No China Bulk Commodity Market Weekly Report intl by alicejenny



    SCI99.COM                                                           ISSUE NUMBER 168

                                                                           Jul 12, 2012


                                       Weekly Focus

    The international commodity market was volatile this week. Weak demand in China exerted
     pressures on the China commodity market. During this week, commodity prices were mixed
     in China. Among 98 products surveyed by SCI, the number of products suffering price
     decreases added to 38, accounting for 39% of the whole. 43 products enjoyed hikes in prices,
     accounting for 44%. Prices of 17 products remained stable.

    Seasonal adjusted May exports and imports were €93.5 billion and €78.5 billion respectively,
     rising by 3.9% and 6.3% month on month, Germany's Federal Statistical Office reported
     Monday. The Employment Trends Index slid to 107.47 in June, down from the revised figure
     of 108.23 in May, which was first reported as 108.34, according to a report released Monday
     by the Conference Board. The June figure is 5.6 percent higher than a year ago. China's
     Consumer Price Index rose by 2.2% in June from a year earlier, yet it was down by 0.8%
     compared to May, the lowest since January 2010. Meanwhile, China's Producer Price Index
     fell by 2.1% from a year earlier, decreasing by 0.7% on a month-on-month basis, data
     suggested published by the National Bureau of Statistics of China on July 9. Finance
     ministers of euro zone states on some of the details of Spanish bank bailout plan reached a
     political consensus, promising to extend the deadline for the correction of the excessive
     deficit in Spain by one year to 2014. They are aiming at reaching a formal agreement in the
     second half of July, and they are in for a first disbursement of 30 billion euros by the end of
     this month

    The international commodity market corrected widely this week affected by Eurozone
     finance ministers meeting, Fed meeting and key global economic data. Last Friday, US
     nonfarm payrolls, which were a little worse than expectation, made investors worry that the
     ongoing European debt crisis was dragging economic recovery in the US. Accordingly,
     commodity prices met resistance in rebounding. Panicky sentiment among the international
     commodity market somewhat eased driven by anticipation of more loose monetary policies to
     be released in China. Most commodities experienced price hikes this week.

                                       Energy Market

Crude oil

Oil Analysis

The US Department of Labor showed
                                              Figure 1: Crude Oil Price Movement, USD/bbl
that nonfarm employment figure was
lower-than-expected in Jun, triggering
the stock market tumbles and bulk
commodity selling, and international
crude oil prices dipped 3% last
weekend. Later on, the shutdown of
crude oil industry caused by a dispute
between oil workers and employers in
Norway guided the international crude
market. From this point of view,
international crude prices didn’t see
large changes on the general level but
fluctuated within a fixed range.
                                            Table 1: Natural Gas Futures Prices, USD/mmBtu

Outlook                                                                     Weekly Average
                                         Nat. Gas        Jul 11       Current      Prior
Geopolitical situation, indicators from                                                      Change
                                                                       Week        Week
major economies and the US crude NYMEX
stocks still play a key role influencing                  2.94          2.98        2.75      +0.23
crude prices. According to SCI,
                                          Table 2: LPG Closing Prices in E-China, Yuan/mt
international crude oil prices will
                                               LPG                 Jul 12         Jul 5      Change
keep moving downward in the short
                                          China-origin              5805          5580        +225
run, the direct reason is the bullish
                                             Imports                5600          5400        +200
sentiment stemming from the
investment funds. However, crude prices will still be difficult to step on a long-term rise under the
depressed global economic situation, even though many governments are trying to prevent
economic growth slowing down via various regulations and reforms.

                            Table 3: WTI and Brent Prices, USD/bbl
                                      Weekly Average                     Monthly Average
  Product       Jul 12      Current        Prior
                                                       Change            Jul             Jun
                             Week          Week
    WTI         85.81        85.48         83.52        +1.96           85.54           82.41

   Brent       100.23       99.48        97.39          +2.09          99.40          95.96

Gasoline and Diesel

National Development and Reform Commission (NDRC) cut gasoline and diesel prices for the
third time this week. After the price cut, some major state-owned refineries drove up diesel
prices, while gasoline prices remained unchanged or drifted down. Traders with low inventories
replenished proper amounts but were still cautious and market transactions picked up to a certain

The average wholesale price of 93RON gasoline stood at Yuan 8,760/mt this week, sliding Yuan
179/mt over last week; and that for diesel 0 was Yuan 7,475/mt, with a reduction of Yuan 24/mt
over last week.

