The copper prices on Chinese market followed the steps of that on LME in Q1 2008. The cash month and 3month copper prices saw an increase of 13.7% and 15.8% on SHFE in the period. But the increase lagged far behind the increase on LME. The oversupply on domestic market and the appreciation of RMB was the major contributors.

TC/RCs for 2008 continue to fall with the tight supply of copper concentrate globally.

Chinese copper concentrate output was 65,000 tonnes and 60,000 tonnes respectively in Jan. and Feb. 2008, much lower than 80,000 tonnes of monthly average output in 2007. Meanwhile, the national output of copper blister and refined copper in the two months was below the normal level too.

According to statistics released by the Customs, China witnessed a strong import of copper raw materials in the first two months this year. Expansion of copper smelting/refining capacities triggered an increase in demand for copper raw materials. Chinese copper smelters are therefore trying to import more copper concentrate regardless the lower TC/RC levels.

The copper smelting and refining capacity respectively increased by 640,000tpy and 880,000tpy in China in 2007. The growth of the capacity will slow down in 2008. It is expected that the copper smelting and refining capacity will expand by 288,000tpy and 430,000tpy respectively in 2008.

Chinese refined copper output grew significantly by 17.5% year on year to 874,000 tonnes, down by 9.3% on a quarterly basis.

Chinese copper production was, similarly to the production, hit both by the harsh winter weather and the holidays for the Spring Festival in Q1, with growth rate slowing down significantly.

Executive Summary
Macroeconomic Outlook
Chinese Copper Prices
Chinese Copper Material Supplies
Chinese Refined Copper Production
Import and Export of Copper
Consumption
Market Balance and Price Outlook

Tables
Table 1: Prosperous index of the macroeconomics
Table 2 :Investments in Fixed Assets by Industry (2008.01-02), Yuan
Table 3 :Average Copper Prices on LME and SHFE in 2007-2008
Table 4: Chinese Mine Copper Output in 2006-2008
Table 5 :Mine copper production in China by province/region in 2006- 2008
Table 6 :Import and Export of Copper Raw Materials in 2006-2008
Table 7 :Main Destinations for Imported Copper Blister in Jan.-Feb.2008
Table 8 :Main Destinations for Imported Copper Scraps in Jan.-Feb. 2008
Table 9 :Main Destinations for Imported Copper Concentrate in Jan.-Feb. 2008
Table 10: The smelting/refining capacity of Chinese key copper producers
Table 11 :Chinese Smelting/Refining Production in 2006-2008
Table 12 :Output of Major Copper Producers in 2006-2008
Table 13 :Production Plan of Major Producers in 2008
Table 14 :Import of Refined Copper by Destination in Jan.-Feb.
Table 15 :Chinese Copper Market Balance in 2006-2008

Charts
Chart 1 :SHFE Weekly ¨CReported Stocks in 2004-2008
Chart 2 :Copper Price on Huatong Spot Market in 2007-2008
Chart 3 :Monthly Import of Copper Blister in 2003-2008
Chart 4 :Monthly Import of Copper Scraps in 2003-2008
Chart 5 :Monthly Import of Copper Conc. in 2003-2008
Chart 6 :Copper refining capacity in China in 1998-2010
Chart 7 :Monthly Import of Refined Copper In 2003-2008

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