Commodities Monthly

Will oil kill the recovery?

29 FEBRUARY 2012

Commodities Monthly

Will oil kill the recovery?

GENERAL

0-3 M

4-6 M

7-12 M

UBS Bloomberg CMCI Sector Indices

(price indices, weekly closing, January 2010 = 100)
1 80 1 70 1 60 1 50 1 40 1 30 1 20 1 10 1 00 90 jan-10 fe 0 b-1 m ar-10 a pr-10 m aj-10 jun-10 jul-10 a ug-10 sep-10 o kt-10 no 0 v-1 d ec-10 jan-11 fe 1 b-1 m ar-11 a pr-11 m aj-11 jun-11 jul-11 a ug-11 sep-11 o kt-11 no 1 v-1 d ec-11 jan-12 fe 2 b-1
YT (% D ) M (% /M ) C m ditie om o s

A rapidly increasing oil price is beginning to threaten prospects for recovery and better growth. Paradoxically, recent rises are largely due to improving economic sentiment but also tight supply. In addition, outstanding geopolitical issues present further major upside risks. The US economy continues its gradual recovery, European tail risks have decreased with the second Greek bailout package almost in place, while China has taken steps to ease its monetary policy.

Indu strial M tals e Pre cious M tals e En y erg Ag ricultu re

ENERGY

0-3 M

4-6 M

7-12 M

We revise our average 2012 Brent price forecast upward from $114/b to a conservative $118/b with risk skewed to the upside. Crude oil prices have moved higher due to more optimistic macroeconomic signals driving increasingly positive growth expectations, and tight supply following several disruptions. With Iran unwilling to return to the negotiating table or allow inspections an early solution to the present nuclear crisis seems unlikely.

80

Sector performance over the last month Sector

(MSCI World, UBS Bloomberg CMCI price indices)
1 6 1 5 1 4 1 3 1 2 1 1 1 0 9 8 7 6 5 4 3 2 1 0 -1

INDUSTRIAL METALS

0-3 M

4-6 M

7-12 M

We remain cautious regarding the industrial metals sector. Tail risks have decreased but remain significant. The recent rally has mainly reflected the increasing likelihood that China is heading for a soft landing, and the beginnings of a monetary easing cycle. However, despite our still bullish long-term view, we expect further volatility due to significant stresses within the Chinese economy and other threats to global growth.

Our bullish view on the gold market has moderated significantly because economic tail risks continue to decrease, it is becoming harder for efforts to increase liquidity to exceed market expectations, and inflation projections remain subdued. We revise our 2012 average price forecast downward to $1800/ozt but still expect new highs later this year before the post-2008 rally finally comes to an end. Over the long term, we do not expect the gold price to collapse as liquidity is likely to remain high, Asian demand growth strong and mine supply growth weak.

Winners & Losers last month

(%)
18 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10

AGRICULTURE

0-3 M

4-6 M

7-12 M

Chart Sources: Bloomberg, SEB Commodity Research

Arrows indicate the expected price action during the period in question.

N t. gas (U ) a S N ickel C offe (A r.) C otton Tin Zinc P er (N ow ordic) Lead W at he C oppe r C coa (U ) o S C orn P alladium G old A inium lum S teel b illets Po e (C t.) w r on Silver Platinum S oybeans G asoline (U ) S H t. oil (U ) ea S W TI S r uga Bren t C 2 (EU ) O A

With the exception of soybeans, which remain affected by drought, the rebound in the grains complex appears to have lost steam suggesting the imminent resumption of a bearish trend. The outlook for corn production and consumption is becoming increasingly bearish. La Nia forecasts continue to suggest conditions will normalize by summer. Current strong incentives to boost production include more normal weather conditions and still high prices generally.

Agricu re ltu

Ind ustria l m ls eta

Eq uitie s

En y erg

Pre ciou s m ls eta

PRECIOUS METALS

0-3 M

4-6 M

7-12 M

Commodities Monthly

General
The high oil price is rapidly becoming a threat to global growth and recovery. Most recent increases have been due to improved economic sentiment attributable to better than expected US data underlining the countrys continued recovery and the neutralization of much of Europes credit crunch risk by the ECBs 489bn LTRO operation in December. In addition, it is due to a physically tight oil market with disappointing gains in non-OPEC production. Consequently, we see substantial upside oil price risk in the event of additional supply disruption resulting, for example, from the Iranian nuclear issue. The OECDs Composite Leading Indicators (CLI) either improved or declined less rapidly in the February release. They still point to below trend growth in six months in most countries although the recent deterioration in CLIs in many countries may be coming to an end. Only Japan, Russia and the US posted CLIs signalling above trend growth while China was the only country that deteriorated more rapidly. Since our previous report the CMCI commodity price index has increased 5.8%, economic sentiment improved, equity prices risen and the USD depreciated. Precious metals performed best gaining 8.9% due to improved liquidity provisions following the ECB LTRO in December with more to come at the end of February, a weaker USD and some risk aversion resulting from the situation in Iran. The energy index gained almost as much (+8.8%) in response to a fundamentally tight market, US growth optimism and increasing MENA risk. Industrial metals and agricultural products increased least with respective gains of 4.1% and 3.5%. Being closely matched by a USD index decrease of 3.5%, both were largely unchanged in real terms. Industrial metals remain relatively hesitant due to developments in China. The countrys manufacturing levels look set to decrease for a fourth consecutive month in February, with slowing exports to struggling Europe and a cooling Chinese housing market. As expected Reserve Requirement Ratios for large Chinese banks were reduced on February 24 to 20.5% to bolster the economy. In addition curbs on bank lending to Chinese Special Purpose Vehicles (SPV) were lifted at the end of February. More than 6000 such SPVs hold most of the $1.7 trillion in debt acquired by local governments after the financial crisis, of which 70% is expected to mature by 2015.