                 Table 4: Domestic Gasoline and Diesel Spots Prices, Yuan/mt
                              Sinopec & PetroChina              Local Refineries in Shandong
                            Jul 12       Weekly Change           Jul 12         Weekly Change
    Diesel GBⅡ0#             7450                -50                7274              -10
  Gasoline 93 RON            8900                -100               8052              +78

Fuel Oil

Influenced by climbing international crude oil          Table 5: Fuel Oil Prices, Yuan/mt
prices, 180cst fuel oil market was boosted by Fuel oil           Jul 12       Jul 7      Change
the rising price of coking material in Shandong.    Spot          4590        4590          0
At present, demand fundamental for 180cst fuel
                                                  Futures         4699        4709         -10
oil was still weak dragged down by depressed
shipping market, which played a key role suppressing fuel oil price rises. The short-term market
will rebound largely depended on the upbeat crude market.

                                     Financial Brief


                                                 Table 6: Major Global Stock Indexes
                                       Stock Index       12-07-04          12-07-11     Change
                                         SSECI            2227.32          2175.38      -51.94
                                          DOW            12943.82          12604.53     -339.29
                                        NASDAQ            2976.08          2887.98          -88.1
                                        FTSE 100          5684.47          5664.48      -19.99

The international financial market       NIKKEI           9104.17           8851         -253.17
corrected downwards this week,
which were typically attributed to the movement of the European debt crisis and economic
readings of global major economies. Along with the spread of the debt crisis in the eurozone and
the economic slowdown in China, risk appetites drifted lower. In addition, June nonfarm payrolls
were mild in the US last week, sharpening fears regarding US economy to stagnate. Subsequently,
the financial market moved up as EU leaders agreed to support the Spanish banks. However,
Italian Prime Minister Mario Monti reiterated that they needed no bailout, which triggered market
panic. According to SCI, in spite of some progresses in the debt crisis in the European continent,
market confidence remained insufficient. Moreover, the US was struggling on the way of
economic recovery. In general, the short-term market is expected to undergo some fluctuations.
The financial market in China was not so satisfactory. Inflation pressure eased based on June CPI,
which provided more room for the macro-economic regulation. However, continual declines in
PPI and negative import & export figures also sent a negative signal. In response, market prices
suffered some contractions amid thick wait-and-see sentiments among investors. Above all,
expectations for loose policy were especially high. Furthermore, Premier Wen Jiabao also said we
would carry out proactive fiscal policy. Therefore, the future market will be comparatively

Currency Market

Risk aversion sentiment remained             Table 7: Exchange Rates of Major Currencies
strong in the foreign exchange         Exchange Rate         12-07-04       12-07-11       Change
market and the US dollar sagged             USDX               82.24          83.43          +1.19
firstly and then climbed this week.     USD/YUAN              6.3121         6.3209        +0.0088
The odds on releasing the QE3
                                          USD/JPY              79.91          79.60          -0.31
are small, as well as the
                                         EUR/USD              1.2517         1.2244        -0.0273
expectations on treasury secretary
                                         GBP/USD              1.5582         1.5507        +0.0075
meeting held in the euro zone
pulling back the euro from low, suppressing the US dollar rise. Later on, some progresses were
made on the treasury secretary meeting about the Spanish debt crisis, but they failed to buoy the
market sentiment; at the same time, the Fed showed that no bonds purchase will occur unless the
US economy worsened. As a result, risk currencies declined quickly under big pressure. In
addition, China import data in June was lower-than-expected, hurting non-US dollar currencies
further. According to analysis, the US dollar will remain firm against the euro in the near term.

Futures Market

          Table 8: Closing Prices of Main Domestic Commodity Futures Contracts
     Contract           07-05                  07-12                     Change
      L1209             10085                  9965                        -120
      V1301              6690                  6530                        -160
     TA1209              7692                  7480                        -212

