Network Metals LLC

Despite the current environment of high and rising base metals prices, we are still seeing some bearish signals from certain elements of the metals world, especially in aluminum. Noranda’s CEO Kip Smith said yesterday that he sees the oversupply situation still intact, and that we should continue to see high inventory levels over the second half of this year. With increasing aluminum capacity coming back online in China (looking to quickly recreate its 2008 success in creating jobs), if true demand doesn’t pick up we could still see oversupply and falling prices. The auto industry looks like it could get a jump with Cash For Clunkers, but it’s still not clear whether or not any of the created demand will last. Until then, we are still not entirely comfortable with the idea of returning to a truly balanced market in aluminum yet.