SHANGHAI, Jan. 15 (SMM) –

Macro Overview
QE Debate to Start, Bernanke to Make Speech
Bernanke would make a speech starting from around 5 am Tuesday Beijing Time, including monetary policy and economic recovery in the context of financial crisis. He would then take questions from the audience.

Earlier this week, Bernanke and many Fed's senior officials will make speeches, and China will release GDP data this Friday.

Industry Analysis
Base Metals to Move Lower But Supported by Positive GDP Expectation
The financial data Monday could reflect the industrial situation in the euro zone but can exert a limited impact on base metals markets owing to the time effectiveness. SMM expected domestic base metals to start down Monday with the most active SHFE copper contract hovering around RMB 58,000/mt, but facing limited downside room.

Industry Guidance
Heavy Industrial Electricity Consumption Growth Falls Sharply As Nonferrous Metals Output Growth Slows
The National Energy Administration Monday reported electricity consumption data for 2012, showing that electricity used last year grew 5.5% YoY to 4.9591 trillion kilowatt hours (kwhs). Electricity consumed in the secondary industry was 3.6669 trillion kwhs. Electricity for industrial use was 3.6061 trillion kwhs, including 608.3 billion kwhs and 2.9978 trillion kwhs, respectively, for the light and heavy industry.

From the perspective of YoY growth rate, electricity consumption fell sharply in 2012. The YoY growth rate was 5.5% in 2012, down 6.2% from the previous year. The YoY growth rate in heavy industry in 2012 was 3.8%, significantly lower than the 12.4% level in 2011.

Last year, electricity consumption growth in the heavy industry slipped considerably due to slowing nonferrous metals output growth. According to the NDRC data, output of ten kinds of nonferrous metals was 33.84 million mt during January-November last year, up only 8.4% YoY, and the growth rate was 1.9 percentage points lower than 2011.

Electricity consumption growth in the heavy industry in the first nine months of 2012 remained low, and consumption in this sector even dropped 0.1% in September. However, electricity consumption in heavy industry began increasing in October, up 5.8% YoY, and extended the upside trend through November.

Based on recent economic data releases, electricity consumption will improve gradually in 2013 as the YoY declines in PPI narrowing. In addition, the official PMI has kept expanding for three consecutive months, while the HSBC PMI stood above the 50 mark for a second straight month.

With economic indicators turning around and industrial production improving, electricity consumption in heavy industry this year should reverse weakness seen in 2012.