      Fu1209             4709                 4699                        -10
     Ru1209             24165                 23880                      -285
     Cu1210             55700                 55150                      -550
      Al1210            15680                 15470                      -210
     Zn1210             14850                 14645                      -205
     Au1212             333.8                 324.7                       -9.1
The international commodity market corrected widely this week affected by Eurozone finance
ministers meeting, Fed meeting and key global economic data. Last Friday, US nonfarm payrolls,
which were a little worse than expectation, made investors worry that the ongoing European debt
crisis was dragging economic recovery in the US. Accordingly, commodity prices met resistance
in rebounding. Subsequently, results at Eurozone finance ministers meeting, Fed meeting
disappeared the market, leading to drops in commodity prices. Crude values continued the
volatility     while     the
                                Table 9: Closing Prices of Main Foreign Commodity Futures
agricultural market showed
a strong tendency. Soft
                                     Contract           Unit       07-04       07-11     Change
economy             remained
                                   TOCOM NR           JPY/kg       254.8       243.3      -11.5
impacting on the market,
hence the international                               USC/lb        352         344         -8
commodity market outlook
                                 LME COPPER           USD/mt       7725        7520       -205
was not optimistic. During
                                 COMEX GOLD           USD/oz       1615      1575.70      -39.3
this week, the agricultural
market remained strong while the chemical, construction materials, steel, metal and coal markets
took downward trends. China macro-economic data was mixed. PPI slips and negative import data
in China worried market players. SCI estimates that the commodity market in China still faced
downward pressures on the back of soft demand and regulations at the real estate market.

                                Petrochemical Market

                        Table 10: Biggest Movers This Week, Yuan/mt
                                                                       Change       Change
         Product                Prior Week        Current Week
                                                                       (price)     (percent)
       Acrylonitrile              12000                13200            +1200        +10.00
         Butadiene                 2310                 2500             +190        +8.23
    Phthalic Anhydride             9750                10550             +800        +8.21
      Crude Benzene                5550                 5950             +400        +7.21
         O-Xylene                  9200                 9800             +600        +6.52
          LLDPE                    3920                 3780             -140         -3.57
         Methanol                  2840                 2745             -95          -3.35
           Nickel                 122250              118700            -3550         -2.90
           MDI                    22100                21500             -600         -2.71
           Gold                    331.2               323.3             -7.9         -2.39


Ethylene:       Asian       ethylene
                                               Table 11: Asian Monomer Prices, USD/mt
sustained rising due to tight
supplies caused by shutdown at            Product         Jul 11         Jul 4
some plants. The market will
                                         Ethylene        1051.5         1021.5             +30
correct upwards in the short term.
                                        Propylene        1300.5         1264.5             +36
Propylene:         The        market
maintained the uptrend this week.       Butadiene         2500           2310             +190
Prices in Shandong edged higher          Naphtha         835.41         808.35           +27.06
while those in other regions stabilized. Given the limited favorable elements, the market will
remain stable recently. Butadiene: Some butadiene units will shut down for overhaul later in
China, so buyers showed more activity for purchasing Aug shiploads, resulting in the short supply
in Asian market and rising spot goods prices. However, the fierce appreciation may trigger
downstream players’ resistance. The butadiene market will correct on the high side for a short time.
Naphtha: Global oil prices on the whole stabilized this week. Nevertheless, as cracking plants
lifted their operating rates, demand for naphtha seemed fine and naphtha prices fluctuated upward
in Asian market. Improved profits at producers should be responsible for rises in the market.
However, for European debt crisis will remain uncertain, dealers still make operations with

General Plastics

PE: Producers tended to reduce
                                         Table12: Domestic General Plastic Prices, Yuan/mt
offers slightly considering
sluggish demand and inert Product Grade                       Jul 5        Jul 12
trading. The coming market still
                                        PE       7042         10300        10200            -100
faces downward risks. PP:
                                        PP       T30S         11250        11150            -100
Partial producers reduced offers
                                       PVC       SG5           6470         6370            -100
in light of weak demand caused
by previous sharp growth in             PS       5250         11300        11500           +200
EXW prices. The subsequent             ABS      0215A         15500        15300            -200
market is expected to undergo downward adjustments. PVC: Market demand was subdued by
continuous regulation in the housing market. Thus, the market will be unlikely to get rid of the
current predicament. PS: Considering sluggish feedstock and weak downstream demand, traders
chose to take profits off the table. The market will likely to inch lower in the short run. ABS: As
fluctuations in the external environment dampened bullish anticipation in the market, partial
holders hurried to take profits, resulting in contracting dealing prices. The coming market will
maintain the current trend.

Engineering Plastics

                                   Table 13: Domestic Engineering Plastic Prices, Yuan/mt

PC: Market prices moved                                                             Change
                                Product     Grade         Jul 5        Jul 12
sideways.        Middlemen                                                           (price)
replenished       inventories     PA6     MV Chip        21500         21500             0
properly, leading to adding      PA66       EPR7         23400         23000           -400
deals. The market will edge       PC        2805         20000         19800           -200
down next week. PA6:              PBT      GX-121        13800         14000          +200
Mounting momentum fell           POM        M90          10000          9900           -100
dampened by sluggish            PMMA       CM205         18000         17800           -200
demand coupled with poor
feedstock prices. The market will fall marginally in the near run. PA66: Market prices were
characterized as fluctuating downward on poor demand. In the absence of positive inspirations,
the market is projected to remain weak. PBT: Face cost increases, producers had to pull up EXW
offers, while it met resistance from buyers. In general, the market may edge up. PMMA:
Producers only cut production within a limited range, which supported the market little. The
market may drift lower in later days. POM: EXW quotations stayed flat. Traders sold goods
actively, while trading was thin. Along with overhauls in later days, the market is expected to
experience weak corrections.

