Core Viewpoint - The Producer Price Index (PPI) may turn positive in some months of the second quarter due to low base effects and sustained demand in AI-related industries, but its sustainability depends on whether real estate investment stabilizes [1][12]. Group 1: Price Data Overview - In January 2026, the Consumer Price Index (CPI) decreased by 0.6 percentage points year-on-year to 0.2%, while the PPI increased by 0.5 percentage points to -1.4% due to input inflation [2]. - The impact of the price data revision is minimal, with the average effect on CPI and PPI year-on-year indices being approximately 0.06 and 0.08 percentage points, respectively [3]. - The weight distribution of CPI categories remains largely unchanged, with food, clothing, housing, and other categories maintaining their respective weights [3]. Group 2: Industry Contributions to PPI - The weight of midstream industries, such as electrical machinery and computer manufacturing, has steadily increased, while the share of downstream industries has slightly decreased [5]. - Gold prices have significantly supported CPI, contributing 0.3 percentage points, while AI-related investments have driven PPI up by 0.9 percentage points [7]. - In January, the PPI for non-ferrous metal mining and smelting industries increased by 22.7% and 17.1% year-on-year, respectively, contributing 1.1 percentage points to the PPI increase [8]. Group 3: Future PPI Outlook - The PPI is expected to turn positive in the second quarter of this year, with tailwind factors contributing to a potential increase from -1.5 percentage points at the beginning of the year to around +0.4 percentage points by July [12]. - If the PPI month-on-month average stabilizes above 0%, it could lead to a positive year-on-year PPI starting in June [12]. - The sustainability of price increases depends on downstream demand and the stabilization of real estate investments, which have been a drag on PPI due to negative growth in recent years [13].