south china(nanhai) · scrap iron(leftover material) 3150-3200 + 50 hrb335(shaoguan)12mm 4950-5000...
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1#bare bright 62400-62600 +200 copper cathode(domestic standard) * 71400-71600 +400
clean cable nodules 62800-63000 +200 copper cathode(domestic standard) 64000-64200 +400
candy 61600-61800 +200 oxygen free rod 8mm 65100-65300 +400
tube of copper radiators(clean) 60700-60900 +200 low-oxygen copper rod 8mm 64200-64400 +200
USA 2#copper (94-95%) 59300-59600 +200 copper wire (1.13-2.52mm) 65000-65200 +200
2#copper(92-93%) 57800-58100 +200 copper wire2.6mm 64800-65000 +200
motor copper(91-92%) 56900-57200 +200 H65copper strap(0.3-0.8mm,y2) 60200-60500 +200
shredded copper (91-92%) 56400-56700 +200 H62copper strap(0.18-0.25mm.y.y2) 49400-49700 +100
shredded copper (89-90%) 55000-55300 +200 rod brass(14mm-120mm) 40000-40200 +100
chopped copper nodules(90-92%) 55600-55800 +200 clean copper clippings 62000-62200 +300
mixed copper scrap(79-81%) 46800-47000 +200 high grade phosphor copper clippings63700-63900 +300
USA honey (Fe﹤2%) 38800-39000 +100 tinned phosphor-copper clippings 59400-59600 +300
shredded brass (Fe≤3%) 36800-37000 +100 tinned brass clippings 39400-39600 +100
H59 honey (impurity rate ≈7%) 35800-36000 +100 65 brass clippings(clean) 46300-46500 +100
USA brass radiator 37500-37700 +100 62 brass clippings(clean) 44500-44700 +100
shredded brass radiator 30300-30500 +100 Al/Cu radiator (Cu≈45% Al≈53%) 32200-32400 +100
irony al/cu radiator 29500-29700 +100
domestic A00 (delivered to factory) * 16680-16780 + 30 Al ingot from Chalco (south China)* 16700
Alumina * 2850-2950 electric alum rod coil9.5mm * 17200-17300
import 6063 extrusion 13700-13900 electrophoresis alum profiles 22100-22300
domestic clean 6063 extrusion 13850-14050 spray-painting alum profiles 21600-21800
domestic 6063 extrusion scrap 13100-13300 frosted alum profiles 20700-20900
clean tablet( litho sheet) 13850-13950 Al ingot(made by Al radiator) 14650-14850
aluminum from radiator(85-87%) 11700-11900 EC wire 14600-14800
bulk UBC 11200-11400 clean Al from ACSR 14550-14750
Zinc,Lead, Tin
nanhua brand 0#zinc * 19700-19900 +200 1#tin ingot(yunnan) * 200000-202000+1000
electrolytical 0#zn (Guangxi, Yunnan) * 18050-18250 +200 1#electrolysis lead ingot * 17750-17950 +150
electrolytical 0#zn (Guangxi, Yunnan)17050-17250 +200 clean lead sheath from cable 14700-14900 +100
electrolytic1#Zn(yunnan, guangxi,hunan)16950-17150 +200 shredded lead (large size) 14300-14500 +100
Alloy
high grade alum alloy ADC12 *18200-18400 3# zinc alloy * 19100-19300 +200
standard alum alloy ADC12 16700-16900 5# zinc alloy 17400-17600 +200
alum alloy 7# 15700-15900 shredded zinc(84-86%) 14000-14200 +200
shredded tense (Al 93-95%)* 15400-15600 shredded taint(90-92%) 13000-13200
shredded tense(91-93%) 13600-13800 import 6061 aluminum extrusion 12450-12650
Copy right 2006. All right reserved. No part of this publication may be reproduced or transmitted by any means without written permission of the publisher.
