EDWARD MEIR: + 1-203-656-1143

Senior Commodity Metals Analyst

Email: emeir@mfglobal.com

THURSDAY, FEBRUARY 17, 2011

LME DAILY METALS REPORT

As of LME STOCKS VOL O/I 10 40 100
HIGH LOW CLOSE CSH/3 3’S/15 (CH)
SUP RESIS RSI
Feb. 16 (000) (000) MAV MAV MAV
CU 9930 9840 9842 +6 +156 407,200 (+1400) 9650 10190 54 135 315 9993 9630 8934

AL 2524 2504 2504 -28.5 -67.5 4598200 (+275) 2470 2570 53 195 750 2528 2475 2402

PB 2645 2591 2592 +3.75 +54 297,200 (-50) 2420 2712 56 44 115 2575 2538 2448

ZN 2520 2485 2486 -26.25 -39 708,875 (-100) 2320 2540 57 92 266 2487 2411 2358

NI 28675 28550 28575 -33 +1025 129,924 (-174) 23600 30000 68 34 109 28370 26164 24573

SN 32550 32500 32500 -40 +400 17,610 (-60) 30000 35000 88 11 21.3 31642 28471 26793

NAA 2480 2490 2490 -15 -41.5 137,180 (+100) NA NA 56 2.1 8 2509 2426 2344
Shanghai Nearby Last (YUAN) 74,680 (-980) 17,150 (-75) 19,760 (-195) LME/SHAN CU
Shanghai Stocks as of Feb 1 CU: 144,197 MT(+9899) AL: 431,356 MT (+1472) ZN: 326,620 (+410) ARB: 1287

CU AL PB ZN NI SN
2011 HIGH/LOW 10190 / 9235 2575 / 2360 2712 / 2325 2547 / 2220 29095 / 23822 32799 / 25725

2010 HIGH/LOW 9728 / 6035 2500 / 1828 2690 / 1535 2736 / 1577 27250 / 16975 27500 / 14850

Explanations for our table: High/low/close are official LME prices for the day prior; cash/3’s and the 3’s/15 spreads is the spread between the respective
periods, with a positive number reflecting a backwardation and a negative numbers reflecting a contango. Stocks (in MT) show inventories on hand for the
current day, along with changes from the day prior. Volume and open interest data are for the day prior, while the MAV refers to the 10, 40, and 100-day
moving averages. Shanghai prices are as of close of trading from the day priori; Shanghai stocks are in MT for the week indicated; please contact this writer for
any further questions. *Arb differential number is derived as follows: LME 3-m copper in Yuan, including 17% VAT, minus SHFE third month;
(+ would mean LME is over).
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
This market comment was written at 8:05 a.m. on February 17th, US east coast time...

Copper ended down for a second straight session yesterday, as prices worked lower on lingering concern about Chinese
inflation data released earlier in the week, coupled with similar worries surfacing here in the US. In this regard, we had
reports out yesterday that underlying wholesale prices in the US climbed in January to their highest level in more than two
years, as the index of producer prices rose 0.8%, slightly ahead of estimates. Core prices were up a more benign .5%, but
there is little doubt that the commodity price spiral we have been witnessing over the past few months is finally starting to
seep into the US (particularly if one disregards the controversial "core" rate reading, which excludes food and energy).
Whether manufacturers are now able to pass these rising wholesale costs on to their customers is a different matter, and
success will vary from industry to industry. Our take is that manufacturers will, by and large, struggle to pass the bulk of
these costs on because of intense competition, guarded spending by US consumers, and still-high unemployment.

Right now, metals are off again, although off their worst levels, with copper and tin down the most. The dollar is steady,
holding at $1.3550 against the Euro, and not doing much over the last few days, while oil prices are down by about $.10 after
spiking yet again yesterday on renewed tensions in the Middle-East. This came in the wake of a statement put out by the
Israeli foreign minister claiming that two Iranian warships were planning to sail through the Suez canal en route to Syria on
Wednesday, and went on to describe the move as a "provocation".

The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. MF Global
Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect
judgments at this date and are subject to change without notice. The principals of MF Global and others associated or affiliated with it may recommend
or have positions which may not be consistent with the recommendations made. Each of these persons exercises independent judgment in trading, and
readers are urged to exercise their own judgment in trading. © by MF Global Inc. (2010) 440 S Lasalle Street Chicago, Illinois, 60605.

mfglobal.com
2/17/2011 LME METALS DAILY REPORT

US industrial production numbers were also released on Wednesday, with December's output falling by .1%, and coming in
worse than expected. However, December's readings were revised higher to a 1.2% gain from an earlier estimate of .8%.
The January decrease was not entirely unexpected given the poor weather that gripped much of the nation last month.
Capacity utilization also fell slightly, dipping to 76.1% from a revised 76.2% the previous month. Despite the overall fall,
manufacturing production was up 0.3% in January, with the year-over-year increase now at 5.5%.

