Base metal prices gained across the board following news of action by China's Central Government to make RMB exchange value more flexible. SMM believes, however, base metal prices will experience corrections in the coming week without any significant improvement in market fundamentals. In other news, SMM believes the elimination of export tax rebates on some nonferrous metal products will have only a limited actual impact.
Copper: On Monday, LME and SHFE copper prices gained following news of action by China's Central Government to make RMB exchange value more flexible. The SHFE copper market outperformed LME copper market, supported by strong long positions, but the wait-and-see attitude increased in spot copper markets, with lackluster trading sentiment reported. (Page 4)
Aluminum: Aluminum producers remain unprofitable. However, no significant production cuts have been reported. Most producers are delaying restarting of operations following large-scale maintenance of electrolytic cells. Some producers are also shutting down some smaller electrolytic cells, which are scheduled to be phased out by the end of 2010. (Page 7)
Zinc: TC of domestic zinc concentrate (48-53%) moved between RMB 4,000-4,500/mt over the past week, while TC of imported zinc concentrate fell to between USD 80-100/mt. (Page 10)
Lead: LME lead prices hit a weekly high of USD 1,846/mt on Monday. Domestic lead prices rallied from RMB 14,400/mt, to reach RMB 14,900/mt. (Page 12)
Nickel: China's imports of nickel ore are up, but imports of refined nickel are down in May. (Page 16)