South China(Nanhai)Note : prices with the mark "*" include tax invoice cost April 6, 2011 RMB/T,1ton≈≈≈≈2204.62lbs
Aluminum
Stainless steel
1# Jin Chuan nickel plates * 192000-193000-1500 304/2B Rolling sheet0.4mm(Zhangpu) 24900-25000 -100
316 stainless steel scrap 22500-22700 304/2B Rolling sheet0.5mm(Zhangpu)24000-24100 -100
imported 304sabot18/8 16050-16250 - 50 304No.1 Hot Rolled sheet3mm 21100-21200
domestic 304sabot Ni≈7.6-7.8% 15600-15800 - 50 201No.1 Rolling sheet3mm(Taiwan) 10600-10700
shredded stainless steel Ni≈7.7-7.9% 15350-15550 - 50 430/2B Rolling sheet 0.4mm(Baoxin) 13300-13400
shredded stainless steel Ni≈7.4-7.6% 15150-15350 - 50 430/2B Rolling sheet 0.5mm(Baoxin)12250-12350
remelt stainless steel scrap Ni≈7.0-7.2%13850-14050 202 stainless steel scrap (Ni≈3.5-3.8%)9300-9600 - 50
301scrap (Ni≈5.9-6.1%) 12100-12300 201SS 6400-6600 - 50
430solids 4950-5150 - 50 201SS (old pipe scrap) 5700-5900 - 50
Nanhai Ferrous
Scrap Iron(leftover material) 3150-3200 + 50 HRB335(shaoguan)12mm 4950-5000 + 50
cast iron 2950-3000 + 50 HRB335(shaoguan)18-25mm 4770-4820 + 40
stainless clippings (thickness≥4mm) 3050-3100 + 50 Q235Ф6.5mm 4790-4840 + 50
mix steel scrap 2580-2630 + 50 cold rolled sheet(anshan) 0.7mm 5650-5700
electric motor(Cu≈13%Fe≈78%Al≈5%) 9720-9820 + 30 cold rolled sheet(anshan) 1.0mm 5450-5500
electric motor(Cu≈11%,Fe≈84%) 8040-8140 + 20
South China (Qingyuan)1#bare bright 62200-62400 +200 clean tinned copper wire 60800-61000 +200
tube of copper radiators (no rope) 60500-60700 +200 clean tinned copper net 58700-58900 +200
copper transformer(94-95%) 58100-58300 +200 tinned copper scrap (90-91%) 53700-53900 +200
clean copper nodules (95-96%) 58900-59200 +300 lead-coated copper wire 60200-60400 +200
motor copper(90-91%) 55600-55900 +200 copper clad laminate Cu≈45% 23900-24100 +200
copper brick(93%) 55600-55800 +500 motor iron 2990-3040 + 20
clean industrial castings 13400-13600 aluminum transformer (94-95%) 13300-13450
industrial castings (Fe 6%-8%) 12500-12700 UBC Baled Densified (impurity≤4%) 10750-10850
Plastics
clean black PVC plastic husk(small) 2500-2600 clean white PE foam 6650-6750
clean white PVC plastic husk 4250-4350 high-pressure PE(clean plastic husk) 6350-6450
clean greyish-white PVC plastic husk 4200-4300 high-pressure & high-temperature PE husk(middle)3400-3500
clean PVC plastic husk (pigment) 3500-3600 high-pressure fragmentized PE(humidity:27-30%)2400-2500
clean black PVC plastic husk (large) 4050-4150 submerged materials (clean plastic husk) 2450-2550
flame retarded PVC sheath 2400-2500 flame retardant materials 87000-88000
copper cathode * 71300-71500 +500 low-oxygen copper rod 8mm * 71500-71700 +300
domestic A00 * 16510-16610 + 30 1#bare bright 62100-62300 +200
electrolytical 0#Zn Ingot * 17850-18050 +150 2#copper (94-95%) 59000-59300 +200
1# nickel plates * 192000-193000-1500 American honey (Fe﹤3%) 39000-39200 +100
1# tin * 200000-202000+1000 304/2B Rolling sheet 0.4mm(Baoxin)* 27000-27100 -100
1# lead * 17600-17800 +150 304/2B Rolling sheet0.5mm(Baoxin)* 26100-26200 -100
oxygen free rod 8mm * 72300-72500 +500 304No.1 Hot Rolled sheet 3mm * 22700-22800
Copy right 2006. All right reserved. No part of this publication may be reproduced or transmitted by any means without written permission of the publisher.