UBS Bloomberg CMCI

(price index, weekly closing)

10 80 10 70 10 60 10 50 10 40 10 30 10 20 10 10 10 00 90 0 80 0 70 0 60 0 50 0 40 0 30 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 01 21 02

JPM global manufacturing PMI

(monthly, PMIs >50 expansive)
6 5 6 0 5 5 5 0 4 5 4 0 3 5 3 0 20 05 20 06 20 07 20 08 20 09 21 00 21 02

OECD composite leading indicators

(monthly, 100 corresponds to long term trend growth in industrial production)
15 0 14 0 13 0 12 0 11 0 10 0 9 9 9 8 9 7 9 6 9 5 9 4 9 3 9 2 9 1 9 0 8 9 8 8 20 05 20 06

C in h a Eu zo e ro n O D EC U SA R fe n e re ce

20 07

20 08

20 09

21 00

Chart Sources: Bloomberg, SEB Commodity Research

21 01

Commodities Monthly

Crude oil
A wide range of supportive factors have pushed crude oil prices towards $130/b. On the supply side several issues have taken hundreds of thousands of barrels off the market. In addition, the Iranian embargo is exerting pressure on supply expectations going forward. In terms of demand a number of factors are also increasing expectations. US economic conditions remain stable and the Fed dovish; Chinese monetary policy is loosening; while European tail risk is moderating as a result, for example, of the Long Term Refinancing Operation (LTRO). Due to the more bullish overall picture we revise our Q1 average price forecast from $110/b to $120/b. We also make a conservative upward increase for Q2 from $110/b to $115/b. Our Q3 and Q4 forecasts remain at $115/b and $120/b respectively as current events have so far had little impact that far into the future. Our full year average price forecast is therefore $118/b, which we regard as a conservative estimate. Currently, risk appears skewed to the upside though several threats to global growth remain including high energy prices. Since the European embargo against Iranian crude oil was agreed in late January Brent crude has rallied strongly. The immediate ban on new contracts and the cancellation of old ones from July 1 has clearly exerted additional pressure on market balance expectations while further stimulating what was initially a demand driven rally as consumers race to secure supplies. With Asian countries likely to join in cutting imports going forward, barrels will begin disappearing from the market fairly quickly. The unwillingness of Iran to negotiate or allow inspections signals the improbability of a quick solution. So far the IEA has remained silent regarding the release of strategic petroleum reserves although they could clearly come into play at any time as the supply disruption release criterion has already been fulfilled. The most logical time for the actual release is when the embargo reaches its full extent this summer. Considering the wide range of supply issues operating at present, the Iranian embargo comes at a very bad time. Supply from South Sudan, Syria and Yemen are down, Libya has not yet restored its pre-war capacity while unrest remains widespread in both the MENA region and Nigeria. In addition, North Sea deliveries continue to disappoint. In total, hundreds of thousands of barrels are absent from the market. When Saudi Arabia replaces the rejected Iranian barrels, reserve capacity will again have reached uncomfortably low levels, leaving the oil market almost entirely without a spare capacity buffer to handle additional supply disruptions or a further increase in global growth expectations.

Crude oil price

(NYMEX/ICE, $/b, front month, weekly closing)
10 5 10 4 10 3 10 2 10 1 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01
n d

N M WI Y EX T IC Bre t E n

US crude oil inventories

(DOE, mb, weekly data)
37 5 37 0 36 5 36 0 35 5 35 0 34 5 34 0 33 5 33 0 32 5 32 0 31 5 j f m a m j j a s o 20 07-2011 av . g 20 11 20 12

Chart Sources: Bloomberg, SEB Commodity Research

Current global crude oil demand estimates

2011 (mb/d) 89.1 87.93 87.82 Revision (kb/d) +100 -180 -20 2012 (mb/d) 89.9 89.25 88.76 Revision (kb/d) -150 -130 -140

IEA EIA OPEC

SEB average Brent crude oil price forecast

($/b) 2012 2013 Q1 120 Q2 115 Q3 115 Q4 120 Full Year 118 120

21 02

Commodities Monthly

Energy
WTI futures curve
(NYMEX, $/b)
11 1 10 1 19 0 18 0 17 0 16 0 15 0 14 0 13 0 12 0 11 0 10 0 9 9 9 8 9 7 9 6 9 5 9 4 9 3 9 2 9 1 9 0 o 2 kt-1 o 3 kt-1 a r-1 p 2 a r-1 p 3 a r-1 p 4 ja -1 n 3 ja -1 n 4 ju 2 l-1 ju 3 l-1 ju 4 l-1 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

Brent futures curve

(ICE, $/b)
16 2 14 2 12 2 10 2 18 1 16 1 14 1 12 1 10 1 18 0 16 0 14 0 12 0 10 0 9 8 9 6 9 4 9 2 o 2 kt-1 o 3 kt-1 o 4 kt-1 a r-1 p 2 a r-1 p 3 a r-1 p 4 ja -1 n 3 ja -1 n 4 ju 2 l-1 ju 3 l-1 ju 4 l-1 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

o 5 kt-1

a r-1 p 5

o 4 kt-1

o 5 kt-1

a r-1 p 5

Gasoline and heating oil prices

(NYMEX, /gal, front month, weekly closing)
40 5 40 0 30 5 30 0 20 5 20 0 10 5 10 0 5 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 N EXG so e YM a lin N EXH a g o YM e tin il

a r-1 p 6

Gasoline and distillate inventories

(DOE, mb, weekly data)
20 5 20 4 20 3 20 2 20 1 20 0 10 9 10 8 10 7 10 6 10 5 10 4 10 3 10 2 10 1 j f m a m j j a s o n d G so e 2 0 -2 1 a g a lin 0 7 0 1 v . G so e 2 1 a lin 0 2 D istilla fu l o 2 0 -2 1 a g te e il 0 7 0 1 v . D istilla fu l o 2 1 te e il 0 2

US natural gas prices

(NYMEX, $/MMBtu, front month, weekly closing)
1 5 1 4 1 3 1 2 1 1 1 0 9 8 7 6 5 4 3 2 1 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02

US natural gas futures curve

(NYMEX, $/MMBtu)
5 5 ,2 5 0 ,0 4 5 ,7 4 0 ,5 4 5 ,2 4 0 ,0 3 5 ,7 3 0 ,5 3 5 ,2 3 0 ,0 2 5 ,7 2 0 ,5 n v-1 o 2 n v-1 o 3 n v-1 o 4 m r-1 a 2 m r-1 a 3 m r-1 a 4 m r-1 a 5 n v-1 o 5 2 5 ,2 ju 2 l-1 m r-1 a 6 ju 3 l-1 ju 4 l-1 ju 5 l-1 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