Renewable Plastics

PE: Market prices were typically stable. Regional film material prices climbed tentatively
supported by limited goods, while offers of granule primarily sustained corrections curbed by
weak demand. Costs will prevent the market from declining further, while trading will show no
noticeable improvement. PP: Downstream users kept the need-to purchasing mode and traders
operated depending on market movements amid average feedstock supplies. PET: The market
maintained the current trend. Mainstream dealing prices edged up in North China. In East China,
following the external conditions and weak demand, partial participants carried out negotiable
room in transaction prices, while most traders were reluctant to sell at low prices due to low
inventory pressure. EPS: The market witnessed a weak trend this week. Partial market prices
inched down as supplies of lump materials eased and demand remained weak. Wait-and-see
sentiment was thick in the market. PVC: In view of high stocks and sluggish downstream demand,
producers made certain discounts in transaction prices, resulting in the increases in low-priced
goods. ABS:Producers met sales resistance and traders also showed muted operating indications.
Partial downstream users bargained while producers dug their heels at the discounts.

                   Table 14: Domestic Renewable Plastic Prices, Yuan/mt
  Product              Grade                    Jul 5           Jul 12       Change (price)
                A level PE pure EVA
    PE                                           7750            7900             +150
             chemical fiber, white clear
   PET                                           7100            7100               0
                A level BOPP white
    PP                                           8100            8050              -50

              EPS A level transparent
   EPS                                           8300            8300               0
                common A level white
   PVC                                           6500            6500               0
              transparent soft granules
               Titanium ABS A level
   ABS                                          10300            10300              0


NR:       China’s      unfavorable
                                             Table 15: Domestic Rubber Prices, Yuan/mt
economic data triggered insider
worries, under which conditions,        Product     Grade       Jul 5      Jul 12
SHFE prices adjusted and the
                                                    GB 1       24300       24300             0
spot market was weighed on by
                                          NR       Futures
thin demand. It is difficult for                               24165       23880           -285
unfavorable        elements      to
                                         SBR         1502      21200       21000           -200
disappear in a short time and the
                                          BR        9000#      23200       23100           -100
NR market will keep adjusting.
                                         SBS        T171       18800       19000          +200
Synthetic       Rubber:       Sales
companies continued bringing up SBR prices this week, but market quotations inched down and
traders showed more intentions for selling. The SBR market will correct rationally recently. The
prevailing BR EXW prices remained stable and partial sales companies lifted prices. However, the
previous lucrative goods emerged in the market, so traders were eager to sell goods and prices
edged lower. SBS: The market continued advancing. The grease SBS market fell after a price hike
while high prices of dry SBS and road modified asphalt dampened buy sentiment. Traders showed
stronger intentions for selling and transactions were moderate. Grease SBS quotations will get
rational in a short time while the dry SBS and road modified asphalt markets will keep at highs.


Benzene: Rising oil prices and
                                             Table 16: Domestic Aromatics Prices, Yuan/mt
climbing international benzene prices
                                          Product       Jul 5        Jul 12     Change (price)
as well as short supply pushed up
                                         Benzene         7600         8000           +400
benzene prices and bullish sentiment
                                         Toluene         8300         8275            -25
seemed thick. The benzene market
                                          Xylene         8500         8475            -25
will remain on the high side next
                                          Styrene       10100        10050            -50
week. Toluene: Buying sentiment was
sluggish and transactions were stalemated. The toluene market will fluctuate within a narrow
range next week. Xylene: Resources were centralized in some areas and commodity holder firmed
their quotations. However, buying was thin and the xylene market will be range-bound next week.
Styrene: The market corrected this week and players should pay attention to oil prices and
external environment next week.

