributors to the increase in PPI inflation in August, according to Dong.
"Despite the surge in PPI inflation, China is not faced with an overall inflation problem," Lu Ting, chief China economist with securities firm Nomura, said in a research note.
However, Lu cautioned against rising costs in downstream sectors, companies' squeezed margins and downward pressure on economic growth in the coming months.
Along with the PPI, NBS data also showed that China's consumer price index (CPI), a main gauge of inflation, rose 0.8 percent year on year in August.
The slower growth was partly driven by a drop in food prices, which declined 4.1 percent year on year last month. In particular, the price of pork, a staple meat in China, slumped 44.9 percent from a year earlier.