East China (ShangHai)
TaiZhou,YongKang (Zhejiang Province)low-oxygen copper rod 8mm 64000-64200 +300 316 stainless clips(Ni10Mo2) 22900-23100
1#bare bright 61900-62100 +200 imported 304 sabot (Ni≈8.2-8.3%)16250-16450 - 50
candy 61000-61200 +200 domestic 304sabot (Ni≈7.6-7.8%)15700-15900 - 50
tube of copper radiators (clean) 60400-60600 +200 430 solids 4800-5000 - 50
2#copper (94-95%) 58800-59100 +200 202 stainless steel scrap (Ni≈3.5-3.8%)9300-9500 - 50
copper transformer(Cu≈95%) 59200-59400 +200 201SS 6300-6500 - 50
motor copper(92-93%) 57400-57700 +200 201SS (old pipe scrap) 5550-5750 - 50
burnt wire(97-98%) 60200-60500 +200 scrap iron (leftover material) 3160-3210 + 30
American honey (Fe﹤3%) 38800-39000 +100 motor iron 3050-3100 + 30
pure aluminum wire 14550-14750 + 50 mix steel scrap 2740-2790 + 30
clean 6063 extrusion scrap 13500-13700 + 50 Al/Cu radiator (Cu≈48% Al≈50%) 32700-32900 +200
aluminum from radiator(89%) 12200-12400 + 50 irony al/cu radiator (Cu≈48% Al≈44% iron31100-31300 +200
tense (Fe﹤3%) 13400-13600 + 50 electric motor(Cu≈9-10%) 7830-7850 + 20
Al ingot(made by Al radiator) 14550-14650 + 50 lead sheet 14350-14550 + 50
North China (TianJin, BaoDing)low-oxygen copper rod 8mm 64100-64300 +200 2#copper(94-96%) 59200-59500 +200
1#bare bright 62100-62300 +200 motor copper(92-93%) 57700-58000 +200
1#copper 97% 61800-62000 +200 Al/ Cu radiator(Cu≈45% Al≈53%) 31900-32100 +100
burnt wire(95-94%) 59400-59700 +200 tense (Fe﹤3%) 13450-13650
Rare MetalsFe mo60 * 147000-148000 +500 1#chromium * 83500-84500 +500
Jinchuan 1#cobalt * 315000-318000-5000 electrolytic manganese * 19900-20100
CIF China (Exclude customs)
USA 1#Bare bright 8680-8700$/T + 50 USA 6063 Alum Extrusion 2005-2025$/T
USA cliff/birch (94-96%) 8280-8310$/T + 50 USA clean taint 1665-1685$/T
USA honey (Fe﹤3%) 5310-5330$/T + 30 zorba (Al 93-95%) 1815-1835$/T
USA clean ocean 4940-4960$/T + 30 USA ACSR (Al68%) 1655-1675$/T
USA304ss18-8 2130-2150$/T - 10 USA clean Al Radiator 1695-1715$/T
Copy right 2006. All right reserved. No part of this publication may be reproduced or transmitted by any means without written permission of the publisher.
currency rate USD Inverse GBP Inverse EUR Inverse AUD InverseCNY 0.15268 6.5496 0.09353 10.6916 0.10721 9.3279 0.147370 6.78563
Metal scraps performances in Nanhai market in April 6, 2011
Copper:
LME copper rebounded after touching $USD 9,264 on Tuesday (April 5) and climbs above
$USD 9,400 again on Wednesday (April 6), after a much-anticipated rate hike in China failed to
rattle the market. But as the Inflationary pressure is still quite high in China, economists predict that
China will be likely to enter the rate hike cycle in the future. Fearing that the commodity prices will
be suppressed by successive interest rate hike though, they do not expect that happens in near term.
Having been fluctuating around $USD 9,000 to $USD 10,000 since early this year, LME copper
manages to rebound from its lows only with the buying support at the low level.
SHFE copper opens lower but edges up on Wednesday (April 6), which helps to boost the
copper scraps market. From market research, the trading in South China gets more active this
morning as copper scraps buyers are seen raising 200 yuan to make enquiry. And they even tend to
raise their offers following the upward trend of SHFE copper.
Overall, insiders still hold a positive view towards the copper price in April, anticipating a
delayed peak season. But whether this can serve to support the copper price still depends on actual
demand. (Source: Lingtong Metal Information)
Aluminum:
SHFE aluminum jumps slightly on Wednesday (April 6). Spot aluminum price also rises lightly
this morning. Trading in the market gets better. From market research, the demand in South China
still awaits improvement as the inventory continues to increase due to unsatisfactory orders of the
aluminum manufacturers at the moment.
Zinc:
SHFE zinc rises tracking the rebound of the SHFE copper on Wednesday (April 6) after a
continued glide in the previous week. From marketers, spot zinc price also climbs on the day.
However, insiders deem that zinc prices will continue to fluctuate in the short term. And the buyers
still tend to be inactive to make purchases due to the slack demand.
