China’s producer price index climbed 3.9% year-over-year in May 2026. That’s the fastest pace of factory gate price increases since July 2022, and it signals something bigger than a single data point: the world’s manufacturing engine is no longer exporting deflation.
Mining costs surged 15.8% year-over-year in May, and production material costs jumped 5.2%. Energy-intensive industries, Bitcoin mining very much included, are staring down a fundamentally different cost structure than the one they enjoyed for most of the past three years.
The deflation era is officially over
China’s PPI had been negative for 41 consecutive months starting in October 2022. That’s nearly three and a half years of falling factory prices, driven by weak domestic demand and chronic oversupply in Chinese manufacturing.
March 2026 broke the streak with a modest 0.5% year-over-year gain. April accelerated to 2.8%. Now May comes in at 3.9%, with a month-over-month increase of 0.5% following April’s 1.7% monthly jump.