Intermediates and Chemical Fiber Raw Materials

PTA:          Macro-economy       Table 17: Domestic Intermediate and Chemical Fiber Raw
offered no guidance for the                     Materials Prices, Yuan/mt, USD/mt
time being and no practical                                                              Change
                                      Product             Jul 5         Jul 12
improvement happened in                                                                  (price)
downstream demand. The               PX (CFR
PTA spot market fluctuated                                 1329          1353              +24
and it will correct on the              PTA                7500          7400              -100
downward trend next week.               CPL               18500         18200              -300
CPL:          Macro-economy              AN               12000         13200             +1200
frequently fluctuated and         Semi-dull PET
market      insiders   lacked                              9150          9100               -50
confidence, also no favorable
elements from fundamentals existed. The CPL market will undergo a short-term downward
correction. AN: Spot goods supply tightened and traders held limited commodities in hands.
Buyers had more confidence, which supported the AN market to operate at highs. The AN market
will adjust next week. PET Chip: Owing to unstable feedstock prices, buyers didn’t purchase
intensively. The PET chip market is likely to correct on the downward trend for a short time.

Phenols, Ketones and Downstream Products

Phenol:        Importers    Table 18: Domestic Phenols, Ketones and Downstream Products
offered firm prices and                                 Prices, Yuan/mt
PCs pushed prices up.             Product               Jul 5        Jul 12    Change (price)
As a result, end-users             Phenol               10250        10550           +300
began           showing           Acetone                7450         7450             0
resistance. The phenol
                                     ECH                10800        11300           +500
market will fluctuate
                               Bisphenol A              12700        12600           -100
next week. Acetone:
                           Epoxy Resin (E-51)           18000        18400           +400
The market adjusted and
transactions seemed stalemated. The acetone market will continue fluctuating next week. BPA:
Fundamentals softened but insiders refused to sell goods at low prices in view of the stiffening
feedstock prices and high USD offers. The BPA market will fluctuate on the high side next week.
ECH: Under the cost pressure, plants didn’t sell goods at low prices while downstream players
showed resistance in purchasing high-priced goods. The above conditions will sustain next week.
Epoxy Resin: Owing to short cost support and sluggish demand, the resin market lacked driving
forces to advance. The market will fluctuate at highs next week.

Acids and Esters

                                  Table 19: Domestic Acids and Esters Prices, Yuan/mt
                                 Product              Jul 5         Jul 12      Change (price)

Glacial Acetic Acid:        Glacial Acetic Acid        2875         2875             0
The market remained at         Ethyl Acetate           5900         5975            +75
a     dilemma.    Ethyl        Butyl Acetate           8350         8450           +100
Acetate: The market            Acrylic Acid           10000        10200           +200
prices continued edging       Butyl Acrylate          12000        12200           +200
higher,    but   traders
became cautious as downstream demand lowered. Butyl Acetate: The market kept climbing
pushed by the upbeat feedstock market, but sentiment became poor by the weekend. Acrylic Acid:
The market stabilized gradually, and transactions turned bleak. Butyl Acrylate: The growth
slowed down and downstream demand was poor. Hence transactions receded noticeably.

Chemical Fibers

Polyester Staple Fiber: The market drifted downward due to the weak feedstock market and will
remain poor next week. Polyester Filament Yarn: The upstream market underwent weak
correction, along with the bleak demand fundamental, the market will remain feeble. PA6 Chip:
The market is expected to experience narrow correction as CPL prices remained under adjustment
and demand was poor. Acrylic Staple Fiber: although posted prices mounted up, bolstering buyer
sentiment, demand was still weak, thus market will remain in correction. Spandex: Market prices
were underpinned by high cost and reduced output even though demand was poor, and the market
is predicted to be stable next week. Viscose Staple Fiber: No pressures were seen in sales and
production; plants held prices firmly, market will undergo narrow-ranged fluctuation.

                    Table 20: Domestic Chemical Fibers Prices Yuan/mt
                   Product                          Jul 5         Jul 12
     Polyester Staple Fiber(1.4D*38mm)              9900           9825             -75
   Polyester Filament Yarn (POY150D/48F)           10000          10050             +50
       PA6 Chip(High Speed Spinning)               20400          20400              0
      Acrylic Staple Fiber(1.5D*38mm)              15200          15550            +350
                Spandex(40D)                       43700          43700              0
          Viscose Staple Fiber(1.5D)               14700          14850            +150

Chemical Additives

                                  Table 21: Domestic Chemical Additive Prices, Yuan/mt
                                   Product            Jul 5        Jul 12      Change (price)
                             Pathalic Anhydride        9750         10550           +800
                                     DOP              11650         11900           +250
                                  Zinc Oxide          14800         14800             0
                                Carbon Black           5600         5600              0

