Zhongjin: The year-on-year CPI is expected to rebound in February, but the extent of subsequent price improvements will still depend on the speed of domestic demand recovery.

Zhongjin pointed out that the year-on-year CPI in January fell from 0.8% to 0.2%, mainly affected by the shift of the Spring Festival, with food and services dragging down. The rise in gold prices and the release of new demand could not offset the drag from services, causing the core CPI to fall to 0.8% year-on-year. The month-on-month increase in PPI widened to 0.4%, while the year-on-year decline narrowed to -1.4%, mainly due to the rise in international non-ferrous metals prices, the internal inversion of the chemical industry and photovoltaics, and the demand driven by AI, but there is still great pressure on price increases for downstream products. Looking ahead, the year-on-year CPI in February is expected to rebound, but the extent of subsequent price improvements will depend on the speed of demand recovery.