Chart Sources: Bloomberg, SEB Commodity Research

a r-1 p 6

ja -1 n 5

ja -1 n 5

ja -1 n 6

ja -1 n 6

ju 5 l-1

ju 5 l-1

Commodities Monthly

Nordic power
Nordic power price
Last month we focused on available Swedish nuclear capacity, the hydro balance and, most importantly, temperatures. Currently, that capacity is operating at around 75%, albeit an improvement since January. The hydro balance surplus has decreased to around +10-12 TWh which we regard as fairly insignificant surplus. Going forward it may either swing rapidly into deficit or produce a significant surplus within a matter of weeks. Recently, when temperatures fell below normal, prices immediately sky-rocketed. We have highlighted this upside risk several times already. The delicate equilibrium between nuclear capacity, the hydro balance and temperature is the key to pricing currently. For example, colder weather will generate higher consumption resulting in greater hydro generated production which in turn weakens the hydro balance. The February system spot price averaged EUR 49.06/MWh with major daily variations because unusually cold temperatures caused prices to spike, particularly in Sweden which already faced problems associated with its nuclear capacity. The highest daily average spot price was EUR 96.15/MWh. Nevertheless, the fairly strong hydro balance led to prices falling as low as EUR 30.90/MWh with lowest values posted on weekend loads and when temperatures were above normal. Stockholm and Helsinki price areas both settled with respective premiums vs. system at EUR 50.80 and EUR 52.81/MWh in February. The long end of the forward market traded fairly flat in February while the short end was heavily influenced by the shift fundamentals. Weekly contracts generally rose sharply before coming off again later in the month. On February 28, Q2-12 settled lower at EUR 34.30 /MWh while Cal-13 settled largely unchanged at EUR 41.85 /MWh. We regard the short end as fairly priced but see good buying opportunities in contracts far out on the forward curve.
(Nord Pool, /MWh, front quarter, weekly closing)
8 0 7 5 7 0 6 5 6 0 5 5 5 0 4 5 4 0 3 5 3 0 2 5 2 0 20 06 20 07 20 08 20 09 21 00 21 01 21 02

Continental power price

(EEX, /MWh, front quarter, weekly closing)
9 5 9 0 8 5 8 0 7 5 7 0 6 5 6 0 5 5 5 0 4 5 4 0 3 5 3 0 2 5 2 0 20 06 20 07 20 08 20 09 21 00 21 01 21 02

EUA price
(ECX ICE, /t, Dec. 12, weekly closing)
3 5

3 0

2 5

2 0

1 5

1 0

5 20 06 20 07 20 08 20 09 21 00 21 01 21 02

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Industrial metals
We do not believe the rally in industrial metals over the last few months represents a decisive break higher in 2012. Clearly however, the combined effect of a continued US recovery, Greece being well on the way towards securing a second bailout package, and most importantly the reserve ratio requirement cuts that have occurred in China has sent the LME index almost 20% higher. Nevertheless, while positive signals dominate at present, it would be unrealistic not to anticipate at least temporary setbacks to affect one or several of these issues before growth expectations finally stabilize. We do not expect this to happen before the second half of this year and therefore continue to recommend a cautious short term approach to the sector. Investors should aim to sell on rallies and buy on dips. Our long term expectations remain bullish though the ride is likely to remain bumpy in the short- to medium-term. In addition to setbacks in Europe, China and possibly the US the negative impact of a geopolitically induced oil price spike presents downside risks to the sector. There is still some way to go before market conditions become more growth focused once again. Chinese authorities may have begun easing monetary policy on a more general basis through bank reserve requirement ratio cuts but both growth and inflation rates remain high and the balance is therefore delicate. Chinese industrial production growth continues to slow but remains impressive at nearly 13% y/y while manufacturing PMI appears to be bottoming around the 50 level. Overall we see few warning signals other than the continued downtrend in the real estate sector. So far, the European recession appears milder than many had feared. While industrial production fell in late 2011 the Eurozone manufacturing PMI has recovered to just below 50. German economic performance remains impressively robust under the circumstances, pulling the rest of the region forward. Following several depressed years, European metal demand is weak. The most positive trend signals emanate from the US where industrial production growth is holding up well above 3% while manufacturing PMI is approaching 55. Excepting copper and tin, LME inventories have been rising over the last few months. Cancelled warrant levels are more mixed with sharp increases in aluminium and copper particularly apparent. While this is mostly attributable to the movement of aluminium between different warehouses, it appears to reflect strong demand for copper, particularly in the US.

LME index
(weekly closing)
40 70 40 50 40 30 40 10 30 90 30 70 30 50 30 30 30 10 20 90 20 70 20 50 20 30 20 10 10 90 10 70 10 50 10 30 10 10 90 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02

Industrial metal prices

(LME, indexed, weekly closing, January 2010 = 100)
20 0 10 9 10 8 10 7 10 6 10 5 10 4 10 3 10 2 10 1 10 0 9 0 8 0 7 0 6 0 Cpe opr N icke l Alu in m m iu Z c in La ed T in

inventory P rice and inventory changes over the last month

(LME)
1 0 8 6 4 2 0 -2 -4 -6 -8 -1 0 Alu in m m iu Cpe opr N icke l La ed Zin c Tin Ste l e -1 2 Price (% ) In e to s (% v n rie )

Chart Sources: Bloomberg, SEB Commodity Research

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2

Commodities Monthly

Industrial metals
Aluminium
LME aluminium inventories rose to a record 5.1 mt in February with the slowdown in demand outstripping production cutbacks. SHFE inventories have also risen. With metal currently being moved between different warehouses as part of various financing transactions, large numbers of cancelled warrants should not be misinterpreted purely as increasing demand. At least 25% of global aluminium production remains unprofitable even after the latest rally. Our long term aluminium market view remains bullish due to structurally rising costs for labour and energy. We expect the aluminium market to become increasingly well balanced this year with destocking progressing relatively well, while restocking looks set to gain momentum.

LME aluminium price and inventories

(weekly data)
5000 500 5000 000 4000 500 4000 000 3000 500 3000 000 2000 500 2000 000 1000 500 1000 000 500 000 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 25 20 20 00 15 70 10 50 15 20 10 00 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis) 30 50 35 20 30 00 25 70 20 50

Copper
LME inventories have continued to decrease sharply as they have since Q4-11. Instead, metal has flowed into Chinese inventories, for example, driving SHFE copper inventories to record highs. Bonded warehouse and industry inventories are also reported to have risen substantially. These developments should be monitored for signs that weak demand is the driver responsible rather than strategic restocking. Since the end of the year, copper speculators at COMEX have turned net long once again. The ICSG reports a refined copper market deficit for January-November 2011 of 291 kt vs. total refined production of 17,897 kt. Mine supply growth remains at zero with a significant market deficit also likely in 2012.

