■
Channel checks on demand. Based on our proprietary demand survey, we
expect near-term order book to soften, mostly driven by seasonality.
Feedback from producers in early November suggests: 1) The MoM trend
for forward order books of finished goods softened, with respondents
expecting a sequential improvement fell to 11% in November versus 80% in
October, and respondents expecting a declining MoM trend expanded to
33% in November versus 20% in October, while the rest saw flat demand;
and 2) materials demand is improving for coal and cement, is flat for steel.
The percentage of producers expecting improving MoM demand is 100% for
coal producers (up from 33% in October), 80% for cement producers (up
from 60% in October), and 50% for steel mills (flat as in October).

■
Top picks: our top picks are CR cement and China Coal
■
Steel: upside risk on pricing
■
Coal: seasonal strength
■
Cement: upside risk in 2010E earnings
■
Aluminium: supply cut, and dollar driven price hike
■
Alumina: higher long-term pricing
■
Copper: semi output softened