Last week, base metals markets made brief gains following the earthquake in Chile, but quick resumption of production at earthquake-affected mines depressed market long position sentiment. Market focus has shifted to national monetary policies following higher interest rate in Australia. As global economies continue to recover, base metals market will receive support from improved demand. Two national legislative policy meetings, the NPC and CPPCC, are now underway in China, and market players will be attentive to any new policies. In this context, CBI believes price fluctuations of base metals will increase in the short term.
Copper: According a recent CBI survey of cable and wire producers, raw material inventories in March were 23.7% of consumption, down 8.2% from January levels. Most cable and wire producers told CBI that they only made small purchases after the holiday ended due to recent price increases, choosing instead to consume existing stocks. (Page 3)
Aluminum: LME aluminum prices rebounded, supported by falling LME aluminum inventories and firm crude oil prices. However, growing domestic inventories dampened any positive impact on aluminum prices from the recovery in demand. Aluminum prices are believed to have bottomed out based on recent price trends, and are expected to advance over the next two weeks. (Page 6)
Zinc: TC of imported zinc concentrate for short-term contracts was between USD 150-160/mt, down 13.2%. (Page 9)
Lead: Last week, a narrow price band of USD 100/mt re-emerged in the LME lead market, with prices moving between USD 2,140-2,260/mt. Any upward room for LME lead prices was limited by a lack of clear market direction and continuous increases in LME lead inventories. Deals in China's domestic lead markets were made between RMB 15,700-15,800/mt, while expected strong buying interest failed to materialize. (Page 11)
Nickel: China's spot refined nickel prices climbed above RMB 160,000/mt, exceeding market expectations (Page 15)