Industrial metals (copper, aluminium, nickel, etc.) daily review (May 28, 2010)

MARKET ROUNDUP

Industrial metals futures closed at their highest levels in two weeks on Thursday, as concerns about the euro zone debt crisis eased and analysts looked to engines of growth outside of Europe to keep the recovery on track.

IN FOCUS

- Chile's Codelco said on Thursday its copper output rose by 3.2 percent to 383,280 tonnes in the first quarter from last year as the world's top producer seeks to maintain output at aging mines.

- World refined copper production exceeded consumption by 148,000 tonnes in the first two months of the year, compared with a surplus of 144,000 tonnes in the same yearago period, the International Copper Study Group said on Thursday.

- After buying $1.3 worth of assets from Anglo American, Vedanta Resources plc (LSE: VED) is now the world's biggest zinc producer. Among the mines Anglo has sold Vedanta are Namibia, South Africa and the Lisheen project in Ireland. These resources will give vedanta 11% of the global zinc market.

- Industrial Bank Co in China plans to raise up to 18 billion yuan ($2.64 billion) through a rights issue to help raise its capital adequacy ratio, the bank said on Thursday.

- Peru, one of the world's leading mineral exporters, said on Thursday its output of copper andgold fell in April from the same month a year ago. Output fluctuates on price changes, labor actions, and declining ore grades. Copper production stood at 101,074 tonnes down by 1.9%.

- World refined copper production exceeded consumption by 148,000 tonnes in the first two months of the year, compared with a surplus of 144,000 tonnes in the same yearago period, the International Copper Study Group said in its latest monthly bulletin. World refined copper output in January to February was 3.062 million tonnes, while consumption amounted to 2.914 million tonnes, the Lisbon-based ICSG said.

- China government's decision to raise electricity rates for manufacturing sectors including aluminum production, could threaten closure of up to 2.7 million tons of capacity, will increase production costs by  up to $110/ton, says Barclays Capital.

- ArcelorMittal, the world's largest steelmaker, said on Thursday it will invest $1.2 billion in Brazil to boost output of steel products for the burgeoning construction industry. The investment will allow ArcelorMittal to double output capacity at its Joao Monlevade unit to 2.4 million tonnes, the company said in a statement. The program was suspended right after the intensification of the global credit crisis in late 2008 led to a tumble in demand for steel and other commodities around the world.

FUNDAMENTAL OUTLOOK

Industrial Metals futures may ease in early trade on Friday tracking overseas leads, but higher equity markets could boost sentiment later in the session. Zinc in particular may trade sideways to down today on the back of slack overseas demand.