Pathalic        Anhydride:              Sulphur          1524.58       1521.71            -2.87
Producers limited sales
volumes due to tight resources and prices soared. DOP: Traders had stronger intentions of selling
goods amid mediocre negotiation sentiment. Prices are predicted to slip. Carbon Black: Coal tar
prices gained slightly, increasing carbon black cost. Sales at most manufacturers warmed and
prices will stabilize in the near term. Zinc Oxide: Zinc prices shocked narrowly and zinc oxide
quotations remained stable. Plants produced according to orders and downstream users made
purchases on a need-to basis. The future market will remain light. Sulfur: The market maintained
flat. Sinopec raised prices to stabilize market confidence. Low prices at ports are going steady and
the third-quarter contract prices have not been released. The sulfur market may be largely
sidelined in the short term.

Organic Alcohols

Methanol: Influenced by            Table 22: Domestic Organic Alcohol Prices, Yuan/mt
the     rainy    weather,
downstream       demand            Product           Jul 5       Jul 12
shrank and methanol
                                  Methanol           2840          2745             -95
prices at ports slipped.
                               Ethylene Glycol       6750          6750              0
The market is still under
                              Diethylene Glycol      6450          6480            +30
downward risk in the near
                                  N-Butanol          9900         10000            +100
term. MEG: The macro
                               2-Ethyl Hexanol      11700         12000            +300
had no obvious favorable
news and demand didn’t improve. The market is expected to fluctuate narrowly in the future.
DEG: Surrounding environments were unsteady and rigid demand was not sufficient. Sellers kept
offers firm due to high cost. The market will be range-bound next week. NBA: Market
transactions weakened and mainstream negotiation prices dropped back from high level. Prices
may be steady-to-slipping next week. 2-EH: The uptrend softened and the market is stabilizing.
The plasticizer market is largely bearish next week and 2-EH prices may follow to decrease

Polyurethane Raw Materials

                                   Table 23: Domestic Polyurethane Raw Materials Prices,
                                    Product             Jul 5         Jul 12       Change (price)
                                      TDI               21200         21000              -200
                                Polymeric MDI           17450         17300              -150
                                   Pure MDI             22100         21500              -600
                               Propylene Oxide          11000         11200              +200
                               Polyether Polyol         11600         11800             +200

TDI: Resources were               Adipic Acid           9650          9900              +250
abundant       and      the
                                   Butanone             8150            8200             +50
downstream           market
                                     BDO               14200         14450              +250
remained sluggish. It is
anticipated that the TDI market will continue slipping. Polymeric MDI: Most traders are bearish
on the future market because of weak demand. Prices are predicted to move downwards next week.
Adipic Acid: The reluctance sentiment in the spot sales was thicker and prices rose for small deals,
however, transactions were poor due to dismal downstream demand. The market will run at lows
next week. Butanone: Support from crude prices has disappeared and demand was insufficient.
The market is predicted to be stalemated next week lacking rebound powers. Propylene Oxide:
Downstream demand increased accidently and propylene prices rose. The PO market went upward,
but high prices will be under pressures next week. Pure MDI: With increasing supply, the spot
market continued softening. Prices are expected to drop further next week. Polyether Polyol:
Upstream PO prices remained at high level, while downstream demand was light. The market will
be largely in consolidation next week. BDO: Actual transaction prices were drove up in the week
of joint price up-adjustment by producers. Speculation in the spot market is obvious, but the
rebound space may be limited.

Coal Chemical Products

Crude           Benzene:        Table 24: Domestic Coal Chemical Products Prices, Yuan/mt
Inspired     by       rising
                                   Product              Jul 5        Jul 12       Change (price)
petrobenzene prices and
                               Crude Benzene            5550          5950             +400
active        downstream
                                  Coal Tar              2375          2425              +50
purchasing, the market
                                Coal Tar Pitch          2570          2550               -20
jumped. Resources are
tight and prices still have         Crude
                                                        4800          4800                0
upward space. Coal Tar:          Naphthalene
Prices rose slightly.          Coking Benzene           7050          7500             +450
Downstream             users Maleic Anhydride           9900         10300             +400
purchased modestly with resistances to high prices. Low-end prices will rise in the future. Coal
Tar Pitch: The market shocked narrowly. Coal tar prices advanced tentatively and downstream
demand was flat, thus the market may stabilize gradually. Industrial Naphthalene: Downstream
demand was sluggish and middlemen purchased cautiously. Sales were light and most traders were
bearish on the future market. Coking Benzene: As resources were tight; production cost stayed
high and benzene prices are expected to rise, the coking benzene market will continue rising in the
future. Maleic Anhydride: Cost support was strong and resources were tight due to high overhaul
rates. The following market is predicted to move up slowly.

