Core Insights - The overall consumption market in China remained stable in September, with the Consumer Price Index (CPI) showing a slight increase of 0.1% month-on-month and a year-on-year decrease of 0.3% [2][5] - The core CPI, excluding food and energy, rose by 1.0% year-on-year, marking the fifth consecutive month of growth and reaching the highest level in nearly 19 months [5][6] - The Producer Price Index (PPI) remained flat month-on-month for two consecutive months, with a year-on-year decline of 2.3%, but the rate of decline narrowed by 0.6 percentage points compared to the previous month [2][6] CPI Analysis - The CPI's month-on-month increase of 0.1% in September ended the previous month's stagnation, driven by a 0.7% rise in food prices, which contributed approximately 0.13 percentage points to the CPI increase [4][5] - Seasonal price increases were observed in fresh vegetables, eggs, fresh fruits, lamb, and beef, with price increases ranging from 0.9% to 6.1% [4] - Conversely, pork and aquatic product prices decreased by 0.7% and 1.8%, respectively, due to sufficient market supply [4] PPI Analysis - The PPI's year-on-year decline of 2.3% reflects a clearer upward trend, with various industries experiencing price increases or reduced declines, contributing to the PPI's stability [6][7] - Key industries such as coal processing, coal mining, and black metal smelting saw price increases of 3.8%, 2.5%, and 0.2%, respectively, for two consecutive months [6] - Input factors, particularly the decline in international oil prices, exerted downward pressure on domestic oil-related industries, but the overall impact on the PPI was limited [7] Future Outlook - Predictions indicate that the decline in pork prices will continue to weigh on the CPI in October, but increased travel during the National Day holiday is expected to boost service prices [3] - The annual CPI is projected to stabilize around 0%, while the PPI is anticipated to fluctuate at low levels, with a potential for positive growth by 2026 [3]

Group 1 - The core viewpoint of the report indicates that the impact of anti-involution on PPI is changing, with a noted improvement in PPI trends despite ongoing challenges in consumer demand [2][8] - In September, the CPI year-on-year decreased by 0.3%, showing a slight recovery from August, but still fell short of market expectations [2][3] - The PPI year-on-year decreased by 2.3%, but the decline was less severe than in August, indicating a potential stabilization in the PPI trend [2][3] Group 2 - The report highlights that the CPI for food items dropped significantly, with a year-on-year decline of 4.4%, primarily due to oversupply issues in the pork market [5][7] - Core CPI continues to rise, driven significantly by gold prices, with gold jewelry and platinum jewelry prices increasing by 42.1% and 33.6% year-on-year, respectively [2][5] - The report notes that while the PPI for durable consumer goods showed a decline of 0.4% month-on-month, the PPI for daily consumer goods increased by 0.4 percentage points compared to August, indicating some improvement [4][5] Group 3 - The report suggests that the weak demand in the consumer market is limiting the transmission of PPI changes to downstream living goods prices [4][8] - The analysis of high-frequency data indicates some stabilization in prices for certain construction industry goods, which may alleviate downward pressure on PPI [6][8] - The report emphasizes that the ongoing anti-involution policies are still in effect, but their impact on prices is becoming less pronounced, with a need to consider international trade events in future PPI trends [8]

