This market comment was written at 7:25 am on November 16th, US east coast time..

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1 LME Officials as Vol Op/Int of Nov 15th close High Low Close Csh/3 STOCKS (CH) SUP RESIS RSI 000 (000) MAV MAV MAV 3 Month Copper , Month Alum , Month Lead , Month Zinc , Month Nickel , Month Tin , Month Nasaac , NA NA This market comment was written at 7:25 am on November 16th, US east coast time.. We had a broad-based rally yesterday in the LME complex, as relatively oversold conditions led to a technical bounce. This was perhaps not that surprising considering where some of the RSI readings were yesterday. (This indicator measures how overbought or oversold a complex is, with being overbought, while is oversold, this in relatively normal market conditions). Copper, for example, was showing an RSI of 35 yesterday, and zinc got down to incredibly low 11. In any event, yesterday s modest rally saw copper finish at $6,910 up from $6,845 on Tuesday, with ali, nickel, and zinc all chalking up decent gains as well. Helping the bullish tone somewhat, was the stronger than expected increase in the November New York Federal Reserve's manufacturing index, which rose to a recent high of 26.66, and came in almost double the expected forecast. However, all eyes will be on the far more important US industrial production number released later today (expected at +.3%). In addition to the IP figure, we get readings on consumer prices for October (expected at -.3% on the overall rate), weekly initial claims, (expected at 310,000), and the Philadelphia regional index (expected at 5). Metal prices this morning are mixed, with copper and ali down modestly, while zinc and lead are higher. Things should be relatively quiet, as participants await the release of both the industrial production data and the Codelco talks, which enter the final rounds this week. Chile's Codelco said late last night that it would submit a contract proposal to nearly 3,000 workers at its largest division on Wednesday in the hopes of reaching an early deal, but the unions said they will go into regular negotiation this week, as formally scheduled. We should probably get some answers by Monday, however, for now, copper does not seem to be overly preoccupied with this issue, focusing instead on the more pressing demand and stock concerns at hand.

2 COPPER SUPPORT: $6400 RESISTANCE: $7000 We are currently at $6895/MT, down $15/MT, and should be primarily influenced by the industrial production numbers due out of the US later today. * Konkola Copper Mines (KCM) in Zambia has suspended operations at its Nchanga mine after a state body withdrew part of the company's license due to pollution violations; about 540 tons of production per day was displaced. * Bloomsbury Minerals Economics cut its refined copper forecast deficit figures for this year from 328,000 tons to 235,000 tons and is now expecting a surplus in 2007 of 45,000 tons instead of a deficit of 130,000 tons. Bloomsbury s managing director said, "Given that concentrates stocks are very low, there remains the possibility of mine problems taking the refined copper market back into balance." He went on to comment that, "Refined production is holding up better than we had expected, despite a very tight concentrates market, and U.S. consumption has turned down more sharply than we had expected." * Chile's Codelco is offering 2007 premiums of $130/ton to Chinese clients, trade sources told Reuters today. Some Chinese buyers had expected Codelco to raise 2007 premiums to as much as $150 per ton after raising 2007 premiums to a record $125/ton for Europe, up $20 from 2006 levels. In a related item, Codelco plans to enter a smelting joint venture in China, and is in preliminary talks with Yunnan Copper Industry to build a smelter of at least 100,000 tons a year. * Minmetals said today that China's refined copper imports could rise to 1 million tons in 2007, after the effects of destocking from government reserves wears off. Copper consumption in 2006 is expected to rise by 5.6 percent compared with 2005, the slowest rate of growth since China imported almost 600,000 tons of refined copper through September of this year. * China's refined copper output is likely to rise to 3.2 million tons next year from 3 million tons this year, the China Nonferrous Metals Industry Association said today. The country's 2007 output of copper in concentrate should increase to 800,000 tons from 750,000 tons this year, while copper products output in 2007 would rise to 5.5 million tons, up from 5.2 million tons in 2006.

3 ALUMINUM SUPPORT: $2615 RESISTANCE: $2700 We are currently at $2692/MT, down $7/MT, but did close below $2700 yesterday for two days in a row (now resistance). This brings next support in at $2615 (this week s intraday low). Below that, there is support at the $2550 level. * China's 2006 exports of aluminum, including alloy and products, are likely to reach 2.4 million tons, an official from China Nonferrous Metals Industry Association forecast today. * India's National Aluminum Co wants to gradually cut alumina exports and use its output to increase aluminum production, its chairman said on Thursday. NALCO produced about 1.6 million tons of alumina in the year ending March 31st, of which about 800,000 tons was exported. ZINC SUPPORT: $4000 RESISTANCE: $4580 Zinc is at $4269/MT, up $79/MT, with some buying carrying through from yesterday s snapback; prices are also perhaps getting a lift from the latest ILZSG numbers. (See below): * Global refined zinc consumption rose to million tons in the first nine months of 2006 from million a year earlier, this according to the latest monthly bulletin from the International Lead and Zinc Study Group. Refined zinc output rose to million tons in January to September from million a year ago contributing to a deficit of 304,000 tons in the January to September period. The ILZSG s numbers are compiled on the next page:

4 Latest ILZSG Zinc global data in thousand tons Sep'06 Aug'06 Jan-Sep'06 Jan-Sep'05 Mine output (zinc content) Refined output , , , ,625.0 Refined consumption , ,866.0 Sep'06 Aug'06 End-05 Commercial stocks (western world) Stocks/cons ratio (weeks) U.S.stockpile Source: Reuters * Peru s Volcan Campania Minera expects its production of contained zinc to rise by 27% to nearly 400,000 tons in 2008 from the expected 310,000 tons this year. LEAD SUPPORT: $1400 RESISTANCE: $1750 We are at $1530 on lead, up $10. * Global refined lead consumption was million tons in the first nine months of 2006, up from million a year earlier, this according to the latest monthly bulletin from the International Lead and Zinc Study Group. Refined lead output rose to million tons in the January to September period from million a year ago, leading to a small surplus in the January to September period. The full ILZSG numbers are listed on the next page:

5 Latest ILZSG Lead global data (in thousand tons) Sep'06 Aug'06 Jan-Sep'06 Jan-Sep'05 Mine output (lead content) , ,44 Refined output Refined consumption , , , ,730.0 Sep'06 Aug'06 End-05 Commercial stocks (western world) Stocks/cons ratio (weeks) U.S.stockpile Source: Reuters * Top Chinese lead and zinc smelters have reportedly agreed to triple premiums for exports of refined lead in 2007 to offset a cancellation of tax rebates, smelter officials told Reuters today. Zinc premiums have not yet been decided on. NICKEL SUPPORT: $28,500 RESISTANCE: $30,000 Nickel is at $29,850, down $50 and apparently now hemmed in by $30,000 resistance. * Chinese nickel firms Jinchuan Group and Jilin Ji'en Nickel Corp have agreed to make an investment of $800 million in the Ramu nickel project in Papua New Guinea, an executive with the project developer said on Thursday. The project is expected to begin commercial production in April 2009, with annual output of 32,000 tons of nickel. TIN SUPPORT: $9,500 RESISTANCE: $10,000 Tin is at $9,850, up $200, and recouping some of yesterday s losses.