Wang Jian, vice president of the China Society of Macroeconomics, believed that the current global economic conditions and sluggish demand both at home and broad may drive China’s GDP growth to drop below 7% in Q4, and even to further slow to less than 6% in 2014. A bottom line will be found nowhere by then.

 

LME copper prices held steady on Wednesday prior to the release of economic data for China , the largest metal consumer. Concerns over Fed’s exit from its asset purchasing program erased any upward momentum resulting from a weaker dollar. China’s CPI and industrial output data are expected to be released on Friday. 

 

LME three-month copper contract price closed at USD 7,020/mt on Wednesday, up 0.33%. LME copper has been mired between USD 6,600-7,100/mt since mid-June, and is unlikely to break through the range before the demand improves in Q4.
 

LME aluminum rose 0.81% to USD 1,801/mt, and LME lead inched up 0.06% to end at USD 2,107.5/mt. LME zinc prices remained little changed at USD 1,853/mt, while LME nickel climbed 1.73% to USD 14,012/mt. LME tin performed the best by rising some 11% in the past two week, with bid price for the three-month contract offered at USD 21,270/mt Wednesday, higher than Tuesday’s USD 21,250/mt.

 

The clampdown upon illegal rare earth mining operations in Ganzhou in H1 has given a boost to rare earth market, with rare earth prices climbing continuously since July despite unimproved demand downstream.

 

SMM survey shows that price for praseodymium oxide (tax included) was RMB 485,000/mt on August 7, a rise of 29.3% from early July’s RMB 375,000/mt, and up 41% from June’s lowest level of RMB 345,000/mt. Neodymium oxide price jumped 31% from early July to RMB 335,000/mt. Price (tax included) for dysprosium oxide leapt to USD 2.3 million, up 59% from early July’s RMB 1.45 million/mt and 109% from June’s low-end price of RMB 1.1 million/mt.

 

Inspections of rare earth mining, production, and transporting segment will be launched by eight departments, including the Ministry of Industry & Information Technology, the Ministry of Environmental Protection, and the General Administration of Customs, between August 15 and November 15. 

 

Despite being at a high level for the year, current rare earth price still lag behind that in the past couple years. Thus, SMM believes the crackdown will cause further increase in rare earth prices.