Stainless steel:
LME nickel rebounded after plumbing to its short-term low of $USD 25,050 on Tuesday (April
5), which helps to ease the concern in domestic market of stainless steel scraps. According to market
Chinese Copper Consumers Feel The Heat From High Prices, Tight
Credit -GFMS
China's credit-tightening measures and high market prices for copper are taking a toll on the
country's copper consumers, GFMS senior base metals analyst Nikos Kavalis told Dow Jones
Newswires on the sidelines of the 10th Annual CRU World Copper Conference in Santiago.
China has established itself as the world's top copper consumer over the past decade. The
country's demand for copper, used in electrical wiring and plumbing, has skyrocketed as the world's
second largest economy continues to urbanize and industrialize.
However, China's focus on curbing inflation in the past six months is starting to affect domestic
copper consumers who are battling higher copper prices and tighter credit availability.
"Consumer stockpiles (of copper) in China have collapsed because of the very high prices
combined with increased difficulty in finding access to financing," said Kavalis, who heads copper
research at the metals consultancy.
"It's not impossible to do business but life is more difficult than it was before," he said.
Copper consumers like metal fabricators use raw copper to produce finished goods like door
handles and metal wares, as well as semi-finished products like copper wiring and pipe that is used
by manufacturers in items like iPods, air conditioners and cars.
Chinese authorities have raised interest rates and bank reserve requirements several times over
the past six months to dampen economic growth and rein in inflation rates. Several of these
research, as the stainless steel scraps traders in South China still take a dim view of the prospect of
the stainless steel scraps at the point, they remain cautious to make purchases. Most of them will
pay attention to the new orders from the steel plants in near term.
the past six months to dampen economic growth and rein in inflation rates. Several of these
increases came ahead of Chinese New Year celebrations which fell in early February.
The tightening measures coincided with record-high copper prices.
Copper futures set a record highs in early February, ahead of the Chinese New Year
celebrations, adding pressure on budget-wary consumers in China.
As copper prices rise, consumers need more money or credit to buy the same volume of metal.
However, with credit lines tough to find consumers were forced to keep inventories low and work
down existing stocks.
"Typically, Chinese fabricators would add to stockpiles ahead of the Chinese New Year, but
this year they didn't do this to the same extent because credit was too tight and prices were very
high," Kavalis said.
China's Chinalco sees strong copper, aluminum in 2011
Growing global copper consumption and strong fundamentals are expected to support prices in
2011, an executive at China's state-owned aluminum giant said on Tuesday.
Aluminum prices would rise on the turmoil in the Middle East, which has helped push oil
prices to their highest in 2-1/2 years, and on strong demand, Liu Xiangming, vice president and
executive director of Aluminum Corporation of China (Chinalco), said at the Asia Mining
Conference in Singapore.
Growth may support prices of commodities
China's economy will maintain "stable" growth of 7 to 8 percent a year, supporting demand for
commodities including aluminum and copper, said a senior official at Aluminum Corporation of
China.
Demand for aluminum in the construction sector accounted for more than 35 percent of total
consumption last year and is likely to maintain a similar level this year, Liu Xiangmin,
vice-president of Aluminum Corporation of China, said at a conference in Singapore on Monday.
"There are many large construction projects on the national and town level in the 12th
Five-Year Plan (2011-2015)," he said. "Demand will continue to grow."
China's manufacturing expanded for the first time in four months in March from February, a
report showed last week, indicating that Premier Wen Jiabao is succeeding in sustaining growth
while cracking down on inflation.
China's central bank will boost interest rates again this quarter, according to all 20 economists
in a Bloomberg survey on March 22.
Aluminum prices will increase as the price of oil stays high, driving up energy costs, which
account for more than 40 percent of the cost of making the metal, Liu said. "It's a classic case of
prices being pushed up by cost pressures. Substitution away from copper and steel in the
transportation sector will also support prices."
Still, price gains will be limited by monetary tightening efforts taken by the Chinese
government to tackle inflation, Liu said. Copper price increases will also be constrained by China's
cooling measures, he said. Copper, at around $10,000 a ton, is trading "far above cost, and we
believe prices will correct this year", Liu said.
China imported iron ore stocks rise 0.8 pct this wk
Stockpiles of imported iron ore at major Chinese ports rose 0.8 percent this week to end at
79.85 million tonnes, up for the first time in a month, according to data from industry consultancy
Mysteel.
China's port iron ore stocks have stood at more than 60 million tonnes since 2008, and surged
past the 80 million tonne mark in February following a spree of orders by local mills and traders
banking on strong steel demand.
