China’s Export Prices Jump as Oil Shock Hits Factory Costs

China’s export prices saw their biggest gain in three years in April as the oil price surge filtered through the goods manufactured in the world’s biggest exporter of goods.

Chinese export prices jumped by 5% in April from a year earlier, the largest increase since April 2023, data by China’s General Administration of Customs showed.

The increase, largely due to the oil price shock impacting manufacturing inputs and prices, comes after years of low export prices out of China. For years, Beijing has relied on cheaper goods to maintain its leadership in exports.

China’s so-called export price Harmonized System 2-digit (HS2) index tracks monthly and yearly unit value changes for nearly 100 Chinese exported goods. This index showed that the exports of mineral oil, including petroleum, surged by 22% in April from a year earlier, while fertilizer export prices soared by 17%, as the Iran war upended global oil, gas, ammonia, and urea trade with tankers stuck at the Strait of Hormuz.

In addition, the global AI frenzy and data center buildout have hiked the prices of electronics and semiconductors. The export price of China’s electronics and electric machinery jumped by more than 20% in April compared to the same month last year, according to the official Chinese data analyzed by Bloomberg.

The price hikes were concentrated in just a handful of industries, mostly those linked with raw materials needing petroleum and gas, as well as electronics.

Many other prices of China’s exports fell as domestic manufacturers competed for market share and refrained from passing the higher input prices onto finished goods.

Yet, as the overall Chinese export prices jumped by the most in three years, consumer goods globally could accelerate their price increases, stoking inflation and depressing consumer demand in major developed markets, including in the United States.

By Tsvetana Paraskova for Oilprice.com

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