On July 15th, China announced a series of economic results. The drop in China's CPI to below than 3%, the 2010 inflation target, greatly depressed market expectations of an interest rate hike. The GPD growth of 11.1% during 1H 2010 also lifted market confidence for stable economic growth in China. Base metal prices advanced in response to the positive reports, but high inventories and soft market fundamentals remain, and SMM believes this will hold upward price momentum in check.
Copper: China Copper supply tightened as a result of unit maintenance at copper smelters, lower imports of copper, and unwillingness by suppliers to move goods before the delivery date. (Page 4)
Aluminum: Prices failed to move upward despite a rally in European and US stock markets, and a lower US dollar index. SMM believes aluminum prices will continue to fluctuate weakly in the short term. (Page 7)
Zinc: China's zinc stocks have been growing steadily, but experienced significant declines last week. (Page 10)
Lead: After five days of gains, LME lead prices corrected to close around USD 1,800/mt last week. Transactions in domestic lead markets were generally made between RMB 14,650-14,870/mt, with traded prices moving closer to the low-end. (Page 12)
Nickel: Large steel mills released July NPI tender prices, with bidding prices from Taigang Stainless Steel up slightly. (Page 14)