On May 2nd, the People's Bank of China (PBOC) announced an increase in the reserve requirement ratio to 17% effective from May 10th. The euro hit a new one-year low against the US dollar as a result of the ongoing debt issue in Europe. CBI expects the US dollar index to remain strong in the medium term, and base metal prices will fall further as the debt crisis in Europe will likely dampen demand for base metals.
Copper: The US Commerce Department announced on Thursday preliminary anti-dumping duties on copper pipe and tube imports originating from China and Mexico. The tariff for Chinese products is between 10.26-60.50%. (Page 3)
Aluminum: Domestic aluminum producers continue to suffer losses, and will continue to do so as electricity costs have now increased while aluminum prices continue to fall. According to CBI sources, average losses for domestic aluminum producers are now approaching RMB 800/mt, with most aluminum producers at the breakeven point or below. (Page 6)
Zinc: LME zinc prices fell by 8.5% over the past week, while domestic zinc prices fell at a slower pace. (Page 8)
Lead: Last week, LME lead were down as much as 7% on Tuesday. Transactions in domestic lead markets were made between RMB 15,250-15,750/mt. After prices fell to a 3-month low of RMB 15,300/mt, downstream producers and traders were active, helping keep trading sentiment positive. (Page 11)
Nickel: Jinchuan Group cut nickel prices, and a strong short-position sentiment is prevailing in the spot market. (Page 13)