The US dollar index fell to a 4-month low of 76.53 as quantitative easing policies remain in place in the US, while turmoil in the Middle East and North Africa was keeping gold and oil prices high. Surging oil prices were adding to market expectations of global inflation, which also supports base metal prices. However, worries over a slowing in economic recovery due to higher oil prices depressed outlook for metal demand, increasing price volatility. China's National People's Congress, beginning March 5th, will develop guidelines for the 12th Five-Year Plan period which will have a significant impact on long-term base metal prices.
Copper: With traders optimistic because of improved consumption in March, traders again became major force last week. Speculators were also looking for arbitrage opportunities. Spot discounts narrowed, with traded prices up from RMB 72,500/mt, to RMB 73,300/mt. (Page 3)
Aluminum: Aluminum alloy liquid direct-supply technology is required to be developed due to its characteristics of energy conservation, environmental protection, less material consumption, and lower labor costs. However, the technology is not yet mature, and there are other obstacles such as successfully building aluminum alloy smelters and die-casting enterprises in the same area. (Page 6)
Zinc: China will change discharge fees to a discharge tax, causing costs at zinc smelters to increase. (Page 8)
Lead: Last week, LME lead prices fluctuated narrowly between USD 2,520-2,570/mt, while domestic lead prices were RMB 17,300-17,600/mt. (Page 11)
Nickel: Supply of spot NPI is still tight, and prices for both NPI and nickel ore were higher. (Page 13)