LME copper price and inventories

(weekly data)
1000 000 900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 600 00 500 50 500 00 100 400 100 200 100 000 800 00 600 00 400 00 200 00 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 400 50 400 00 300 50 300 00 200 50 200 00 100 50 100 00 50 00 0 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis) 100 10 100 00 90 00 80 00 70 00 60 00 50 00 40 00 30 00 20 00 10 00

Nickel
LME nickel inventories have trended higher since late 2011 while futures curve backwardation has increased. Opinions concerning the outlook for the nickel balance vary considerably due to major uncertainty regarding the rate at which HPAL capacity will come online. The most bearish scenarios suggest the nickel price may experience some difficulty in remaining above $20000/t due to increased supply, while stronger than expected economic growth and disappointing HPAL supply could drive prices up to $30000/t later this year. Currently, NPI producers suffer from high energy prices and low steel prices. Approximately 50% of capacity has been closed down but could be brought back quickly. Increasing supply is mainly a year-end threat with restocking in China and Europe potentially supportive before then.

LME nickel price and inventories

(weekly data)
100 800 100 600 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis)

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Industrial metals
Zinc Zin c
After decreasing during the second half of 2011, LME zinc inventories have resumed their upward trend, heading towards previous record highs, as have SHFE inventories. According to the ILZSG the refined zinc surplus during 2011 was 353 kt vs. refined production of 13,062 kt, the fifth consecutive surplus year. With production growth significantly outstripping increases in consumption the 2012 surplus could exceed 2011. We believe 2013 could also produce a significant surplus. Zinc remains the least attractive main industrial metal. As relatively high prices risk adding to the surplus, previous lows could be revisited whenever the market turns bearish.

LME zinc price and inventories

(weekly data)
900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 10 30 10 20 10 10 10 00 600 00 500 00 400 00 300 00 200 00 100 00 0 ju 8 l-0 ju 9 l-0 ju 0 l-1 o 8 kt-0 o 9 kt-0 o 0 kt-1 ju 1 l-1 o 1 kt-1 ja -0 n 9 ja -1 n 0 ja -1 n 1 a r-0 p 9 a r-1 p 0 a r-1 p 1 ja -1 n 2 300 60 300 30 300 00 30 00 300 00 20 50 200 50 20 00 200 00 10 50 100 50 10 00 100 00 50 0 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 50 00 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 200 70 200 40 200 10 100 80 100 50 100 20 90 00 60 00 30 00 90 0 80 0 70 0 60 0 50 0 40 0 30 0 20 0 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis) 50 00 40 50 40 00 30 50 30 00 20 50 20 00 10 50 10 00 50 0

Ferrous metals
Since November, iron ore has traded between $130150/t and is currently quoted midrange. Our 2012 forecast remains at $140/t. After falling 10% from its January highs ($470/t) the Turkish scrap trend has turned with prices beginning to increase once again, as also reflected in LME steel billets. With prices of raw materials and some finished steel products improving, we mainly see bullish short term indicators. Conversely, finished steel demand in China remains relatively weak. The Chinese Federation of Logistics and Purchasing (CFLP) reported a new steel PMI at 47.9 in January, indicating a contraction, one we expect will continue at least during the first quarter of this year.

LME steel billet price and inventories

(weekly data)
900 00 800 00 700 00 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis)

LME lead price and inventories

(weekly data)
400 000 350 700 300 500 350 200 300 000 250 700 200 500 250 200 200 000 150 700 100 500 150 200 100 000 700 50 500 00 200 50 0 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis)

LME tin price and inventories

(weekly data)
40 00 400 00 30 50 300 50 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis)

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Industrial metals
Aluminium futures curve
(LME, $/t)
20 70 25 60 20 60 25 50 20 50 25 40 20 40 25 30 20 30 25 20 20 20 25 10 20 10 25 00 20 00 15 90 m r-1 a 2 m r-1 a 3 m r-1 a 4 se -1 p 4 se -1 p 3 se -1 p 2 d c-1 e 2 d c-1 e 3 d c-1 e 4 ju -1 n 2 ju -1 n 3 ju -1 n 4

Copper futures curve

(LME, $/t)
80 60 80 50 80 40 80 30 80 20 80 10 80 00 70 90 70 80 70 70 70 60 70 50 70 40 70 30 70 20 m r-1 a 2 m r-1 a 3 m r-1 a 4 m r-1 a 5 m r-1 a 6 m r-1 a 6 m j-1 a 3 m r-1 a 6 se -1 p 5 se -1 p 5 se -1 p 4 se -1 p 3 se -1 p 2 d c-1 e 2 d c-1 e 3 d c-1 e 4 d c-1 e 5 d c-1 e 5 a r-1 p 3 d c-1 e 5 ju -1 n 2 ju -1 n 3 ju -1 n 4 ju -1 n 5 ju -1 n 5

1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

m r-1 a 5

Nickel futures curve

(LME, $/t)
200 20 280 10 260 10 240 10 220 10 200 10 280 00 260 00 240 00 220 00 200 00 180 90 160 90 140 90 120 90 100 90 180 80 160 80 140 80 120 80 100 80 180 70 160 70 140 70 120 70 se -1 p 4 ju -1 n 4 se -1 p 3 d c-1 e 3 ju -1 n 3 se -1 p 2 d c-1 e 2 ju -1 n 2 m r-1 a 4 m r-1 a 3 m r-1 a 2

se -1 p 5

ju -1 n 5

Zinc futures curve

(LME, $/t)
25 20 22 25 20 20 27 15 25 10 22 15 20 10 27 05 25 00 22 05 20 00 17 95 15 90 12 95 10 90 17 85 15 80 12 85 10 80 17 75 15 70 se -1 p 5 d c-1 e 5 m r-1 a 6 se -1 p 3 d c-1 e 3 ju -1 n 3 se -1 p 2 d c-1 e 2 ju -1 n 2 m r-1 a 2 m r-1 a 3

1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

d c-1 e 4

ju -1 n 5

se -1 p 4

m r-1 a 5

d c-1 e 4

ju -1 n 4

Lead futures curve

(LME, $/t)
25 40 22 45 20 40 27 35 25 30 22 35 20 30 27 25 25 20 22 25 20 20 27 15 25 10 22 15 20 10 27 05 25 00 22 05 20 00 17 95 15 90 12 95 m r-1 a 4 m r-1 a 3 m r-1 a 2 ju -1 n 4 se -1 p 3 d c-1 e 3 ju -1 n 3 se -1 p 2 d c-1 e 2 ju -1 n 2

Tin futures curve

(LME, $/t)
250 40 200 40 250 30 200 30 250 20 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7 200 20 250 10 200 10 250 00 200 00 150 90 100 90 150 80 n v-1 o 2 m r-1 a 5 m r-1 a 6 se -1 p 5 se -1 p 4 d c-1 e 4 d c-1 e 5 m r-1 a 2 m j-1 a 2 fe -1 b 3 100 80 ju -1 n 5 ju 2 l-1 o 2 kt-1 a r-1 p 2 se -1 p 2 ju -1 n 2 ag 2 u -1 m r-1 a 3 d c-1 e 2 ja -1 n 3 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