Report Title - Low inflation is gradually improving - Commentary on September CPI and PPI [1][5] Report Industry Investment Rating - Not provided Core Viewpoints - In September 2025, the overall price level stabilized. Core CPI continued to improve, supported by services and industrial consumer goods, while food and carry - over factors dragged down the overall CPI, with pork prices being the main drag. PPI was stable month - on - month, due to the obvious improvement in upstream industries and the low - base effect. The prices of upstream mining and raw material industries stabilized and rebounded first, while the prices of mid - and downstream industries were still under pressure. The sustainability of the rebound in industrial product prices still needs to be observed. In the fourth quarter, prices may continue to improve moderately, but the recovery strength is expected to be weak. It is expected that the bond market will perform better in Q4 than in Q3, and it is recommended to actively allocate 10 - year treasury bond active bonds when the yield is above 1.75% [2][8] Summary by Related Content Event Description - In September 2025, the domestic price level was generally stable. Core inflation continued to recover, and the performance of the upstream and mid - stream industries of PPI continued to diverge. CPI decreased by 0.3% year - on - year, but core CPI (excluding food and energy) increased by 1.0% year - on - year, with the increase expanding for the fifth consecutive month. PPI decreased by 2.3% year - on - year and remained flat month - on - month. Month - on - month, CPI rose 0.1% from being flat last month, and PPI remained flat for two consecutive months, both basically in line with seasonal levels [5] Event Review - **Core CPI Improvement**: In September, core CPI increased by 1.0% year - on - year, with the increase expanding for the fifth consecutive month, returning to the "1 era" for the first time in nearly 19 months. The support came from two aspects: strong resilience in service consumption, with service prices rising 0.6% year - on - year (medical services and household services rising 1.9% and 1.6% respectively); the price of industrial consumer goods recovered driven by policies such as "trade - in" and "anti - involution", with the price of industrial consumer goods excluding energy rising 1.8% year - on - year, and categories such as household appliances and communication tools rising significantly. The increase in international gold prices also drove up the price of gold jewelry by 42.1% year - on - year [8] - **CPI Drag Factors**: In September, CPI decreased by 0.3% year - on - year, with the decline narrowing by 0.1 pct compared to last month. Food prices decreased by 4.4% year - on - year, affecting CPI to decrease by about 0.83 pct. Low pork prices were the core drag, with a year - on - year decline of 17.0%. The year - on - year decline of fresh vegetables and eggs exceeded 13%, but there was improvement month - on - month. Month - on - month, food prices rose seasonally by 0.7%, but the sufficient supply of pork and aquatic products drove prices down by 0.7% and 1.8% respectively. The carry - over factor was about - 0.8 pct, which was also the main reason why CPI year - on - year did not turn positive [8] - **PPI Stabilization**: In September, PPI decreased by 2.3% year - on - year, with the decline narrowing by 0.6 pct, and remained flat month - on - month for two consecutive months. The improvement in production material prices was the core driver, with prices in industries such as coal processing, coal mining and washing, and ferrous metal smelting rising by 3.8%, 2.5%, and 0.2% respectively month - on - month, and having maintained growth for two consecutive months. However, the prices of consumer goods were still weak, with the price of durable consumer goods decreasing by 3.9% year - on - year, in contrast to the recovery of industrial products in CPI. Input factors dragged down the prices of petroleum - related industries [8] - **Industry Price Differentiation**: The prices of upstream mining and raw material industries stabilized and rebounded first, while the prices of mid - and downstream industries were still under pressure, indicating that the foundation for demand recovery was not solid, and the sustainability of the rebound in industrial product prices still needed to be observed. Mid - and downstream manufacturing industries showed weakness, with negative month - on - month growth in industries such as the automobile manufacturing, rubber and plastic products, and pharmaceutical manufacturing industries [8] - **Outlook**: The continuous recovery of core CPI and the pull of new price - increasing factors may indicate certain resilience in domestic demand. The focus in the future is whether the recovery of core inflation can continue and whether the improvement in upstream prices can be smoothly transmitted to the mid - and downstream, driving the overall price level to rise moderately. In the fourth quarter, prices may continue to improve moderately, supported by the weakening of the carry - over factor and the stabilization of some upstream prices driven by policies such as capacity governance, but the recovery strength is expected to be weak [8]

