Non-ferrous metal industry fluctuated up in May 2009.
Manufacturing index of May 2009 was better than expectation.
Investment in real estate industry maintained surging, which was expected to drive mental consumption.
Metal import sharply grew in April 2009, but export sustained sluggish. We hold that substantive import will increase domestic supply demand pressure; the pressure is likely to expand in case of unsteady domestic demand recently. However, with gradual narrowing of price difference in May 2009, pressure due to China’s substantive metal import will be eased; besides, since overseas economic recession slowdown brings demand release, overseas metal consumption is expected to see surprising performance.
LME copper and zinc inventory saw sustained decline in May 2009, whereas SHFE inventory reported increase. We maintain “Overweight” rating for the whole non-ferrous metal industry and suggest investors concerning about companies with resource edges.