* Producer price index highest since July 2022 on

commodity price gains

* Consumer prices rise 1.2% y/y as gasoline and gold

jewellery prices surge

* Inflation unlikely to lead to policy moves, analysts

say

(Adds comments from analysts, details from data, market

reaction)

By Yukun Zhang and Liz Lee

BEIJING, May 11 (Reuters) - China's producer prices blew

past expectations to rise to a 45-month high in April, while

consumer inflation also accelerated as global energy costs

remained elevated, piling more pressure on manufacturers already

grappling with weak demand at home.

Analysts said cost-push factors, however, were unlikely to

trigger policy moves as they lessen the urgency for looser

monetary policy to support growth. Price levels will also likely

remain below the official target range for inflation, they said.

The producer price index (PPI) increased 2.8% from a year

earlier, National Bureau of Statistics (NBS) data showed on

Monday, exceeding a 1.6% rise forecast in a Reuters poll. The

gauge had reversed a 41-month declining streak in March when

prices rose 0.5%.

"The fallout from the Iran war pushed up inflation again in

April, but price pressures remain narrow in scope and aren't

likely to build into a wider reflationary impulse," Capital

Economics analysts said.

On a month-on-month basis, PPI rose 1.7% in April after

climbing 1% in March.

The NBS attributed higher factory-gate inflation to rising

prices in sectors such as non-ferrous metals, oil and gas and

tech equipment, according to statistician Huo Lihui in a

statement.

Chinese policymakers have repeatedly vowed to boost weak

domestic consumption, curb excessive market competition and

drive a rebound in prices as deflationary pressures weigh on

businesses' profit margins.

Inflation driven by external price shocks, however, does not

indicate an improvement in the supply-demand balance and could

spell new headaches for the export-led economy.

Prices still face upward pressure as oil prices are unlikely

to return to levels before the war, but inflation is expected to

only have a limited impact on policy, said Xu Tianchen, senior

economist at the Economist Intelligence Unit.

Rising global energy costs are also pushing the cost of

living higher. China's state planner has raised retail prices of

gasoline and diesel since the U.S.-Israeli attacks on Iran began

in late February, although it has capped the increases to blunt

the impact on consumers. Major Chinese airlines have ramped up

fuel surcharges for domestic flights.

The consumer price index (CPI) rose 1.2% year-on-year in

April versus a 1% increase in March, driven mainly by price

swings in gasoline and gold jewellery, according to the NBS.

Economists polled by Reuters had expected a 0.9% rise.

Higher living costs could further subdue household

consumption, which has remained sluggish during a slowdown in

overall economic growth and a years-long property market slump.

Food prices dropped 1.6%, with pork prices down 15.2%.

Core CPI, which excludes volatile ​food and fuel prices,

grew 1.2% from a year earlier compared with a 1.1% increase in

March.

On a monthly basis, CPI ticked up 0.3% versus an expected

0.1% dip and compared with a 0.7% drop in March.

The benchmark Shanghai Composite index was up 0.9%

by midday, while the blue-chip CSI300 index gained

1.4%.

WILL INFLATION LAST?

China's year-on-year PPI reading turned negative in October

2022, marking the start of a years-long deflationary streak as

growth momentum faltered and demand at home, worsened by a

property downturn, could not absorb manufacturers' capacity.

A government campaign to curb excessive capacity and price

competition in key industrial sectors, such as in solar panel

and auto manufacturing, had helped moderate producer price

deflation. But the headline reading only turned positive in

March when supply chain shocks boosted energy prices.

"It is possible that cost-push pressures work their way

through to wider inflation over the coming months. But with

overcapacity in most sectors unresolved and domestic demand

growth still sluggish, the ingredients for a sustained

reflationary impulse still appear to be missing," Capital

Economics analysts wrote.

Beijing's sizeable energy reserves and diversified supply

mix have cushioned its economy from the impact of energy supply

disruptions in the Middle East, and its exports remained

resilient this year due to robust demand for AI-related goods

and as firms stockpiled components on fears over rising material

costs.

China's export engine is vulnerable to swings in demand from

global trade partners, many of whom are scrambling to contain

the fallout from the Middle East conflict.