Core Insights - The overall price trend shows marginal improvement in September, with CPI year-on-year rising from -0.4% to -0.3%, while core CPI increased to 1% [2][12] - The GDP deflator index for Q3 is expected to improve from -1.2% to -0.9%, supporting nominal growth stabilization [2][9] - Core CPI's rise is primarily driven by core goods, which saw a significant year-on-year increase of 1.8% in September, the highest since 2021 [4][13] CPI Analysis - The CPI year-on-year decline of 0.3% is influenced by food prices, which worsened from -4.3% to -4.4%, while energy prices improved from -3.1% to -2.7% [19][22] - Core CPI rose to 1.0%, marking five consecutive months of increase, with core goods contributing significantly to this rise [19][20] - Key contributors to core CPI include household appliances (up 5.5%), gold jewelry (up 42.1%), and communication tools (up 1.5%) [19][20] PPI Analysis - PPI remained flat month-on-month after eight months of decline, with a year-on-year decrease narrowing from -2.9% to -2.3% [28][31] - The stabilization in PPI is attributed to improved supply-demand dynamics in certain sectors, particularly coal, steel, and photovoltaic industries [28][32] - Input factors have led to price declines in oil-related sectors, while midstream manufacturing sectors like computer communication and automotive manufacturing continue to show weakness [31][32] Implications and Insights - The consumer goods replacement policy has positively impacted retail consumption and price recovery, although recent funding for this policy is depleting [5][16] - Broader consumer price trends indicate that the CPI may not fully reflect the underlying strength in various sectors, suggesting ongoing economic recovery [5][16] - The recovery of rental prices is crucial for the mid-term upward adjustment of core CPI, given its significant weight in the index [6][16]

Group 1: CPI Analysis - September CPI year-on-year decreased by 0.3%, an improvement of 0.1 percentage points from the previous value of -0.4%[5] - Food prices fell by 4.4% year-on-year, contributing approximately 0.74 percentage points to the CPI decline[8] - Energy prices decreased by 2.7%, impacting CPI by about 0.20 percentage points[8] Group 2: Core CPI Insights - Core CPI increased by 1.0% year-on-year, marking a marginal improvement but still below expectations[9] - The low base effect from last year significantly influenced the core CPI rebound, as it dropped to 0.1% in September 2024[9] - The month-on-month core CPI growth was 0%, weaker than seasonal trends[9] Group 3: PPI Trends - September PPI year-on-year decreased by 2.3%, a smaller decline than the expected -2.4%[14] - The PPI's tailing factor improved from -0.7% to -0.1%, contributing to the reduced decline[14] - Upstream and midstream prices showed signs of improvement, with more downstream industries experiencing price increases[16] Group 4: Future Outlook and Risks - The PPI tailing factor is expected to drop to 0% in October, which may support a rebound in PPI[17] - Risks include potential underperformance of domestic policy effects, unexpected geopolitical changes, and weaker-than-expected domestic demand[22] - International oil prices are currently declining, posing a risk of input cost pressures[20]

1. Report Industry Investment Rating No information provided in the document. 2. Core Viewpoints of the Report - In the second half of 2025, the economic growth rate may not decline significantly, and structural issues such as prices are expected to improve trend - wise [6] - The allocation between stocks and bonds will continue to shift, with bond yields and the stock market expected to rise continuously [6] 3. Summary by Relevant Catalogs 3.1 Price Data Overview - On October 15, the National Bureau of Statistics released the price data for September 2025. In September, CPI rose 0.1% month - on - month and fell 0.3% year - on - year; core CPI was flat month - on - month and rose 1.0% year - on - year; PPI was flat month - on - month and fell 2.3% year - on - year [3] 3.2 Resident - end Price Analysis 3.2.1 CPI Analysis - CPI rose from flat to an increase month - on - month. Affected by the decline in service and energy prices, the month - on - month increase was slightly lower than the average of September in the past five years. Food and tobacco prices rose 0.5% month - on - month, and other seven major categories of prices showed four increases, one flat, and two decreases [4] - CPI decreased year - on - year, mainly due to the carry - over effect. Food prices decreased 4.4% year - on - year, and energy prices decreased 2.7% year - on - year, which were the main factors affecting the year - on - year decline of CPI [4] 3.2.2 Core CPI Analysis - Core CPI rose 1.0% year - on - year, with the increase expanding for the fifth consecutive month, and the increase returned to 1% for the first time since March 2024. The year - on - year increase in the prices of industrial consumer goods excluding energy continued to expand [4] 3.3 Industrial - end Price Analysis 3.3.1 PPI Analysis - PPI was flat month - on - month, and the year - on - year decline narrowed for two consecutive months. The year - on - year decline in production materials prices was 2.4%, and the year - on - year decline in living materials prices was 1.7% [5] - The supply - demand structure improvement led to a significant stabilization of prices in some industries, such as coal, photovoltaic, and lithium - battery industries [5] 3.4 Market Performance - The market was still insensitive to fundamental data. After the price data was released on October 15 at 9:30, in a low - interest - rate environment, the market was more concerned about the trends of the equity and commodity markets. The bond market trading might still be affected by the performance of the equity market and the implementation of regulations related to fund redemption fees. The intraday trend of long - term yields showed an "N" shape [5]