Despite the drop in orders since mid-February, port stocks have fallen by just a fraction,
indicating that steel mill inventories have not yet reached a critical level.
Prices of the key steelmaking raw material inched up over the week as end users returned to
the market to replenish stocks that had been dwindling since mid-February.
But analysts were pessimistic about long-term demand, and said orders could slow in April as
steel mills start to digest the costly port inventories.
Portugal yields at new high; metals down on China
Portugal's key bond yield rose to a euro lifetime high as the country moved closer to a possible
debt bailout, hitting the euro, which fell further from a five-month high against the dollar after
China raised interest rates.
Metal prices and the Australian dollar, seen as a proxy for Chinese growth because of its
exports of raw materials to the world's second largest economy, also fell after Beijing hiked rates for
the second time this year to cool stubbornly high inflation.
China's tightening also dented Brent crude prices, which pulled back further from 32-month
highs but stayed just above $120 a barrel as markets focused on fears that unrest in producer states
in Africa and the Middle East could disrupt supply.
Global stocks snapped a five-day winning streak.
Moody's said it believed Portugal's incoming government would need to seek financial aid
from the European Union as a matter of urgency.
"Even though Moody's still rates the sovereign two notches higher than Standard & Poor's, the
downgrade is another blow to sentiment," said Gavan Nolan, an analyst at data monitor Markit.
There were also reports that Portuguese banks may be threatening to stop buying government
bonds to pressure Lisbon into seeking a bailout, following the same path as Greece and Ireland.
Yields on Portugal's 10-year government bonds rose to 9.033 percent, while Portuguese stocks
fell 0.8 percent, underperforming the broader FTSEurofirst 300 index, which was down 0.1 percent.
Credit default swaps implied a 41 percent probability of a Portugal default within five years,
compared with 33 percent at the end of February, data provider CMA said.
The euro was down 0.4 percent at $1.4162, off a five-month high of $1.4268 hit on Monday,
while the Australian dollar fell 0.7 percent to $1.0295 and the greenback was up 0.2 percent against
a basket of major currencies.
Investors' assessment whether the single currency can make fresh gains given that players have
already positioned themselves for interest rate rises in the euro zone during 2011 also put pressure
on the euro, which has risen 5.9 percent against the dollar and 10 percent versus the yen this year.
"There is a lot of good news priced into the euro already and (ECB President Jean-Claude)
Trichet will have to support the rate view to keep the positive momentum," said Niels Christensen,
currency strategist at Nordea in Copenhagen.
The European Central Bank is widely expected on Thursday to raise rates by 25 basis points
from a record low of 1 percent to tame inflationary pressures.
from a record low of 1 percent to tame inflationary pressures.
OIL IMPACT
Federal Reserve Chairman Ben Bernanke said late on Monday that the recent spike in
U.S. inflation was unlikely to persist.
But a sustained higher oil price could pose a serious threat to the global economic
recovery and dampen risk appetite, and commodity price pressures saw silver rise to a
31-year high.
"It's interesting that the recent rally in oil has had virtually no impact on equities. It was
just over a month ago where equities markets were nervous about the impact of oil prices on
the economy," Deutsche Bank strategist Jim Reid said in a note.
"The difference this time is that the rise has likely been due to decent growth rather than
immediate geopolitical concerns. Nevertheless one would expect the creeping price of oil to
start to get more attention given the recent rally."
World stocks measured by MSCI All-Country World Index fell 0.3 percent after hitting
six-week highs in the previous session, while emerging market shares was flat.
In Asia, Japan's Nikkei average lost 1.1 percent with investors still wary about the
long-term impact of last month's massive earthquake and tsunami and a resulting nuclear
accident that workers are still struggling to contain.
Brent crude eased after hitting a 32-month high of $121.29 on Monday as Nigerian
election delays and a short-lived strike in Gabon added to supply jitters for a market already
on edge over fighting in Libya and unrest in Yemen, which borders top producer Saudi
Arabia.
Silver dipped 0.1 percent after touching $38.77 an ounce, its highest since early 1980,
before the Chinese rate rise, while gold fell 0.3 percent and copper lost 0.3 percent, down for
the third day in a row.
Argentina's Aluar plans Brazil investment
Argentina's biggest aluminum producer, Aluar (ALU.BA), is planning to invest soon in Brazil
and expects output to reach 475,000 tons this year, the company's chief executive said on Monday.
