Zhongjin: In the second half of the year, the year-on-year PPI may show a downward trend. It is expected that the year-on-year CPI in the third quarter will still be relatively moderate.

Zhongjin pointed out that the month-on-month increase in PPI in June has turned into a decrease, mainly driven by the impact of the international oil price decline on the petroleum and chemical industry chain. With the support of a low base in the same period last year, the year-on-year increase in PPI has expanded from 3.9% last month to 4.1%. Due to the decrease in prices of gasoline and jewelry and the weakening industrial consumer goods prices, CPI decreased by 0.3% month-on-month and fell to 1.0% year-on-year, and core inflation also slightly slowed down. The price scissors gap between production materials and living materials, as well as between PPI and CPI, has further widened, reflecting the continuation of structural differentiation characteristics and continued pressure on profits in the middle and downstream sectors. Looking ahead, Zhongjin believes that if oil prices do not significantly rise, and the month-on-month momentum continues to weaken, combined with the gradual increase in the base due to the "anti-inner loop" policy last year, the year-on-year trend of PPI in the second half of the year may show a downward trend. With weak end demand and short-term stabilization of pork prices, it is expected that the year-on-year CPI in the third quarter will remain moderate.