Group 1: Inflation Data Overview - In September, the CPI year-on-year improved from -0.4% to -0.3%, while the core CPI rose to 1%[2] - The PPI remained flat month-on-month, with a year-on-year decline narrowing from -2.9% to -2.3%[2] - The GDP deflator index is expected to improve from -1.2% to -0.9% in Q3, aiding nominal growth stabilization[2] Group 2: Core CPI Analysis - The core CPI has been rising monthly, reaching 1% in September, the first time since March of the previous year[3] - Core goods prices increased significantly, with a year-on-year rise of 1.8% in September, the highest since 2021[4] - The contribution to the core CPI increase from core goods, rent, and core services is estimated at 0.61, 0.05, and 0.11 percentage points respectively[4] Group 3: Price Trends and Influences - Household appliance prices surged from -3.4% to 5.5%, marking a record high since 2002, driven by consumption policies[4] - Gold jewelry prices increased by 42.1%, contributing approximately 0.2 percentage points to the core CPI[4] - The prices of medical services rose by 1.9%, reflecting ongoing reforms in the healthcare sector[21] Group 4: Risks and Future Outlook - The effectiveness of consumption policies is expected to continue influencing price trends, with potential fluctuations as funding phases out[5] - The recovery of rent prices is crucial for the mid-term upward adjustment of the core CPI[5] - Uncertainties regarding the implementation of unified market policies pose risks to the inflation outlook[5]

Index Performance - The Hang Seng Index (HSI) closed at 25,911, up 1.8% for the day and 29.2% year-to-date[2] - The Hang Seng China Enterprises Index (HSCEI) rose 1.9% to 9,251, with a year-to-date increase of 26.9%[2] - The MSCI China index increased by 1.9% to 87, reflecting a year-to-date growth of 33.8%[2] Commodity Price Performance - Gold prices reached $4,207 per ounce, up 1.6% for the day and 60.3% year-to-date[3] - Brent Crude oil remained stable at $62 per barrel, showing a year-to-date decline of 13.1%[3] - The Baltic Dry Index (BDI) stood at 2,144, unchanged for the day but up 115.0% year-to-date[3] US Economic Indicators - Initial jobless claims in the US were reported at 218,000, lower than the consensus of 230,000[4] - The Producer Price Index (PPI) for final demand showed a year-over-year increase of 2.6%[4] - New privately owned housing units started decreased by 8.5% month-over-month[4] China Economic Indicators - In September, new loans in China totaled RMB 1.29 trillion, down RMB 300 billion year-over-year[9] - The growth of outstanding social financing moderated to 8.7% in September, down from 9% in July[9] - Core CPI growth in China reached 1.0% in September, the highest in 19 months, despite a 0.3% decline in overall CPI[6][8]

