China’s “Two Sessions” refer to the session of National People's Congress (NPC) and the session of National Committee of the Chinese People's Political Consultative Conference (CPPCC), and are held in March every year. Every five years is called a session, and “Two Sessions” of this year are the 5th Session of the 11th NPC and the 5th Session of the 11th National Committee of the CPPCC. The significance of holding “Two Sessions” is that deputies transmit the organized information and requirements gathered from the people to the central government. Deputies of “Two Sessions” represent the people’s interests, and present their people’s suggestions and requirements to relevant authorities during the period of convening meetings. Local governments also hold NPC and CPPCC every year, but the time is earlier than the national “Two Sessions”.

SMM will conduct exclusive surveys on “Two Sessions” topics that are focused by China's Top 100 Companies, covering copper, aluminum, lead, zinc, nickel, rare earth, etc., and with a complete industry chain from ore operator to end consumers. After organizing information, SMM finds five hot topics including end consumer demand, supportive policy, environmental problems, raw material supply, and cash flow problems.

Copper: Markets Awaits Supportive Policy
As financial costs squeeze profits, copper enterprises attach high importance to whether or not the government will introduce some supportive measures for the copper industry.

Some copper enterprises said they hope the government can introduce some measures to drive up domestic demand.

Some are concerned about labor shortages and wire and cable quality problems.

Aluminum: Markets Expect Policies from NPC and CPPCC to Boost Domestic Demand for Aluminum
According to SMM’s survey of dozens of enterprises from aluminum industry, 68% of aluminum enterprises are most concerned about the timing of the recovery of end-user consumption.

15% of enterprises are concerned about the macroeconomic policy. One large aluminum enterprise said domestic macroeconomic policy is the biggest reason behind nonferrous metal price movements.
The remaining 17% are concerned about the fair competition between private enterprises and state-owned mining enterprises, private enterprises’ financing capacity, as well as raw material prices and supply.

Lead & Zinc: Lead & Zinc Producers Focus on Environmental Protection
SMM sources reported that 87% of lead and zinc enterprises focus on environmental protection issue, while 50% enterprises concern domestic monetary policies and downstream demand. Most of enterprises said currently low downstream demand is a result of national credit tightening policies and slow economic growth, while domestic environmental protection inspections forced many lead battery producers and galvanizers to close or suspend production, also affecting downstream demand. 10% enterprises concern RMB exchange rate issue.

Nickel: Downstream Demand Recovery Becomes Major Concern in Nickel Industry
Based on result of an SMM survey, 50% enterprises show their concerns over downstream demand recovery. Since transactions of prices of stainless steel are restricted by Chinese government’s regulation on real estate sector, sharp decline in auto sales growth, and sluggish demand from Europe and the US, it is expected that downstream demand will not recover significantly in March and April. 44% enterprises pay more attention to nickel ore supply in 2012. As China is highly depend on overseas nickel ore, raw material supply has become major restriction for nickel refineries and processors. China will face devastating risk if Indonesia ban exports of metal ore in 2012, and the final decision of such policy will be released by Indonesia government in May 2012. If the export ban is implemented ahead of schedule, tight supply of nickel ore will increase risks for Chinese enterprises.

.China Lithium Market Dynamics and Lithium Procurement Study