Coal
China's coal production fell 3.7% year on year in 1H 2013, the National Development and Reform Commission said, without giving the actual output. Coal production fell 6.4% year on year in June alone. Profits reaped by coal producers dropped 43.9% year on year in the first 5 months of 2013.

China imported 158 million tons of coal in 1H 2013, up 13.3% year on year, according to customs figures. Imports fell for 2 straight months in May and June compared with the previous months.

The influx of imported coal has captured a substantial share of China's thermal coal market, dealing a blow to demand for domestically made thermal coal, BOCOM International said a research report. China's coal net imports totaled 106 million tons in the first 4 months of 2013, up 28.1% year on year. The report projected China's coal imports to stay high in 2013, and said the growth of raw coal production in China has begun to decline following low prices. China's raw coal production fell 1% year on year to 830 million tons in Q1 2013, which was even worse than the 3.8% 6-year-low increase in 2012. However, slowing raw coal production growth can help rebalance supply and demand in China's coal market.

Coke prices are rebounding and coking coal prices have begun stabilizing in China, the National Business Daily reported. Insiders say coal producers are considering raising prices, including Shandong Energy Group, Yanzhou Coal Mining (SHA: 600188) and Shanxi Coking (SHA: 600740).

Oil
China's apparent oil demand grew 11.1% year on year to 10.2 million barrels per day in June; the growth rate was well above the 1.1% growth in May, according to Bloomberg, China's National Bureau of Statistics and UBS adjustments. Refinery output was up 10.1% year on year to 9.8 million barrels per day in June; the growth rate also far outpaced the 1.9% in May. UBS expected the strong growth of refinery output to maintain until September, when the high base effect starts to kick in and inventory restocking fades out.

Cement
National cement average selling price rose 0.1% week on week to 318.7 yuan/ton in the week through July 21, 2013, CCB International said in a research report. Notably, cement prices increased by 10-40 yuan/ton in Guangdong and Guizhou but decreased by 10-20 yuan/ton in Liaoning and Hubei. Cement inventory remained high at 69% of full storage space as of July 21, 2013, although inventory improved in eastern China due to weaker supply following the power rationing in Zhejiang. High inventory levels were higher in northeastern, central and southern China at over 70%.

Metals
China's production of the 10 most used metals rose 10% year on year to 19.47 million tons in 1H 2013, the National Development and Reform Commission said. Electrolytic aluminum output was up 7.9%; copper output was up 12.9%; lead output was up 12.5%; zinc output was up 9.2%; alumina output was up 10%.

China's copper demand is falling as operating rates of copper tube fabricators have declined sharply from 90% in May to 78% in June, driven by seasonality and China's tight credit, HSBC said in its research report. Spot premium for imported cathodes dropped from $195/ton in early July to $173/ton recently, which the bank believes was driven by softened demand from downstream sectors. Copper inventories in Shanghai bonded warehouses rose from 400,000 tons in end June to 450,000 tons recently.

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