[Jul4, 08] LME Copper Prices Fall After Hitting Historical High

● Copper: Last week, scrap copper prices in north China soared by RMB 1,000/mt, much more than the average price increase of RMB 100/mt in other domestic markets. (Page 2) The copper tube industry had much lower operating rates during July compared to June, due to a sluggish real estate market and low exports. (Page 3)

● Aluminum: Aluminum prices in China’s domestic market should outperform LME aluminum prices due to slowly decreasing domestic inventories, as well as production cuts from power shortages during the summer. (Page 6)

● Zinc: Last week, LME zinc prices were weak even as LME copper prices hit a new high.  Poor market fundamentals will serve to dampen domestic zinc prices, along with arrivals of imports, and the arrival of the  slow demand period. (Page 6)

● Lead: LME lead prices dropped below a key supportive level of USD 1,700/mt.  Poor market fundamentals gave little support on LME lead prices. Last week, offers of imported lead were heard in Shanghai market, but exact volumes were unknown.  The imports were exported previously under the brand name Yuguang. (Page 8-9)

● Nickel: Jiuquan Iron and Steel Company (JISCO) planned to reduce output of stainless steel further to 15-20 kt in July.  Market players said JISCO would focus on producing plain carbon steel in view of sluggish trading sentiment in stainless steel markets. (Page 2)