The China's factory gate inflation hit a 13-year record high in August driven by enormous surge of raw materials prices despite the attempts of Beijing to soft them.
This inflation had put more pressure on the manufacturers in the world's second-largest economy, China.
The National Bureau of Statistics (NBS) said on Thursday that the producer price index (PPI) breached 9.5 percent from a year earlier in August.
This inflation rate is faster than the 9 per cent surge tipped in a Reuters poll and the 9 per cent that was reported in July and also the fastest pace since August 2008.
The economy of China's has recovered firmly from last year's Covid-19 depression but has been losing momentum recently due to domestic coronavirus outbreaks, high raw material prices, tighter property curbs and a campaign to reduce carbon emissions.
The commodity rates have been on a sprint in recent times, hurting the bottom lines of many mid- and downstream factories.
The coal prices in China had hit a record high on Tuesday over supply concerns as major coal regions has started fresh rounds of safety checks.
The industrial firms earnings in China have slowed down for five straight months.
Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note that coal and metals rates will likely to decline as the construction activity falls amidst the restrictions on the property sector and slowing credit growth.
Prices in the coal mining and washing sector breached 57.1 percent in August.
China tightened social restrictions to control the spread of the Covid-19 Delta variant by including travel limits that have hampered service-sector demand, although Beijing has largely contained the latest coronavirus outbreaks.
According to the NBS's Dong, the decline in airfares, travel and hotel room rates due to the Covid-19 pandemic had slowed down the consumer inflation on a monthly basis.
Service-sector activity slowed down in August to the lowest level since the first wave of the pandemic in April 2020, and a recent survey showed, as coronavirus restrictions threatened to deflect the recovery.
The core consumer price index, that strips out volatile food and energy prices, stands at 1.2 percent on year, versus a 1.3 percent surge in July.