Group 1 - The core viewpoint of the articles indicates that the Consumer Price Index (CPI) showed a slight increase in September, while the Producer Price Index (PPI) continued to decline, reflecting mixed trends in the economy [1][2][3] - In September, the CPI increased by 0.1% month-on-month, while the year-on-year CPI decreased by 0.3%, with the decline narrowing by 0.1 percentage points compared to the previous month [1] - The core CPI, excluding food and energy prices, rose by 1.0% year-on-year, marking the fifth consecutive month of growth and the first time in nearly 19 months that the growth rate returned to 1% [1][2] Group 2 - The decline in the CPI was primarily influenced by a drop in food prices, which fell by 4.4%, contributing significantly to the year-on-year decrease [1] - The PPI remained flat month-on-month for two consecutive months, with a year-on-year decline of 2.3%, but the rate of decline narrowed by 0.6 percentage points compared to the previous month [2][3] - Positive changes in various industries, such as coal processing and metal smelting, have led to a reduction in the downward pressure on the PPI, with specific industries showing improved price stability [3]

Report Investment Ratings - Aluminum: Consolidating with oscillations [1] - Alumina: Profit compression [1] - Cast aluminum alloy: Following the trend of electrolytic aluminum [1] Core Views - The report provides updated fundamental data for aluminum, alumina, and cast aluminum alloy, including prices, trading volumes, open interests, spreads, cost - profit situations, and inventory levels in both the futures and spot markets [1]. - It also presents macro - economic data such as China's September CPI, PPI, and new social financing, and analyzes their implications [3]. - The trend intensities for aluminum, alumina, and aluminum alloy are 0, - 1, and 0 respectively [3]. Summary by Related Catalogs Futures Market Electrolytic Aluminum - The closing price of the SHFE aluminum main contract was 20,910, with a night - session closing price of 20,885. The LME aluminum 3M closing price was 2,745 [1]. - Trading volume and open interest of the SHFE aluminum main contract decreased compared to previous periods. The LME aluminum 3M trading volume also showed changes [1]. - The LME canceled warrant ratio was 19.50%, and the LME aluminum cash - 3M spread was 6.66 [1]. - The spread between the near - month and the first - continuous contract was - 55, and the cost of the near - month long and first - continuous short inter - delivery spread arbitrage was 70.58 [1]. Alumina - The closing price of the SHFE alumina main contract was 2,797, with a night - session closing price of 2,780 [1]. - Trading volume and open interest of the SHFE alumina main contract had different trends compared to previous periods [1]. - The spread between the near - month and the first - continuous contract was 7, and the cost of the near - month long and first - continuous short inter - delivery spread arbitrage was 22.15 [1]. Aluminum Alloy - The closing price of the aluminum alloy main contract was 20,410, with a night - session closing price of 20,425 [1]. - Trading volume and open interest of the aluminum alloy main contract changed compared to previous periods [1]. - The spread between the near - month and the first - continuous contract was - 45, and the spot premium was 30 [1]. Spot Market Electrolytic Aluminum - The pre - baked anode market price, aluminum rod processing fees, and aluminum ingot scrap - refined spread showed different changes [1]. - Electrolytic aluminum enterprises' profit was 4,748.93, and the import profit and loss of aluminum spot and 3M had different values [1]. - The domestic social inventory of aluminum ingots was 64.20 million tons, and the LME aluminum ingot inventory was 49.90 million tons [1]. Alumina - The domestic average price of alumina was 2,974, and the alumina prices at Lianyungang in different units had different trends [1]. - Alumina enterprises in Shanxi had a loss of - 42, and the prices of imported bauxite from different regions changed slightly [1]. Aluminum Alloy - The theoretical profit of ADC12 was 180, and the price of Baotai ADC12 was 20,600 [1]. - The difference between Baotai ADC12 and A00 was - 320, and the total inventory of three regions was 49,125 [1]. Caustic Soda - The price of Shaanxi ion - exchange membrane liquid caustic soda (32% converted to 100%) was 2,830 [1]. Macroeconomic Data - In September, China's CPI year - on - year decline narrowed to 0.3%, core CPI returned to 1% for the first time in 19 months, and PPI year - on - year decline narrowed to 2.3% [3]. - China's new social financing in September was 3.53 trillion yuan, new RMB loans were 1.29 trillion yuan, and the M2 - M1 gap reached a new low of 1.2 percentage points [3].