The monthly reports on the Consumer Price Index (CPI) and Producer Price Index (PPI) for December 2024 are about to be released. Several industry experts believe that due to the mixed fluctuations in food and non food prices in December 2024, coupled with last year's low base effect, CPI may remain stable year-on-year and will continue to maintain a moderate upward trend; Due to external macro and seasonal factors, the year-on-year decline in PPI may slightly narrow. Wen Bin, Chief Economist of Minsheng Bank, stated in an interview with reporters that it is expected that the CPI will increase by 0.1% month on month and 0.2% year-on-year in December 2024. The research report of China Merchants Securities also shows that the CPI in December 2024 will continue to be under pressure, and the year-on-year change may be the same as that in November 2024. Bian Quanshui, Chief Macro Analyst of Western Securities, told reporters that inflation will still be weak in December 2024. It is expected that the CPI in December 2024 will increase by 0.1% year-on-year, a decrease from the previous value. In terms of energy prices, Wen Bin stated that since December 2024, international crude oil prices have fluctuated upward overall. Considering the frequent fluctuations in international oil prices, the National Development and Reform Commission has announced twice that domestic refined oil prices will not be adjusted. In terms of other energy sources, coal prices continue to decline while natural gas prices rise. Overall, it is expected that the CPI energy price sub item will remain unchanged on a month on month basis. Wen Bin also mentioned that in terms of service activities, the business activity index of the service industry increased by 1.9 percentage points to 52.0% in December 2024, indicating a rebound in service consumption. In December 2024, the performance of service consumption showed differentiation, with the gradually cold weather leading to a decrease in domestic travel for residents. However, driven by the holiday effect, consumption for movies, tourism, and other activities rebounded month on month, and it is expected that service prices will slightly increase month on month. In terms of housing, the overall rental prices in large and medium-sized cities across the country will decline month on month in December 2024. Overall, it is expected that the core CPI will increase month on month in December 2024. According to a research report by China Merchants Securities, non food items are expected to provide some support, especially with a significant rebound in domestic gasoline prices and year-on-year growth rates in December 2024 compared to November 2024. In addition, the service industry PMI in December 2024 is expected to significantly recover, and service prices are also expected to maintain overall resilience. In terms of PPI, Wen Bin expects a month on month decrease of 0.3% and a year-on-year decrease of 2.5% in December 2024. Bian Quanshui predicts that PPI will decrease by 2.4% year-on-year in December 2024, slightly narrowing the 2.5% decline from November 2024. China Merchants Securities' research report predicts that with the coordinated efforts of a series of stock policies and incremental policies, the year-on-year decline in PPI will continue to narrow. The year-on-year PPI in December 2024 was -2.2%. Wen Bin also stated that from an international perspective, global commodity prices have generally fallen since December 2024. The price of coking coal has continued to decline due to the slowdown in production in industries such as steel, reduced coal demand due to warm winter weather, and relatively abundant coal inventories. The price of iron ore has fallen due to weak terminal demand, while metals such as copper and aluminum have continued to decline due to factors such as the rise in the US dollar, weak demand, and mixed economic data from the United States. From a domestic perspective, the prices of most industrial products have weakened. The South China Industrial Products Index fell by an average of 0.4% month on month in December 2024, continuing to decline. The incremental policy is gradually showing effect, and the demand side continues to recover, but the driving force for industrial production and price recovery is relatively slow. (New Society)