Housing data showed that construction of homes and apartments rose almost 15% from a month earlier to a seasonally
adjusted annual rate of 596,000, slightly higher than estimated. However, new building permits, a gauge of future
construction fell 10.4%, wiping out most of the 15.3% gain seen in the previous month.

Finally, minutes released by the Federal Reserve showed that officials were slightly more optimistic about the US economic
outlook than they were a month ago, but not upbeat enough to call for an early end to their quantitative easing program.
Although the economy looks a bit stronger to the Fed, officials expect the unemployment rate to remain high. The minutes
reveal that the central bank expects US GDP to increase between 3.4%-3.9% this year, about .3% higher then the November
forecast.

Later today, we get January CPI (expected up .3%), weekly initial claims (expected at 410,000), the January index of leading
indicators (expected at .2%), and the February Philadelphia Federal Reserve business index (expected at 21.9).

In other news, Goldman Sachs will close its "global macro proprietary trading" desk soon, the WSJ reported on Tuesday.
“Keeping the prop business going will have little benefit and closing it will be seen as a positive move to comply with Dodd-
Frank,” an equity analyst remarked.

At the end of our report, we run inventory charts for all the base metals, both on the LME and in Shanghai.
----------------------------------------------
COPPER SUPPORT: $9650 / RESISTANCE: $10190

We are now at $9,783, down $59, but as our chart below shows, the sell-off so far has been modest enough to keep the
upward trend-line largely intact—although just barely. A sell-off to $9650 could lead to a break in the line, and likely trigger
much heavier selling.

The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. MF Global Inc.
does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this
date and are subject to change without notice. The principals of MF Global and others associated or affiliated with it may recommend or have positions which
may not be consistent with the recommendations made. Each of these persons exercises independent judgment in trading, and readers are urged to exercise
their own judgment in trading. © by MF Global Inc. (2010) 440 S Lasalle Street, Chicago, Illinois, 60605.
2/17/2011 LME METALS DAILY REPORT

* The global copper market was in a small surplus of 20,000 tons in 2010, narrowing from a surplus of 410,000 tons during
2009, the World Bureau of Metal Statistics said on Wednesday. During 2010, refined production rose to 19.25 million tons,
up 3.2 per cent compared to the same period in 2009. Chinese output rose by 464,000 tons, while Chilean metal production
fell by 55,000 tons to 3.22 million tons. Consumption, on the other hand, was 19.23 million tons in 2010, up from 18.24 million
tons in the previous year, WBMS said in a statement. World copper mine output in January to December was 16.04 million
tons, up 1.5 percent from year-ago levels.

* Hedge fund Red Kite thinks the record highs in copper are unsustainable and prices need to fall 20% or so to attract the
Chinese back into the market, a senior official at the fund's China joint venture said on Wednesday.

* BHP Billiton announced underlying profits of $17.3 billion for the six months until Dec. 31, with a 59.7% year-on-year rise in
profits on account of higher commodity prices and improved demand. The company expects a modest downturn in the growth
rate of global commodity demand this year despite a strong near-term outlook for its products. BHP plans to invest over $80
billion on organic growth until the end of 2015, including spending on coal and iron ore developments, the company said.
--------------------
ALUMINUM SUPPORT: $2470 / RESISTANCE: $2570

We are now at $2502 on ali, down $2. Prices seem to be trading within a $100 range of between $2470-$2570.

* Norsk Hydro expects Chinese aluminum consumption to grow by 10% this year, due to the country’s widespread use
of the metal in transport and packaging. "We see demand within packaging quite stable, increasing," the company’s chief
executive told Reuters.

* The World Bureau of Metal Statistics said on Wednesday that primary aluminum market was in a surplus of 558,000
tons, compared to a surplus of 1.84 million tons in 2009.
----------------------------
ZINC SUPPORT: $2320 / RESISTANCE: $2540

We are at $2485 on zinc, down $1. We did near resistance at $2540 again today, but have backed off once again. Charts
continue to show a sideways drift.

* The World Bureau of Metal Statistics said that the zinc market was in surplus by 341,000 tons in 2010, rising from a
surplus of 248,000 the year before.
----------------------------
LEAD SUPPORT: $2520 / RESISTANCE: $2712

We are at $2577, down $15/MT; another close below $2600 today likely suggests that the earlier breakout may not have had
legs, and prices could instead work lower. We see trend-line support around $2520, as our chart on the next page shows.

