Chinese aluminium prices outperform LME ::Macquarie Research,

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Chinese aluminium prices outperform
LME
Feature article
 The LME aluminium price has underperformed its peers over the last month,
being the only LME metal to have fallen in price over that timeframe. Chinese
aluminium prices, in contrast, have continued to increase while stocks have
been drawn down, reflecting solid demand in the domestic market.
Latest news
 Base metals were somewhat weaker in Wednesday trading, with copper
rallying later in the day after slipping on the news of an interst rate rise in
China. Both deposit and lending rates were increased by 25bps across the
yield curve. Gold performed well, rising 1.1% in conjuction with a rise in the
dollar as European sovereign remained under pressure following ratings
downgrades
 The Sierra Gorda copper project in Chile (55% Quadra FNX/45% Sumitomo
Metal Mining) has received environmental approval clearing the way for
construction to begin. The mine is due to start in 2014, with life-of-mine
production of 219ktpa of copper, 25m lbs of molybdenum and 64k ozs of gold.
In the first few years the mine could produce a massive 40mlb/year of
molybdenum.
 Northam Platinum has halted operations at its Zondereinde operations
following a fatal accident. This is the third fatal accident at the Zondereinde
operations in the last six weeks, with production likely to be suffering following
a significant outage at the end of 2010 due to strikes and operational issues.
 The North American Steel Buyers Sentiment Index prepared by Steel Market
Update gained three points in the recent assessment to +16, as price drops in
the region have moderated. A renewal of strength from the manufacturing
sector looks to be sparking some service center interest, while the latest
weekly crude steel data from the American Iron and Steel Institute shows a
run rate of 87.4mtpa. This was down 1% sequentially, but still up 3.6% from
the recent low hit in late April. However, US construction spending declined
for the sixth consecutive month in May to a seasonally-adjusted 11 year low,
according to US Census data.
 ArcelorMittal plan to restart their 2mpta #5 blast furnace at the Galati works in
Romania around the end of Q3. The furnace was idled in January 2010 for a
reline.
 The Latin American Iron & Steel Institute (Ilafa) slightly raised its outlook for
the region's apparent steel consumption in 2011, as a result of improved
market sentiment. Steel Business Briefing has reported that Ilafa now
expect Latin America's apparent steel consumption is expected to increase
7.9% this year from 2010, reaching about 62.9m tonnes. In March, the group
predicted a 7.1% hike.