News that China is considering introducing a property tax dealt a heavy blow to China's stocks markets and sent base metal prices lower. Coupled with the approach of a seasonal low demand period for base metals and fears of a double-dip recession, base metal markets will remain depressed in the short term.

Copper:  Last week, copper prices extended their downward slide, but SHFE copper prices fell less than LME copper prices. Overall spot supply tightened and buyers were bargain-hunting, helping improve trading sentiment.  (Page 4)

Aluminum: Support for aluminum prices from rising costs has failed to materialize, while China's efforts to curb its domestic real estate market and weaker demand for automobiles are further exacerbating weak aluminum market fundamentals. Downstream consumers welcomed lower aluminum prices in spot markets as SHFE three-month aluminum contract prices fell below RMB 15,000/mt. (Page 6)

Zinc:  A recent SMM survey of 40 zinc smelters revealed total output reached 339 kt during May, with the average operating rate falling to 82.6%, down from 85.6% in April.  (Page 8)

Lead:   Last week, LME lead prices remained sluggish, slumping to USD 1,630/mt on Thursday, a new 10-month low. Earlier this past week, domestic lead prices stood above RMB 14,600/mt, but fell below RMB 14,500/mt on Wednesday when LME lead prices plummeted.   (Page 11)

Nickel:  Domestic spot prices expected to continue falling.  (Page 13)