Aluar will not meet its goal to increase output to 515,000 tons a year in 2011 as it shifts to
focus on margins, Chief Executive Javier Madanes told the Reuters Latin America Investment
Summit in Buenos Aires.
"We've prioritized the investment to add value to products...it delays the expansion plan to
boost output, but production will still rise this year" from 425,000 tons last year, Madanes said.
He sees restrictions in Brazil's aluminum market as an opportunity to invest in the regional
powerhouse.
"Brazil has restrictions that are blocking supply while demand is rising. We're looking into
investing there," Madanes said. Asked when the investment could take place, he said: "very soon."
The company's third-quarter earnings "will be in line" with the $40 million net profit in the
second quarter, Madanes said.
The global price for aluminum, trading at around $2,630 on Monday, should average around
$2,750 per ton this year, Madanes said.
"If the world economy doesn't see any turns, if the world economy grows at 3 or 4 percent this
year, we see a positive outlook for aluminum, perhaps with a slight hike in prices," Madanes said.
But he predicted it would take years before commodities demand and prices return to 2008
peak levels when aluminum prices reached $3,300 per ton.
Madanes said in recent years China had made an enormous strides to become a major supplier
in the global aluminum market.
"China currently supplies 22 to 24 percent of the world's aluminum...it went from having a
large demand for the product to become a supplier," Madanes said.
Aluar regularly receives acquisition offers from companies at home and abroad, but is not
currently considering any of them, he said.
The company, which exports about 75 percent of its total output, recently hired 300 employees
to increase its workforce to just under 4,000. Most work at Aluar's primary aluminum production
plant in the southern city of Puerto Madryn.
Aluar, which is 77 percent controlled by the Madanes family, is one of several firms in which
the state pension administrator, Anses, has a stake after the government took over the private
pension system in 2008.
The government holds a 10 percent stake in the company.
Minmetals Resources seeks copper, lead, zinc assets as top priority
Minmetals Resources has put copper, lead and zinc assets on top of its priority list, followed by
nickel and aluminium bauxite, as the company seeks to diversify its assets, said a senior company
official on Tuesday.
The company also hopes to add assets from Central Africa's copper belt and the Andean region
of South America to its portfolio in the next five years, Michael Nossal, executive general manager
of business development, told reporters on the sidelines of a conference.
China ups rates 4th time since October
China's central bank increased interest rates on Tuesday for the fourth time since October,
raising suspicions that data next week may show inflation rose more than expected in March.
China's rate rise adds to six official increases in bank reserves since October and underlines
Beijing's determination to clamp down on inflation, which leaders have declared as their most
important task this year to keep the world's fastest growing major economy on track.
The increase comes before the European Central Bank is expected to raise its rates on Thursday
for the first time since the global financial crisis, showing how inflation is rising to the top of the
global policy agenda.
"The March inflation figures must be very high," said Xu Biao, economist with China
Merchants Bank in Shenzhen.
"It is an aggressive move, and the central bank is acting more aggressively than the market had
expected. The latest interest rate rise, although at only one quarter point, may hurt investor
confidence and the real economy quite significantly. More importantly, it is not the end of China's
monetary policy tightening."
Benchmark one-year deposit and lending rates were lifted by 25 basis points to 3.25 percent
and 6.31 percent respectively, the People's Bank of China said in a statement on its website.
The rises take effect from April 6, when financial markets in China reopen following public
holidays on Monday and Tuesday.
China is due to report the March consumer price index on April 15. Economists expect the data
to show that consumer inflation rose to 5.1 percent in March, matching a 28-month high seen in
November.
Inflation was 4.9 percent in February, unchanged from January. Beijing is aiming for inflation
to average 4 percent this year.
Metals and crude prices eased after the news of China's rate rise on fears tighter policy will
restrict the country's demand for commodities. The Australian dollar, a proxy currency for
commodities, also fell.
"We did expect a rate hike in April so it's not a complete surprise," said Allan von Mehren,
chief analyst at Danske Bank in Copenhagen.
"They are raising rates to stem the inflationary pressures in the economy. We expect another
two hikes of 25 basis points each this year. We are already seeing a slowdown in the Chinese
economy but they need to raise rates a couple more times.
"They will still use reserve requirement increases but they also need to raise rates. I think they
will use different tools (to tackle inflation)."
INFLATION PRESSURES
INFLATION PRESSURES
Food prices have been the main driver of China's inflation. Although monetary policy has little
affect on food prices, since people have to eat, the tightening reflects concerns that price pressures
will spread to other parts of the economy and so raise inflation expectations.
