China March producer inflation drops for the first time in seven months

China March producer inflation drops for the first time in seven months

In March, China's producer price inflation dropped for the first time in seven months because iron ore as well as coal prices dipped, weighed by fears that Chinese steel output is outweighing demand and also threatening a glut of the metal later in 2017.

A renaissance in China's steel industry has appeared to be a key driver of the world's number two economy in recent quarters, thus helping to generate the strongest revenue surge in years and contributing to a reflationary pulse across the global manufacturing sector.

However, after cranking out as much metal as possible for the last time, Chinese steel mills are currently starting to drop prices, thus threatening to snuff out a bull market, which had brought prices of some steel construction products to their highest value since 2014.

By the way, financial experts surveyed by Reuters had predicted a softer PPI reading because a torrid surge in China's commodity markets demonstrated signs of correction. 

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