China's recent move to tighten credit weighed on commodity markets, with base metal prices likely falling further in the coming week amidst current weak short-term demand. In 2010, particular attention should be paid to the question of how to stimulate downstream demand and consume inventories stockpiled during 2009.

Copper:  According to the National Bureau of Statistics, China's output of copper semis was 1.01 million in December, up 36.90% YoY and up 9.6% MoM. Since November 2009, China's average monthly copper semis output has exceeded 900 kt, and with output growth above expectations. (Page 6)

Aluminum:  Tight supply of electric power will increase the number of electrolytic cells in maintenance at aluminum producers, and any negative impact on aluminum output will emerge gradually, so special attention in the short-term should be focused on any changes in weather conditions in north China. (Page 7)

Zinc:  China's output of zinc concentrate and refined zinc both set new highs during December 2009. (Page 9)

Lead:  Liquidity concerns dominated lead price trends and market sentiment over the past week. On Wednesday, LME lead prices tumbled to USD 2,300/mt, with declines in positions also reported. Domestic lead prices moved between RMB 16,600-16,900/mt this past week, with more pressure felt at the high end. (Page 12)

Nickel:  Stainless steel inventories in Wuxi were up 5.36%. (Page 17)