Underscoring those worries, consumer goods giants Procter & Gamble and Unilever had both
planned to raise prices for detergent and soap by 15 percent this month, local media reported on
March 28.
Unilever agreed to comply with a request from authorities to postpone its price rises, the
Financial Times reported on Saturday.
Sharply rising commodities prices, including international crude prices that are hovering
around their highest levels in more than two years, are another inflation threat.
The economy, which grew more than 10 percent in 2010, is vacuuming up commodities
globally to satisfy the drive for growth. Analysts have said they expect inflation in China to peak
around the middle of the year.
"This rate hike suggests that the March CPI that is to be released early next week may have
surprised to the upside. Our current CPI forecast is 5.2 percent y/y for March," said Qing Wang, an
economist with Morgan Stanley in Hong Kong, in a note to clients.
"It also suggests that Chinese authorities are confident in the sustainability of underlying
growth momentum."
There are some signs that the raft of monetary tightening, which has been accompanied with
prices controls, is starting to take effect.
Indeed, the central bank drained 300 billion yuan ($46 billion) in cash from money markets in
March through open market operations after injecting cash in January and February, to add to the
tightening.
A central bank survey released in March showed more households were satisfied with current
price levels and saw less chance of rising inflation.
Purchasing managers' surveys last week also showed price pressures were easing.
GLOBAL CONCERN
Most central banks in emerging markets in Asia and Latin America have raised interest rates as
the regions emerged strongly from the global financial crisis.
But major central banks in the developed world are now showing signs of starting to catch up.
The European Central Bank is expected to raise interest rates on Thursday by 25 basis points to
1.25 percent after inflation rose above its target.
Comments from some Federal Reserve policymakers have raised market expectations that the
U.S. central bank is moving toward a tighter policy.
So far, complaints among Chinese about rising prices have amounted to little more than
grumbles, but serious inflation has sparked social unrest in China in the past.
"This is ultimately good news because it reduces the risk of policy error in China that markets
were getting nervous about,Benoit Anne, head of emerging markets strategy at Societe General, said
of the rate rise.
"It reduces the danger of Chinese policymakers being too dovish and shows them addressing
the mounting inflation risk which is a massive tail risk for emerging markets. We will see a few
more hikes as China needs more monetary tightening."
The central bank boosted bank reserves, or the amount of cash that banks have to put aside, by
50 basis points to 20 percent on March 18.
The move locks up cash that banks could otherwise lend out and potentially fuel inflation.
Excess cash stemming from China's vast trade surplus has been a root cause of the country's
inflation.
US STOCKS-Wall St set to rise at open, faces resistance General Dynamics off after jet crashes in test flight Southwest Airlines shares fall after plane groundings Pfizer to sell unit to KKR for about $2.4 billion Futures up: Dow 20 pts, S&P 3 pts, Nasdaq 9.5 pts
U.S. stocks were set to open slightly higher on Monday, with the S&P 500 facing a level where
selling has clustered in recent sessions.
S&P 500 futures traded in a tight range below 1,333. The benchmark has been unable to close
above that level since mid-February, although the index briefly pierced it on Friday.
That level is double the 12-year low hit in March 2009 and is not far from 1,344, the S&P's
2011 high and its highest since June 2008.
On Friday, the S&P closed its best two-week period since December and the Dow
industrials .DJI hit its highest intraday level since June 2008.
"The speed with which we moved up is putting a bit of a curb on a further rally," said Rick
Meckler, president of investment firm Liberty View Capital Management in New York.
"Certainly there are plenty of traders who will be using this run-up to try and take profits and
get back at a better point. It's hard to maintain the speed of this advance," he said.
The lack of significant economic data on Monday, nuclear and other quake-related problems in
Japan and unrest in Libya, Syria and other states in the oil-rich region could translate into low
volumes in Wall Street. Last week was the lowest in volume so far in 2011.
S&P 500 futures SPc1 rose 3 points and were above fair value, a formula that evaluates pricing
by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones
industrial average futures DJc1 gained 20 points and Nasdaq 100 futures NDc1 added 9.5 points.
Shares of defense contractor General Dynamics dropped 3.7 percent to $74.55 premarket after
its business-jet unit Gulfstream Aerospace said a jet crashed during a test flight on Saturday, killing
two pilots and two flight-test engineers.
Southwest Airlines Co shares dropped 2.8 percent to $12.31 in premarket trading after planes
were grounded for inspection. A U.S. safety investigator said on Sunday evidence of widespread
fuselage cracks was found on a jet that made an emergency landing with a hole in the cabin.