Inorganic Acids

                                        Table 25: Domestic Inorganic Acids Prices, Yuan/mt
                                       Product          Jul 5         Jul 12      Change (price)

Sulfuric Acid: The market Sulfuric Acid                   425           425              0
corrected at lows with bleak          Nitric Acid        1630           1650           +20
trading; sulfur prices were low
and demand was soft. The acid market will maintain weak consolidation next week. Nitric Acid:
Prices rose slightly and transactions were sparse. Aniline prices increased, while the output was
limited. The inventory of acid enterprises is high and nitric acid prices may drop marginally next

                                      Metal Market

        Product        Term         Unit           Jul 12         Weekly Change (price)
                     Futures      Yuan/mt          55150                   -830
                       Spot       Yuan/mt          55440                   -810
                     Futures      Yuan/mt          15470                   -210
                       Spot       Yuan/mt          15550                   -200
                     Futures      Yuan/mt          14645                   -205
                       Spot       Yuan/mt          14500                   -250
                     Futures       USD/oz           324.7                   -9.1
                       Spot        USD/oz           323.3                   -7.9
        Thread       Futures      Yuan/mt           3919                   -175
         Steel         Spot       Yuan/mt           3810                    -70
                     Futures      Yuan/mt           3934                   -168
       Wire Rod
                       Spot       Yuan/mt           3780                   -140
          Lead         Spot       Yuan/mt          14925                    +25
          Tin          Spot       Yuan/mt          148250                  -250
         Nickel        Spot       Yuan/mt          118700                  -3550
Units: Yuan/mt

Non-ferrous Metals

The non-ferrous metals market fluctuated downward this week. As one kind of risk assets, metal
quotations are easily to be affected by the economic fundamentals. On the one hand, US economic
growth slowed and the Fed minutes delivered no indications to carry out QE3, which weighed on
the metal market. On the other hand, the Federal Constitutional Court of Germany put off the
decision date for European Stability Mechanism (ESM) and the latest European Fiscal Compact,
which further impacted the European debt crisis. Thirdly, market insiders mostly predict that the
upcoming second-quarter economic data will be terrible, which aggravated the panic sentiment
among the metal market. Staying in off season, the metal market may continuously be soft in the
near future.

Ferrous Metals

Steel prices continued the downtrend this week. Hot-rolled steel prices declined by Yuan 100/mt
and construction steel offers dipped by Yuan 140-180/mt. CPI hit a 22-month low early this week.
In addition, the European debt crisis was volatile and the Spain treasury bonds yield further soared.
Furthermore, both the metal futures and stock market were sluggish. Traders were pessimistic and
low-priced goods successively emerged in the market. In view of high crude steel yield and
sluggish demand, steel prices will probably further decrease.


The LME copper market remained adjusted within a narrow range this week with prices
fluctuating around $7,500/mt. US economic data was unsatisfactory and the falling inflation in
China confirmed the slowed economic growth. Moreover, CPI in China hit the record low.
Lacking concrete directions, LME copper prices will remain adjusted around $7,500/mt in the
short run and market participant need to pay attention to economic data of China and US.


The LME aluminum market remained adjusted this week with LME aluminum prices at
$1,890-1,933/mt. The domestic falling inflation in June and sluggish import & export datas
triggered worrisome sentiment in the metal market, but also promised more space for China
government to relax mometary policies. Before the publication of China economic data during the
weekend and Fed minutes, market participants will bear cautious attitudes. Aluminum prices in
SHFE stayed at Yuan 15,500/mt and spot aluminum offers hovered in line with those in SHFE.
Though traders actively sold goods at discounts, downstream users were unwilling to pick up
goods, thus transactions were mostly rigid demand. In the short run, aluminum quotations will be
weak. LME aluminum prices may fluctuate around $1,900/mt while aluminum offers in SHFE
will probably remain adjusted around Yuan 15,500/mt.


LME zinc prices remained adjusted this week with market trend stable. The macro-economic
fundamental was wrapped with both bearish and bullish elements. US non-farm payrolls data was
lower than expected and China inflation pressure eased in June. Afterwards, the sluggish import &
export data weighed on the market sentiment, thus investors consecutively quitted the market and
remained wait-and-see. China will publish the second-quarter GDP data tomorrow, and zinc
transactions will be operated cautiously before its publication. Zinc prices in SHFE will fluctuate
within a narrow range and low-end offer may dip to some extent. Spot zinc sales will underwent
no large changes in the coming market.

