SHFE copper prices bounced back last week following a pick-up in LME prices. Sentiment was given a boost by the release of Chinese December trade data, which showed a significant pick up in net imports of refined metal (see report below). The SHFE copper front month contract climbed to Rmb55,150/t ($7,071/t) at the market close on Friday, an increase of Rmb2,750/t ($353/t), or 5.2% over the previous week.
SHFE aluminium prices made modest gains last week with the front month contract up by 0.4% from the previous week, to close at Rmb19,870/t ($2,547/t) on Friday. SHFE registered aluminium inventories continued to rise, with another increase of 1,685t to 38,387t. Year to date, SHFE aluminium inventory has increased by 19,805t.
Seven non-Chalco alumina refineries held a meeting last week in Jinan, Shandong province to exchange views on the alumina market situation and to discuss ways in which they can ensure that the industry acts in a way which is beneficial to the producers, and also discussed cooperation on technology and management.
Detailed Chinese metals trade data for December 2006 was released late last week. The previous release of some summary data in copper and aluminium meant that there were no surprises in those markets, and the highlights therefore were in zinc and lead ?with Chinese exports of refined metal strong in both.
Last week, the Chinese spot steel market continues its gains on major products. Hot rolled coil prices increased by 1.7% WoW and 5.7% MoM to $458/t ex-VAT; galvanised steel was up by 0.2% WoW and 1.2% MoM to $611/t. Rebar prices edged up by 2.4% WoW and 5.5% MoM to $349/t ex-VAT.
The latest quotes for premium Datong Thermal coal from Barlow Jonker are at Rmb51525/t fob Qinhuangdao (northern shipping port), up almost 20% from mid-2007. After allowing for the cost of shipping to southern China, domestic prices are close to spot offerings from Australia. Last week the NDRC issued a report entitled China Coal Industry Eleventh Five-Year Plan, in which the NDRC blueprints the coal industry's development for the next five years by emphasising large-scale production. We look at why the Chinese supply/demand picture could be rather tighter than the government's forecasts suggest.
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