CITIC Securities: PPI turns positive as expected, the gap between PPI and CPI becomes the next key focus

The rise in crude oil prices amid the US-Iran conflict is the core driving force behind the PPI. The cumulative impact of the three major oil-related industries has contributed to a month-on-month PPI increase of approximately 0.6 percentage points. In addition, the non-ferrous metals and electronics industries have also provided strong price-increasing momentum. The year-on-year increase in March CPI was significantly lower than market expectations, and the notable month-on-month rise in energy sub-index prices failed to offset the downward drag from declines in food, tourism, and gold jewelry prices. If international crude oil prices remain high, profit growth of large-scale industrial enterprises in China may show a pattern of "first rising, then declining." It is recommended to continue monitoring the spread between PPI and CPI trends and the price transmission going forward.