[Aug 02, 2010]China Base Metal Inventories Trending Lower - Highlight from China Base Metal Briefing

The US dollar index came under downward pressure following mixed economic data from the US, helping LME base metal prices move higher. Both zinc and copper inventories in China were significantly lower, but bullish price trends waned on Friday due to concerns over future demand.

Copper:  Last week, LME copper price stood firm at USD 7,000/mt, and reached as high as USD 7,200/mt. SFHE copper prices lacked support from domestic spot demand, and moved along with LME copper prices. (Page 3)

Aluminum: Recent rallies in aluminum prices, as well as stable aluminum costs, are helping to cut average losses suffered by domestic aluminum producers. According to the latest data from the China Nonferrous Metals Industry Association, continuous growth in domestic aluminum output shows the effect from recent production cuts was limited, and there is now little chance that production cuts will increase in the short term.   (Page 6)

Zinc:  Regional zinc stocks throughout China continued to decline last week due to lower market supply.  (Page 9)

Lead:   After hitting USD 2,000/mt earlier in the week, LME lead prices rose as high as USD 2,057/mt. Domestic lead prices also made strong gains over the past week, with deals mainly in the RMB 15,450-15,900/mt range.     (Page 11)

Nickel:   China's domestic output of NPI during June fell on a monthly basis. (Page 16)