The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. MF Global Inc.
does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this
date and are subject to change without notice. The principals of MF Global and others associated or affiliated with it may recommend or have positions which
may not be consistent with the recommendations made. Each of these persons exercises independent judgment in trading, and readers are urged to exercise
their own judgment in trading. © by MF Global Inc. (2010) 440 S Lasalle Street, Chicago, Illinois, 60605.
2/17/2011 LME METALS DAILY REPORT

* The World Bureau of Metal Statistics said that the global lead market last year was in deficit by 19,000 tons in 2010
compared with a deficit of 79,000 tons in 2009,
----------------------------

NICKEL SUPPORT: $23,600 / RESISTANCE: $30,000

Nickel is at $28,320, down $255; the uptrend still seems to be intact, but we think prices will have trouble getting past $30,000
resistance.

* Nickel prices will decrease during in the second half of this year to an average of $24,000 a ton and continue to fall in 2012
to an average of $19,500 as the market becomes oversupplied the chief nickel analyst at GFMS said. China will continue to
lead nickel demand, which will likely grow by 12% to 620,000 tons in 2012 compared with 2010.

* The World Bureau of Metal Statistics said that the nickel market was in a surplus by 3,000 tons in 2010, down from a
36,600 surplus the year before.
--------------------
TIN SUPPORT: $30,000 / RESISTANCE: $35,000

Tin is at $31,450, down $1050, and finally undergoing a decent correction. We suspect we are moving a little lower from here,
before some buying sets in.

* The World Bureau of Metal Statistics said that the tin market was in an 18,300 deficit in 2010 compared a surplus of
10,200 tons the year e before.

The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. MF Global Inc.
does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this
date and are subject to change without notice. The principals of MF Global and others associated or affiliated with it may recommend or have positions which
may not be consistent with the recommendations made. Each of these persons exercises independent judgment in trading, and readers are urged to exercise
their own judgment in trading. © by MF Global Inc. (2010) 440 S Lasalle Street, Chicago, Illinois, 60605.
 Tons
Copper Stocks Tons
Ali Stocks
600000 5000000
550000
4500000
500000

450000 4000000

400000 3500000
350000
3000000
300000

250000 2500000

LME Stocks LME Stocks

Tons
Nickel Stocks Tons
Zinc Stocks
180000 800000

160000 700000

140000 600000

120000 500000

100000 400000

80000 300000

LME Stocks LME Stocks

Lead Stocks Tons

Tin Stocks
Tons
300000 32000

260000 28000

220000 24000

180000 20000

140000 16000

100000 12000

60000 8000

20000 4000

LME Stocks Series1

This report is issued by MF Global UK Limited ("MFG") which is authorised and regulated by the Financial Services Authority. The report was prepared
and distributed by MFG for information purposes only. The report contains information and opinions, which may be used as the basis for trading
undertaken by MFG and its officers, employees and associated companies. The report should not be construed as solicitation nor as offering advice for
the purposes of the purchase or sale of any security, investment, or derivative. The information and opinions contained in the report were considered by
MFG to be valid when issued. The report also contains information provided to MFG by third parties. The source of such information will usually be
disclosed in the report. Whilst MFG has taken all reasonable steps to ensure this information is correct, MFG does not offer any warranty as to the
accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at their own risk and MFG
does not accept any liability as a result. Securities and derivatives markets may be subject to rapid and unexpected price movements and past
performance is not necessarily a guide to future performance. Registered Office : MF Global UK Limited, Sugar Quay, Lower Thames Street, London,
EC3R 6DU. Registered in England No. 1600658
 Shanghai Exchange Stocks Shanghai Exchange Zinc Stocks
Tons
600000
350000
500000
300000
400000
250000
300000 200000

Tons
200000 150000
100000 100000
0 50000

Copper Aluminium

This report is issued by MF Global UK Limited ("MFG") which is authorised and regulated by the Financial Services Authority. The report was prepared
and distributed by MFG for information purposes only. The report contains information and opinions, which may be used as the basis for trading
undertaken by MFG and its officers, employees and associated companies. The report should not be construed as solicitation nor as offering advice for
the purposes of the purchase or sale of any security, investment, or derivative. The information and opinions contained in the report were considered by
MFG to be valid when issued. The report also contains information provided to MFG by third parties. The source of such information will usually be
disclosed in the report. Whilst MFG has taken all reasonable steps to ensure this information is correct, MFG does not offer any warranty as to the
accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at their own risk and MFG
does not accept any liability as a result. Securities and derivatives markets may be subject to rapid and unexpected price movements and past
performance is not necessarily a guide to future performance. Registered Office : MF Global UK Limited, Sugar Quay, Lower Thames Street, London,
EC3R 6DU. Registered in England No. 1600658