[Dec 13, 2010]China to Shift to Prudent Monetary Policy in 2011, Base Metal Prices Feel Pressure - Highlight from China Base Metal Briefing

China will implement a proactive fiscal policy and prudent monetary policy in 2011 and macro-economic regulations will be more targeted, flexible and effective, according to reports from the CPC central committee meeting held on December 3rd. On December 11th, China's National Bureau of Statistics will announce major economic data for November, and China's CPI for November is expected to surpass the 4.4% increase from October.  Base metal prices will come under pressure in the short term as China takes new efforts to cope with the pressure.
 
Copper: According to China Customs, China's imports of unwrought copper and copper semis were 351.6 kt in November, up 78.1 kt or 28.55% from October's 273.5 kt, and up 21.17% YoY.  SMM believes China's imports will remain above 300 kt in December.   (Page 3)

Aluminum: China's Ministry of Industry and Information Technology issued a notice to eliminate outdated production equipment and ordered enterprises to strictly implement the terms of the notice within the specified period.   As a result, aluminum industrial concentration will increase and energy savings will become the development trend for aluminum producers. (Page 7)

Zinc:  The average operating rate of major domestic smelters was down 5.2% MoM in November.(Page 8)

Lead:  Last week, LME lead prices fell to around USD 2,340/mt, but rebounded to remain above USD 2,400/mt over the weekend.  Traded prices in China's domestic lead markets were RMB 17,100-17,250/mt, with muted trading sentiment reported. (Page 12)

Nickel:  Three ships carrying nickel ore bound for China have sunk in the past 40 days.  As a result, prices for high grade nickel ore are expected to rise in the near term. (Page 15)