Chart Sources: Bloomberg, SEB Commodity Research

m r-1 a 4

m r-1 a 5

10

Commodities Monthly

Precious metals
Our previously very bullish gold market view has been downgraded substantially as tail risks in the global economy have decreased in recent months. For gold to move substantially higher from its current level will probably require an unexpected and substantial liquidity injection or indications of increasing systemic risk. As global economic conditions outside Europe have stabilized considerably, and the safety net containing the European debt crisis continues to strengthen gold is much less likely to rally strongly going forward. However, while the post-2009 gold market rally looks increasingly likely to come to an end in 2012, we still expect prices to average above the current level over the year due to accommodative monetary conditions. Our average price forecast for 2012 is currently $1800/ozt with a peak above previous highs ($1900/ozt) likely before prices begin to decrease against the background of an increasingly positive macroeconomic environment. Rallies above previous highs should be regarded as good selling opportunities and may well be proceeded by dips on risk aversion as gold has tended to move in- rather than out of synchronisation with risky assets since the summer of 2011, which is bad news for gold as a form of portfolio diversification. One of the few bullish gold price components that are actually becoming more price supporting is geopolitical. Many gold bullish factors are already fully discounted in the present price. The Federal Reserve is exceptionally dovish on interest rates and is keeping all its options open on QE3. The ECB is also taking a dovish line and continues to inject fresh cash into the European banking system in exchange for questionable collateral (LTRO). Meanwhile Chinese monetary conditions are loosening despite still relatively high inflation. With a wide variety of liquidity initiatives having already been applied worldwide in recent years and with others being planned, and even more promised if needed, liquidity will have a hard time surprising the market on the upside going forward. However, with a significant part of added liquidity stashed away in reserves, future inflation expectations remain subdued. After losing ground in late 2011, gold has, since the beginning of the year, traded at around the same level relative to risky assets such as equities, crude oil and metals. This suggests that although downside risks to the global economy have been decreasing, market conditions remain reluctant to switch to discounting a more growth oriented scenario just yet. From a long term perspective it is interesting to observe that mine supply growth fell sharply in 2011 to end the year lower, which could represent a long term supportive factor.

Precious metal prices

(COMEX/NYMEX, indexed, weekly closing, January 2010 = 100)
20 9 20 8 20 7 20 6 20 5 20 4 20 3 20 2 20 1 20 0 10 9 10 8 10 7 10 6 10 5 10 4 10 3 10 2 10 1 10 0 9 0 8 0 Silv r e Pla u tin m G ld o Pa d m lla iu

Gold to silver ratio

(front month, weekly closing)
8 6 8 2 7 8 7 4 7 0 6 6 6 2 5 8 5 4 5 0 4 6 4 2 3 8 3 4 3 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 C F H

Gold and currencies vs. USD

1 4 1 2 1 0 8 6 4 2 0 -2 -4 -6 G L OD EU R JPY G BP SEK R B U N K O Y D (% T ) M M (% o )

Chart Sources: Bloomberg, SEB Commodity Research

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2

11

Commodities Monthly

Precious metals
Gold
Physical gold ETF holdings rose to record 2398 tonnes in February. Financial speculators are also still building positions in COMEX gold though net speculative long positions still remain low compared to 2010 and 2011 averages. US mint gold coin sales almost doubled in January compared to December last year. At 127,000 ozt they were slight lower than in January 2011 (133,500 ozt), the highest monthly sales volume last year. January often reports seasonally strong coin sales as collectors add new 2012 issues. Gold mine output growth improved in December last year following a weak performance in November but was still down by just over 1% y/y.

Gold price
(COMEX, $/ozt, front month, weekly closing)
20 00 10 90 10 80 10 70 10 60 10 50 10 40 10 30 10 20 10 10 10 00 90 0 80 0 70 0 60 0 50 0 40 0 30 0 20 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 01 21 01 21 02 20 30 25 00 10 80 80 0 70 0 60 0 50 0 40 0 80 0 30 0 20 0 10 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 02 50 5 30 0 15 50 10 30 15 00 21 02

Silver
At 17681 tonnes, physical silver ETF holdings have continued to recover slowly while remaining some way off their record high of 18639 tonnes reported in H1-11. Net long speculative positions in COMEX silver have risen sharply since the year end due to a buildup of longand reduction of short positions, after revisiting 2009 lows in late 2011. Silver has strengthened relative to gold in early 2012 with the gold to silver ratio now standing at 50 compared to an average of 60 and a range of 32-84 over the last decade. US Mint silver coin sales trebled m/m to 6,107,000 ozt in January, the highest level of silver coin sales since last January (6,422,000 ozt).

Silver price
(COMEX, $/ozt, front month, weekly closing)
5 0 4 8 4 6 4 4 4 2 4 0 3 8 3 6 3 4 3 2 3 0 2 8 2 6 2 4 2 2 2 0 1 8 1 6 1 4 1 2 1 0 8 6 4 2 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00

Platinum & Palladium

Both physical platinum and palladium ETF holdings have begun to recover so far this year. Platinum holdings total 43 tonnes, vs. a record 46 tonnes in mid 2011, and palladium holdings 57 tonnes, vs. a record 73 tonnes early last year. At NYMEX speculators are reducing short- and building long positions in both metals, resulting in a sharp rise in net speculative length. Relative to historical positioning speculators are considerably more long platinum than palladium. Compared to the start of the year, the platinum vs. gold price differential has narrowed while that of palladium has remained largely unchanged.

