Table of Contents
Increasing metals price forecast...................................................................................3
Upgrading Sterlite to OW and downgrading Hindalco to UW; remain UW
on Nalco.......................................................................................................................3
Base Metals Summary .............................................................7
A stronger view for 2009H2, although risks rising for 2010 and beyond....................7
Demand and Supply Dynamics .............................................10
Demand: the power of the inventory cycle, supplemented by China.........................10
A strong 6-12 months for demand lies ahead.............................................................12
Supply: adjusting to a lower demand base.................................................................13
Base Metals.............................................................................15
Copper: China’s appetite satiated, for now, hunger building elsewhere....................15
Aluminium: Fundamentals weak, but do not fight the 2009H2 rally.........................19
Aluminium and Financing: Come Out, Come Out, Wherever You Are ....................22
Zinc: Stuck between a rock and a hard place.............................................................23
Lead: participating in, not leading, the recovery trade...............................................27
Companies
Sterlite Industries .......................................................................................................32
Hindalco Industries ....................................................................................................40
National Aluminium Co Ltd ......................................................................................48