EDWARD MEIR: + 1-203-656-1143

Senior Commodity Metals Analyst

Email: emeir@mfglobal.com

FRIDAY FEBRUARY 25, 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. 24 (000) (000) MAV MAV MAV
CU 9505 9350 9502 +2 +75 416,825 (+4150) 9650 10190 42 175 297 9796 9681 9032

AL 2550 2519 2541 -30.5 -69 4610875 (-4625) 2470 2570 56 179 704 2528 2492 2414

PB 2499 2460 2500 +1.25 +47 294,575 (+250) 2450 2712 45 32 108 2596 2558 2467

ZN 2473 2436 2473 -29 -40 708,375 (-50) 2320 2600 51 85 237 2508 2440 2376

NI 27850 27325 27505 -27 +950 130,422 (+780) 23600 30000 48 30 101 28629 26839 24881

SN 31650 31200 31650 -42 +295 17,630 (+100) 30000 35000 57 9.5 20 32035 29245 27241

NAA 2560 2506 2560 -15.5 -40.25 136,600 (-100) NA NA 61 1.8 7.5 2527 2459 2361
Shanghai Nearby Last (YUAN) 72,590 (+1170) 17,095 (+40) 19,250 (+110) LME/SHAN CU
Shanghai Stocks as of Feb 25 CU: 158,101 MT(-2961) AL: 423,890 MT (-3088) ZN: 335,096 (+2794) ARB: NA

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 8:50 a.m. on February 25th, US east coast time...

Copper snapped a three-day losing streak yesterday and ended slightly higher, as a sizable retreat in oil prices off their
intraday high of $119.70 (on Brent) stabilized both metals and US stocks to a sizable extent. In fact, for most of this week, we
have seen a noticeable decoupling between metals and energy; as energy prices moved higher, the latter pulled back as
implications of higher inflation and interest rates were perceived to be a negative for metals demand. On the other hand, oil
price pullbacks have had the opposite effect, and we are seeing more evidence of this today; with oil prices now down, a
decent rally has set in over the copper complex, while the rest of the group is also seeing modest gains.

In other markets, the dollar is slightly stronger today, and back under the $1.38 mark against the euro, while gold prices are
steady. US stocks are expected to open slightly higher.

The situation in Libya seems to be careening towards some sort of climax, although in fits and starts. The Libyan leader finds
himself increasingly isolated, (and was even rumored to have been shot yesterday) as more members of his regime desert
him and as more cities fall to the rebels. In addition, the rebels are much better organized now, relatively well armed, and
apparently plotting to take over Tripoli. By early next week, the game could be up for the clearly deranged Muammar
Ghaddafi. On the oil side, the Saudis have ring-fenced the potential damage emanating from this crisis by taking clear steps
to step up production. Part of the problem here is that Libyan oil is of the "sweet" variety and not compatible with most Saudi

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
2/25/2011 LME METALS DAILY REPORT

grades, but the Saudis have reassured European refiners that they would be able to offer an equivalent amount of “Arab
Extra Light”, which is close in composition, or failing that, blend some of other grades to get the desired purities. In terms of
the latest on Libyan oil flows, assessments vary depending on the source. The IEA says for example, that anywhere between
500,000-750,000 barrels/day of oil is not flowing out, while Italy’s ENI, one of Libya's largest customers, says about 1.2
million barrels/day-- practically all of the country’s exports-- is shut down. We assume the higher number is more accurate,
given that ports and terminals in the country are not operational as well, although most are in rebel hands.

Going into next week, we suspect that downward pressure on oil markets will likely continue, particularly as investors start to
discount the likely fall of the Libyan leader. This, as we mentioned earlier, should provide a measure of support to both the
metals and US equity markets, at least until the next flashpoint appears on the radar.

In terms of macro news, US new home sales came out at 284,000 units (annualized) yesterday and well below estimates.
January durable goods orders also was reported yesterday, rising 2.7%, and in line with estimates. Weekly initial claims
broke below the 400,000 mark, and came in well below estimates. Later today, we get a second revision to fourth-quarter US
GDP, expected at 3.3%, and slightly higher than the previous reading. February Michigan consumer confidence readings are
out later in the day as well (expected at 75.1), and pretty much unchanged from last month.

Out of Europe, it was also reported that the British economy shrank more than initially estimated in the fourth quarter, dipping
by 0.6% vs. the 0.5 drop reported earlier. The slump was generated mainly by declining construction and investment.
-----------------
COPPER SUPPORT: $9200 / RESISTANCE: $10190

We are at $9654, up $152, close to our highs for the day, and apparently shrugging off the rather significant 4150 ton stock
increase reported overnight on the LME. Shanghai stocks offset some of that, down almost 3000 tons, their first decline in
several weeks. We expect prices to do somewhat better going into the early part of next week, as energy prices start to recede
once the Libyan situation approaches some sort of closure.

* Japan's output of rolled copper product declined for the first time in 15 months in January from a year earlier, with output
down by 1.3% to 70,339 tons on a seasonally adjusted, this according to preliminary data from the Japan Copper and Brass
Association.
-----------------------------------
ALUMINUM SUPPORT: $2470 / RESISTANCE: $2570

We are now at $2562 on ali, up $21. The complex has seen an impressive recovery, with prices moving towards resistance at
$2570.

* Premiums for physical aluminum in Europe slipped this week from record highs Reuters reports, with duty-paid metal in at
$190-205 over, down from $200-210 seen last week. Duty-unpaid was fetching $127-145 a ton, well below the record high of
$170 hit in June 2010.
----------------------------
ZINC SUPPORT: $2320 / RESISTANCE: $2600

We are at $2482 on zinc, up $9.

--------------------------------------------------
LEAD SUPPORT: $2450 / RESISTANCE: $2712

We are at $2488 on lead, down $12/MT, as the complex continues to struggle. The $2450 support level was breached earlier
today, but prices snapped back shortly afterwards.

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.
2/25/2011 LME METALS DAILY REPORT

* Global demand for lead-acid batteries may rise 2.6% this year amid increased car sales in China, India, and Southeast
Asia, an executive at GS Yuasa told Bloomberg today.
------------------------------------------------
NICKEL SUPPORT: $23,600 / RESISTANCE: $30,000

Nickel is at $27,770, up $265, and recovering some of this week’s earlier losses.
--------------------------------------------------
TIN SUPPORT: $30,000 / RESISTANCE: $35,000

Tin is at $31,700, up $50.

* Indonesia's PT Timah said Friday that first quarter production would be lower than expected because of rains and rough
seas. However, a pickup in output is expected in April, as calmer weather would allow more offshore dredging.

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.