Platinum and palladium prices

(NYMEX, $/ozt, front month, weekly closing)
10 10 10 00 90 0 Pa d m (le a lla iu ft xis) Pla u (rig t a tin m h xis)

Chart Sources: Bloomberg, SEB Commodity Research

12

Commodities Monthly

Precious metals
Gold futures curve
(COMEX, $/ozt)
12 95 10 90 17 85 15 80 12 85 10 80 17 75 15 70 12 75 10 70 17 65 15 60 12 65 10 60 17 55 15 50 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

Silver futures curve

(COMEX, $/ozt)
3 ,0 6 3 ,0 5 3 ,0 4 3 ,0 3 3 ,0 2 3 ,0 1 3 ,0 0 2 ,0 9 2 ,0 8 2 ,0 7 2 ,0 6 ju -1 n 2 ju -1 n 3 ju -1 n 4 se -1 p 2 d c-1 e 2 ju -1 n 5 se -1 p 3 d c-1 e 3 se -1 p 4 d c-1 e 4 se -1 p 5 m r-1 a 2 m r-1 a 3 m r-1 a 4 m r-1 a 5 d c-1 e 5 m r-1 a 6 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

Palladium futures curve

(NYMEX, $/ozt)
70 1 75 0 70 0 65 9 60 9 65 8 60 8 65 7 60 7 65 6 60 6 65 5 60 5 65 4 60 4 m r-1 a 2 se -1 p 2 ju -1 n 2 1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

a r-1 p 2 ju 2 l-1 o 2 kt-1 ja -1 n 3 a r-1 p 3 ju 3 l-1 o 3 kt-1 ja -1 n 4 a r-1 p 4 ju 4 l-1 o 4 kt-1 ja -1 n 5 a r-1 p 5 ju 5 l-1 o 5 kt-1 ja -1 n 6 a r-1 p 6 ju 6 l-1 o 6 kt-1 ja -1 n 7 a r-1 p 7 ju 7 l-1 o 7 kt-1

Platinum futures curve

(NYMEX, $/ozt)
13 70 11 70 19 60 17 60 15 60 13 60 11 60 19 50 17 50 15 50 13 50 11 50 19 40 17 40 15 40 13 40 11 40 19 30 17 30 15 30 ju 2 l-1 a r-1 p 2

1 -1 -2 1 2 8 1 -0 -2 2 1 7 1 -0 -2 2 2 7

m r-1 a 3

d c-1 e 2

o 2 kt-1

silver Physical silver and gold ETP holdings

(weekly data, tonnes)
20 40 20 30 20 20 20 10 20 00 10 90 Silv r h ld g / 1 e o in s 0 G ld h ld g o o in s 10 80 10 70 10 60 10 50 ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 10 40

palladium Physical palladium and platinum ETP holdings

(weekly data, tonnes)
7 5 7 0 6 5 6 0 5 5 5 0 4 5 4 0 3 5 3 0 2 5 ja -1 n 0 fe b-10 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe b-11 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe b-12 2 0 Palla m diu Pla u tin m

Chart Sources: Bloomberg, SEB Commodity Research

13

a r-1 p 3

ja -1 n 3

ju -1 n 6

Commodities Monthly

Agriculture
After having temporarily adopted a more cautious short-term position in the grains complex due to supportive weather issues we are once again becoming more negative, reiterating our previous medium- to long term bearish position. Corn remains the Achilles heel of the grains segment although the future market balance appears significantly brighter. Regarding the entire agricultural sector, high prices are stimulating investments and planting on a global scale with generally bearish implications. The two main potential bull triggers affecting the sector are further adverse weather conditions and spiking energy prices. While corn inventory estimates are at a decade low relative to consumption it is very difficult to maintain a bullish outlook at present. Last year, the corn yield was hit both by flooding and drought. Merely resuming normal yield levels would increase US production substantially. In addition, corn acreage is expected to reach post-1940s highs in the US. Production outside the US has continued to trend higher, boosted further by high prices. Another key factor is potentially weaker demand for corn for use in ethanol production. Since the ethanol blending subsidy was removed US ethanol inventories have sky-rocketed to record levels. The lifting of import tariffs has also paved the way for competition from sugar-based ethanol. In addition, the 2012 renewable fuel production target was exceeded last year. Consequently, there is significant downside potential likely to affect corn demand for use in ethanol production going forward. The wheat market remains well supplied with estimated inventories relative to consumption at their highest level since the early 2000s. Despite low temperatures and limited snow cover in Europe and the FSU raising concerns over yields, the record Australian crop is a reality. With high inventories and relatively low prices the main risk is that planted acreage disappoints. The most supportive fundamentals in the grains complex are to be found in soybeans. Strong Chinese demand, a locally persistent drought in Brazil and related downward revisions of production and inventory estimates remain supportive factors. However, relative to consumption estimated inventories still appear comfortable. Global weather conditions continue to be affected by the La Nia phenomenon. However, there are strong indications that the current weak to moderate event has reached its climax and that conditions will have returned to normal sometime between March and May. Drought conditions in South America, the trigger for the rebound in grain prices in recent months, have eased with similar developments taking place in South Central US.

Grains prices
(CBOT, indexed, weekly closing, January 2010 = 100)
10 9 10 8 10 7 10 6 10 5 10 4 10 3 10 2 10 1 10 0 9 0 8 0 ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 Wet ha So e n yb a s C rn o 0 /0 0 1 0 /0 1 2 0 /0 2 3 0 /0 3 4 0 /0 4 5 0 /0 5 6 0 /0 6 7 0 /0 7 8 0 /0 8 9 0 /1 9 0 1 /1 0 1 7 0 Wet ha So e n yb a s C rn o

Year end grain inventories (days of supply)

(WASDE, yearly data updated monthly)
15 3 15 2 15 1 15 0 9 5 8 5 7 5 6 5 5 5 4 5 1 /1 1 2

revisions Production and inventory estimate revisions

(WASDE, monthly data, %)
6 5 4 3 2 1 0 -1 -2 -3 -4 n v-1 o 1 se -1 p 1 d c-1 e 1 o 1 kt-1 fe -1 b 2 ja -1 n 2 -5 C rn p d ctio o ro u n C rn sto o cks W e t p d ctio h a ro u n W e t sto ha cks So e n p d ctio yb a ro u n So e n sto yb a cks

Chart Sources: Bloomberg, USDA, SEB Commodity Research

14

Commodities Monthly

Agriculture
Corn
Speculators in CBOT corn have been in disagreement since the beginning of the year, with both short and long positions increasing. However, the long term downtrend in net longs appears intact. Demand for US export corn is seasonally normal. With the start of US planting probably due in late March, the market is slowly refocusing on weather conditions in the Midwest which are currently mixed. From a corn-based perspective, South American drought related concerns have eased. Weak US fuel demand in general and the removed ethanol blending subsidy in particular are bearishly impacting US ethanol demand.

Corn price
(CBOT, /bu, front month, weekly closing)
80 0 70 0 60 0 50 0 40 0 30 0 20 0 10 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01
2 011 2 011

Wheat
Speculators have been net short wheat since mid-2011. Like the corn market in early 2012, both short and long positions have increased. Winter wheat remains dormant with some worries related to cold weather in combination with an insufficient protective snow cover in Europe and the FSU as well as continued drought in the US Great Plains. So far, these issues remain of only moderate importance. Due to delivery problems from the Black Sea, US wheat exports have enjoyed an exceptionally strong start to the year.