In the latest acquisition news, Pfizer Inc rose 0.7 percent to $20.53 after the drugmaker agreed
to sell its Capsugel unit, the world's largest maker of hard capsules, to private equity firm KKR &
Co for nearly $2.4 billion.
"Today will be influenced a little by takeovers in the marketplace and further gains in
commodities," LibertyView's Meckler said.
Nasdaq OMX Group Inc and InterContinental Exchange Inc face serious hurdles to their
unsolicited bid for NYSE Euronext, that could prevent their offer from being accepted.
unsolicited bid for NYSE Euronext, that could prevent their offer from being accepted.
Deutsche Boerse is holding off on making any decision as to whether to raise its rival offer for
NYSE Euronext, two sources familiar with Deutsche Boerse's thinking said on Monday.
Shares of NYSE Euronext dipped 0.9 percent to $39.25 premarket. Nervousness over the
political unrest in the Middle East and North Africa helped lift oil prices, with Brent crude LCOc1
rising to near $120 a barrel and U.S. crude hitting a 2-1/2-year high above $108.
Copper ends up; market digests China rate hike Copper market brushes off China 25 bps rate hike Sentiment buoyed by upbeat tone from CRU mining conference LME copper stocks stand at highest since July Coming up: U.S. weekly jobless claims Thursday
Copper ended higher on Tuesday, after a much-anticipated rate hike in China failed to rattle the
market, even as the metal-consuming giant's appetite for the metal has softened at the start of the
year. China's central bank raised interest rates for the fourth time since October in a bid to cool
stubborn price pressures.
After initial knee-jerk losses, copper prices recovered and moved higher as the session wore on,
underscoring the metal's resilience and supportive fundamental backdrop, analysts said.
"It shows just how fundamentally tight the copper market is even in a tightening environment
in China and other emerging markets, you're not seeing a breakdown in the metal," said Evan Smith,
co-manager of the U.S.
Global Investors Global Resources Fund, a natural resources fund more than $1 billion in
assets under management. London Metal Exchange copper for three-months delivery CMCU3
closed up $60 at $9,390 a tonne.
COMEX May copper HGK1 rose 0.95 cent to settle at $4.2645 per lb.
China's rate hike adds to six official increases in bank reserves since October, underlining
Beijing's determination to clamp down on potential asset bubbles, analysts said.
"My take is that China does tighten a bit more, but they're not going to slow things up too
much maybe just control some of the hot money," said Bart Melek, Vice President and Director of
Commodities, Rates Research & Strategy with TD Bank Financial Group.
"I think they did it more for the bubble-esque asset market than they did for the real economy."
Indeed, a government researcher said in remarks published on Friday that China's central bank
might have to raise interest rates and reserve requirements in April.
"You're hoping for a soft-landing scenario, where they tighten just enough to keep speculation
under control while not materially slowing their economy. It's kind of a balancing act that looks to
be working right now," Global Investors' Smith said.
Copper prices received additional support from comments made by China's state-owned
Chinalco, saying growing global copper consumption and strong fundamentals were expected to
support the price this year, although the market would be volatile.
A generally upbeat tone from the CRU conference in Chile, the world's biggest copper industry
gathering, also improved the mood. The head of Anglo American's (AAL.L) copper business, John
MacKenzie, said copper stocks held by Chinese investors were unlikely to flood the market any
time soon.
RISING STOCKS
There are concerns that rising stocks held by investors as collateral in China, not immediately
visible to the market, could significantly reduce an expected copper deficit that has catapulted prices
to record highs this year.
Latest data showed stocks of copper in LME warehouses rose 4,425 tonnes to 442,325 tonnes,
their highest since early July 2010. On Monday 6,000 tonnes of stock entered into South Korea,
extending a recent rise in LME copper stocks in Asia.
"Copper's on the weak side, not helped by that increase in stocks in Korea overnight," said
Stephen Briggs, an analyst at BNP Paribas. "It's likely to be Chinese material, and that's a pattern
that we've seen this year."
Copper prices have shed about 8 percent since hitting record highs of $10,190 a tonne in
London and $4.6575 per lb in New York on Feb. 15, as the price strength has deterred Chinese
purchases.
"We remain cautious about the short-term outlook," MF Global said in a note about base metals.
"In particular, the spectre of rising interest rates practically the world over, has us the most
concerned, as it will most likely dent growth prospects going into the second half of the year."