Construction Steel

The construction steel quotations in China kept dipping this week on the whole. Third-grade
deformed bar (16-25mm) prices in Beijing were cited at Yuan 4,030/mt on Thursday, down by
Yuan 70/mt from last week. Hebei Iron & Steel Group maintained guidance prices unchanged for
its construction steel while Shagang Group decreased Yuan 70/mt for its deformed bar and wire
rod guidance prices, Yuan 100/mt for its valve snail guidance prices respectively. Other steel
plants mostly regulated down quotations. Construction steel transactions in South China were
restricted by sweltering summer heat and those in North China were restricted by rainy weather.
The construction steel market was enveloped in bearish sentiment triggered by high supply,
sluggish demand and bad weather. In conclusion, the construction steel market will continue
struggling in high yield, high stock level, dull demand and low offers, as a result, it is likely to
remain adjusted at the bottom from July to August. During this period, though the construction
steel market may slightly rebound due to transiently favorable economy, this won’t last long.
Expected by SCI, construction steel prices will kept dipping next week.

                                        Coal Market

                        Product                                Jul 12          Weekly Change
    Shanxi high-quality mixed coal, 5,500kcal/kg                650                   -15
           Shanxi mixed coal, 5,000kcal/kg                      550                   -10
             Zaozhuang 1/3 Coking Coal                         1220                    0
         Hebei Prime Coking Coal, Grade 10                    1539.72                  0
    Jincheng Washed Anthracite, Middle Lump                     1180                   0
   Yongcheng Washed Anthracite, Middle Lump                    1500                    0
Units: Yuan/mt

Steam Coal

The whole steam coal market remained weak. After lowering the inventory by cutting back or
creasing coal production, coal sales at some coal mines in Inner Mongolia tended to be stable. In
southern China, it is in the period of continuously hot weather, yet the demand for electric coal did
not improve significantly. In addition, hydroelectric power supply went on smoothly. So the
inventory of steam coal at power stations remained at a relatively high level. In the Bohai-Rim
area, the average closing price of steam coal (Calorie 5500) was concluded at Yuan 652/mt,
decreasing by Yuan 24/mt from the previous week. Reference steam coal prices at Qinhuangdao
Port continued to move lower, which were weaker by Yuan 25-35/mt this week. Weakness was
seen in steam coal prices for spots at ports in southern China. At present, it is hard for the
inventory at power stations to plunge sharply in a short time though midsummer is coming.
Therefore, steam coal prices might weaken in the future. Steam coal prices at ports will be on a

downtrend, yet the losses of prices might lessen in the future.

Coking Coal

When it turned July, coking coal prices were on a continuously decreased trend. Coking coal
prices in East China and North China plummeted again this week due to sluggish demand from the
downstream market. Large-sized coal mines in Linyi also reduced coal prices by Yuan 70/mt this
week, following the drop in coking coal prices from large coal mines located in Yanzhou last week.
Gas coal prices at large-sized coal mines in Taian fell by Yuan 70/mt with coking coal prices in
other regions staying flat. In July, dealing prices of coking coal at Shanxi Coking Coal Group Co.,
Ltd. also dwindled to a certain degree and prices for a few kinds of coals were weaker by Yuan
50-100/mt. In northwest China, coking coal prices stayed at lows this week. Coking coal prices at
major coal companies in northeast China lessened due to weak demand; coking coal prices at
Heilongjiang Longmay Mining Holding Group Co., Ltd. fell by Yuan 30-40/mt this week.
Downstream steel plants in southern China cut back steel production and took measures to lower
production costs, which exerted much pressure on coking coal trades at coal companies in
southern China. At a later time the coking coal market will be awash with bearish sentiment and
the sluggishness of the coking coal market will be ongoing in the short run.


This week the anthracite market was calm overall. Slack coal prices at some areas dropped slightly
and device operations at coal mines kept decreasing. Shanxi Asian American-Daning Energy Co.,
Ltd. reduced slack coal prices (Q5700) by 40/mt to Yuan 730/mt (FOR with tax, excluding service
charge of Yuan 22/mt) and Yuan 670/mt (FOT with tax). In addition, the producer planned to
overhaul the devices in the second half of July. In order to keep coal prices stable, restriction of
coal production was seen in anthracite coal producers in Shanxi and Henan; the trading volume of
anthracite slid continuously with market players taking thick wait-and-see stances. Subdued by the
waned electric coal prices, in the future anthracite prices might on the downward tendency while
slump coal prices are much likely to become stable.

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