Wheat price
(CBOT, /bu, front month, weekly closing)
10 20 10 10 10 00 90 0 80 0 70 0 60 0 50 0 40 0 30 0 20 0
2 002 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 010 2 012 2 012

Soybeans
Speculators are also building both long and short positions in soybeans. Net long positions have remained largely unchanged since the year end after increasing in late 2011. US soybean planting starts later than corn. Therefore soybean acreage is often affected positively by adverse conditions during corn planting with farmers sometimes choosing to wait and plant soybeans instead of corn. Brazilian drought conditions remain supportive of the soybean market. US soybean exports began 2012 strongly, indicating solid global demand.

price Soybean price

(CBOT, /bu, front month, weekly closing)
10 80 10 60 10 40 10 20 10 00 80 0 60 0 40 0
2 002 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 010

Chart Sources: Bloomberg, SEB Commodity Research

15

21 02

Commodities Monthly

Agriculture
Corn futures curve
(CBOT, /bu)
66 0 65 0 64 0 63 0 62 0 61 0 60 0 59 0 58 0 57 0 56 0 55 0 54 0 m ar-12 m ar-13 m ar-14 dec-12 dec-13 jun -12 jun -13 sep -12 sep -13 jun -14 625 m 2 ar-1 m 3 ar-1 jun-1 2 sep-1 2 dec-1 2 jun-1 3 sep-1 3 dec-1 3 650 675 700 11 -28 -12 12 -27 -01 12 -27 -02 725 750

Wheat futures curve

(CBOT, /bu)
775 11-1 2-28 12-0 1-27 12-0 2-27

Soybean futures curve

(CBOT, /bu)
1315 1305 1295 1285 1275 1265 1255 1245 1235 1225 1215 1205 1195 1185 jun-12 sep-12 dec-12 jun-13 sep-13 m ar-12 m ar-13 dec-13 m ar-14 11-12-28 12-01-27 12-02-27

Sugar
(NYBOT, /lb)
4 0 3 5 3 0 2 5 2 0 1 5 1 0 5 0 2 02 0 2 03 0 2 04 0 2 05 0 2 06 0 2 07 0 2 08 0 2 09 0 2 10 0 2 11 0 2 12 0

Cotton
(NYBOT, /lb)
2 20 2 00 1 80 1 60 1 40 1 20 1 00 80 60 40 20 2 2 00 2 3 00 2 4 00 2 5 00 2 6 00 2 7 00 2 8 00 2 9 00 2 0 01 2 1 01 2 2 01

Cocoa
(NYBOT, $/t)
3 0 80 3 0 60 3 0 40 3 0 20 3 0 00 2 0 80 2 0 60 2 0 40 2 0 20 2 0 00 1 0 80 1 0 60 1 0 40 1 0 20 2 2 00 2 3 00 2 4 00 2 5 00 2 6 00 2 7 00 2 8 00 2 9 00 2 0 01 2 1 01 2 2 01

Chart Sources: Bloomberg, SEB Commodity Research

16

Commodities Monthly

Commodity related economic indicators

EUROZONE Industrial production (%, YoY) Industrial production (%, MoM) Capacity utilization (%, sa) Manufacturing PMI Real GDP (%, YoY) Real GDP (%, QoQ, sa) CPI (%, YoY) CPI (%, MoM) Consumer confidence USA Industrial production (%, YoY) Industrial production (%, MoM) Capacity utilization (%) Manufacturing PMI Real GDP (%, YoY) Real GDP (%, QoQ, saar) CPI (%, MoM) CPI (%, MoM, sa) OECD Composite Leading Indicator Consumer confidence (Michigan) Nonfarm payrolls (net change, sa, 000) JAPAN Industrial production (%, YoY, nsa) Industrial production (%, MoM, sa) Capacity utilization (%, sa) Manufacturing PMI Real GDP (%, YoY) Real GDP (%, QoQ, sa) CPI (%, YoY) CPI (%, MoM) OECD Composite Leading Indicator Consumer confidence CHINA Industrial production (%, YoY) Manufacturing PMI Real GDP (%, YoY) CPI (%, YoY) OECD Composite Leading Indicator Consumer confidence Bank lending (%, YoY) Fixed asset investment (%, YoY) OTHER OECD Area Comp. Leading Indicator Global manufacturing PMI
Sources: Bloomberg, SEB Commodity Research

Current
-2,0 -1,1 80,0 49,0 0,7 -0,3 2,7 0,3 -20,3 3,4 0,0 78,6 54,1 1,6 2,8 2,9 0,2 103,4 75,3 243 -4,3 3,8 89,4 50,7 -1,0 -0,6 -0,3 0,0 104,9 39,4 12,8 50,5 8,9 4,5 102,3 100,5 15,0 24,9 103,2 51,2

Date
2011-12-31 2011-12-31 2012-03-31 2012-02-29 2011-12-31 2011-12-31 2011-12-31 2011-12-31 2012-02-29 2012-01-31 2012-01-31 2012-01-31 2012-01-31 2011-12-31 2011-12-31 2012-01-31 2012-01-31 2011-03-31 2012-02-29 2012-01-31 2011-12-31 2011-12-31 2011-12-31 2012-01-31 2011-12-31 2011-12-31 2012-01-31 2011-12-31 2011-02-28 2012-01-31 2011-12-31 2012-01-31 2011-12-31 2012-01-31 2011-03-31 2011-12-31 2012-01-31 2011-09-30 2011-03-31 2012-01-31

Previous
0,1 79,6 48,8 1,3 0,1 3,0 0,1 -20,7 3,6 1,0 78,6 53,1 1,5 1,8 3,0 0,0 103,1 75,0 203 -4,2 -2,7 86,7 50,2 -0,5 1,7 -0,4 -0,6 104,2 38,1 12,4 50,3 9,1 4,1 102,1 97,0 15,8 25,6 103,0 50,5

Date
2011-11-30 2011-11-30 2011-12-31 2012-01-31 2011-09-30 2011-09-30 2011-11-30 2011-11-30 2012-01-31 2011-12-31 2011-12-31 2011-12-31 2011-12-31 2011-09-30 2011-09-30 2011-12-31 2011-12-31 2011-02-28 2012-01-31 2011-12-31 2011-11-30 2011-11-30 2011-11-30 2011-12-31 2011-09-30 2011-09-30 2011-12-31 2011-11-30 2011-01-31 2011-12-31 2011-11-30 2011-12-31 2011-09-30 2011-12-31 2011-02-28 2011-11-30 2011-12-31 2011-06-30 2011-02-28 2011-12-31

Next
2012-03-14 2012-03-14 2012-03-01 2012-03-06 2012-03-06 2012-02-29 2012-02-29 2012-02-28

2012-03-16 2012-03-16 2012-03-01 2012-02-29 2012-03-16 2012-03-16 2012-03-16 2012-03-09 2012-02-29 2012-02-29 2012-02-29 2012-03-08 2012-03-02

2012-03-09 2012-03-01 2012-04-13 2012-03-09

17

Commodities Monthly

Performance
Closing last week
UBS Bloomberg CMCI Index (TR) UBS Bloomberg CMCI Index (ER) UBS Bloomberg CMCI Index (PI) UBS B. CMCI Energy Index (PI) UBS B. CMCI Industrial Metals Index (PI) UBS B. CMCI Precious Metals Index (PI) UBS B. CMCI Agriculture Index (PI) Baltic Dry Index Crude Oil (NYMEX, WTI, $/b) Crude Oil (ICE, Brent, $/b) Aluminum (LME, $/t) Copper (LME, $/t) Nickel (LME, $/t) Zinc (LME, $/t) Steel (LME, Mediterranean, $/t) Gold (COMEX, $/ozt) Corn (CBOT, /bu) Wheat (CBOT, /bu) Soybeans (CBOT, /bu)
Sources: Bloomberg, SEB Commodity Research

YTD (%)
8,5 8,5 8,8 9,6 12,7 15,6 3,0 -59,3 9,8 15,6 15,4 12,3 7,7 13,7 0,9 13,2 -0,3 -1,1 7,9

1m (%)
0,2 0,1 1,1 12,1 -7,5 34,3 -11,8 -38,4 26,8 27,5 -4,0 -9,6 -23,9 -7,2 -6,1 34,5 -1,0 -23,7 -7,6

1q (%)
10,4 10,4 10,9 9,4 16,2 6,8 9,1 -59,6 12,2 16,7 17,0 18,1 18,9 9,8 1,9 5,2 10,6 12,4 16,9

1y (%)
-4,3 -4,4 -3,5 3,0 -12,3 23,8 -10,9 -41,4 10,9 10,7 -9,1 -12,5 -28,5 -15,8 -4,4 25,8 -9,5 -16,8 -5,3

5y (%)
26,4 19,3 52,2 46,2 7,0 148,8 71,4 -84,2 76,8 102,5 -19,5 35,7 -51,2 -41,7 N/A 158,4 51,5 33,7 66,1

1376,33 1294,43 1654,16 1635,30 1177,95 2672,69 1798,19 730,00 108,56 124,17 2331,00 8536,00 20155,00 2098,00 535,00 1773,60 644,50 645,75 1293,75

Major upcoming commodity events

Date
Department of Energy, US inventory data American Petroleum Institute, US inventory data CFTC, Commitment of Traders US Department of Agriculture, Crop Progress International Energy Agency, Oil Market Report OPEC, Oil Market Report Department of Energy, Short Term Energy Outlook US Department of Agriculture, WASDE International Grains Council, Grain Market Report OPEC ordinary meeting, Vienna, Austria
Sources: Bloomberg, SEB Commodity Research

Source
www.eia.doe.gov www.api.org www.cftc.gov www.usda.gov www.oilmarketreport.com www.opec.org www.eia.doe.gov www.usda.gov www.igc.org.uk www.opec.org

Wednesdays, 16:30 CET Tuesdays, 22:30 CET Fridays, 21:30 CET Mondays, 22.00 CET (season) March 14 March 9 March 6 March 9 March 29 June 14

Contact list
COMMODITIES
Torbjrn Iwarson RESEARCH Bjarne Schieldrop Filip Petersson SALES SWEDEN Pr Melander Karin Almgren SALES NORWAY Maximilian Brodin SALES FINLAND Jussi Lepist SALES DENMARK Peter Lauridsen TRADING Niclas Egmar

Position
Global Head of Commodities Chief analyst Strategist Corporate Institutional Corporate/Institutional Corporate/Institutional Corporate/Institutional Corporate/Institutional

E-mail
torbjorn.iwarson@seb.se

Phone
+46 8 506 234 01

Mobile

bjarne.schieldrop@seb.no filip.petersson@seb.se par.melander@seb.se karin.almgren@seb.se maximilian.brodin@seb.no Jussi.lepisto@seb.fi peter.lauridsen@seb.dk niclas.egmar@seb.se

+47 22 82 72 53 +46 8 506 230 47 +46 8 506 234 75 +46 8 506 230 51 +47 22 82 72 73 +358 9 616 285 21 +45 331 777 34 +46 8 506 234 55

+47 92 48 92 30 +46 70 996 08 84 +46 70 714 90 79 +46 73 642 31 76 +47 92 45 67 27 +358 40 844 187 7 +45 616 211 59 +46 70-618 560 4

18

Commodities Monthly

DISCLAIMER & CONFIDENTIALITY NOTICE

The information in this document has been compiled by SEB Merchant Banking, a division within Skandinaviska Enskilda Banken AB (publ) (SEB). Opinions contained in this report represent the banks present opinion only and are subject to change without notice. All information contained in this report has been compiled in good faith from sources believed to be reliable. However, no representation or warranty, expressed or implied, is made with respect to the completeness or accuracy of its contents and the information is not to be relied upon as authoritative. Anyone considering taking actions based upon the content of this document is urged to base his or her investment decisions upon such investigations as he or she deems necessary. This document is being provided as information only, and no specific actions are being solicited as a result of it; to the extent permitted by law, no liability whatsoever is accepted for any direct or consequential loss arising from use of this document or its contents. SEB is a public company incorporated in Stockholm, Sweden, with limited liability. It is a participant at major Nordic and other European Regulated Markets and Multilateral Trading Facilities (as well as some non-European equivalent markets) for trading in financial instruments, such as markets operated by NASDAQ OMX, NYSE Euronext, London Stock Exchange, Deutsche Brse, Swiss Exchanges, Turquoise and Chi-X. SEB is authorized and regulated by Finansinspektionen in Sweden; it is authorized and subject to limited regulation by the Financial Services Authority for the conduct of designated investment business in the UK, and is subject to the provisions of relevant regulators in all other jurisdictions where SEB conducts operations. SEB Merchant Banking. All rights reserved.

SEB Commodity Research

Bjarne Schieldrop, Chief Commodity Analyst bjarne.schieldrop@seb.no +47 9248 9230 Filip Petersson, Commodity Strategist filip.petersson@seb.se +46 8 506 230 47

19

www.seb.se