Commodities Monthly

Will the Saudis get their way?

8 MAY 2012

Commodities Monthly

Will the Saudis get their way?

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 m ar-12 a pr-12
YT (% D ) M (% /M ) C m ditie om o s

Chinese manufacturing PMIs have stabilised with improvements increasing the likelihood of a soft landing. Slower food price inflation should provide scope for Chinese authorities to ease monetary policy should it become necessary to support economic growth. Commodity prices remain under pressure from deteriorating economic conditions in the Euro-zone and loss of bullish momentum in the US following disappointing growth and employment data.

Ind ustria M ls l eta Preciou M ls s eta En y erg Ag riculture

ENERGY

0-3 M

4-6 M

7-12 M

OPEC/Saudi Arabia maintains high production (32 mb/d) to drive global crude oil prices downward towards $100/b. Stockpiling by several countries including China, total April outages exceeding 1 mb/d, and low European oil stocks prevented decreases in crude oil prices until poor demand side sentiment in May sent prices down to $112.5/b. We expect Brent crude to rise to $120/b in Q4-12 as macroeconomic conditions improve and growth accelerates.

80

Sector performance over the last month

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

INDUSTRIAL METALS

0-3 M

4-6 M

7-12 M

We remain long-term bullish and short- to medium-term opportunistic with regards to industrial metals. Current downside in aluminium and nickel prices appears relatively limited. The copper market outlook is very complex with apparently substantial upside and downside risks. Prospects for the zinc market are still bleak due to persistent oversupply.

Gold remains in a consolidation pattern with neither bearish nor bullish catalysts. Liquidity will have a hard time surprising on the upside, safe haven demand is lacklustre and inflation expectations are subdued. Considering still present tail risks it is too early to short gold, particularly as low net long speculative positions suggest consolidation may be well advanced. Also, liquidity conditions remain supportive. Platinum and palladium appear increasingly likely to outperform gold going forward.

Winners & Losers last month

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

AGRICULTURE

0-3 M

4-6 M

7-12 M

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

Chart Sources: Bloomberg, SEB Commodity Research

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

We see no reason to revise our medium- to long-term bearish view on grains. Risk is clearly skewed sharply to the downside and the recent rebound has probably run its course. Weather services report that the 2011/2012 la Nia phenomenon appears over with ENSO conditions expected to remain neutral for the rest of the year. Barring additional adverse weather, the supply outlook looks likely to exert significant pressure on grain prices.

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
China appears to be heading for a soft landing according to the latest economic data which show a stable to stronger PMI. Food prices remain unaffected by the drought in South America apart from a 35% increase in soybean prices since last December. We continue to expect lower wheat and corn prices, easing food-related inflation in emerging markets generally, especially in China. Consequently, Chinese authorities should have scope to ease monetary policy should it become necessary to support economic growth. We see little downside in industrial metals prices with many already close to their respective marginal production costs. However, the deteriorating economic situation in Europe combined with a weaker US outlook since Q1-12 is substantially reducing risk appetite, exacerbating negative price pressure on commodities generally, a situation compounded by the knowledge that China is likely to post slower growth in coming years. Still, we believe current energy and metals prices should enjoy attractive upside potential from the end of this year as the Chinese economy improves and the European situation stabilizes. Since our previous Commodities Monthly report on March 27 this year, the CMCI Commodity price index has fallen by 3.6% due to the deteriorating situation in Europe and less optimism in the US. All commodity sectors have fallen back almost uniformly. Industrial metals have declined least (-2.7%) supported by gradually improving sentiment in China where equities rose 4% over the same period. At the same time, precious metals fell by 3.2 per cent and energy and agricultural products by 3.7 per cent. OECD Composite Leading Indicators released at the beginning of April still suggested continued positive momentum and above trend growth in both Japan and the US over the next six months. The outlook for China switched from below trend and deteriorating to above trend and improving, a development reflected in local equity market performance during April. However, Eurozone developments were more mixed. Recent PMI Manufacturing data published at the start of May suggest the Chinese economy should stabilize, confirming the likelihood of a local soft landing. Conversely, European PMIs have continued to deteriorate, particularly in southern Europe. US manufacturing activity still improved in April while US labour market developments have created major concerns.

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)
14 0 13 0 12 0 11 0 10 0 9 9 9 8 9 7 9 6 9 5 9 4 9 3 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 C in h a Eu zo e ro n O D EC U A S R fe n e re ce

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Crude oil
Currently, the greatest uncertainty involves high OPEC production. In Q1-12, a major market surplus appears to have existed with Saudi Arabia, supported by increasing supply from Libya and Iraq, seeking to drive prices downward towards the OPEC basket price target of $100/b. The main reason for doing so is that the Saudis, even more so than anyone else, do not want Iran to possess a nuclear bomb. It is therefore imperative for its leaders that the current embargo on Iranian exports impacts fully, successfully resolving the Iranian nuclear issue. With Saudi Arabia not wanting a high oil price to compensate monetarily for lost Iranian exports, we expect it to continue to drive down prices through overproduction, a strategy bolstered by the anticipated release of OECD Strategic Petroleum Reserves (SPR) which should further increase supply in late Q2 or Q3 this year. These factors together with rising Libyan and Iraqi production and signs that Iran is willing to negotiate once again all exert downward pressure on our mid-year price expectations. The Brent crude oil price was further depressed during April and early May by several negative factors including weak seasonal demand, refinery maintenance, the start of a new round of negotiations with Iran, less positive macroeconomic sentiment, and high OPEC output. Both suppliers and consumers appear to have exploited excessive supplies to build stocks, at least initially undermining the effectiveness of Saudi Arabias attempt to lower prices. Several oil market headwinds have probably peaked and are decreasing as the US driving season approaches, and as refineries begin to ramp up production once again following the end of their traditional maintenance periods. In addition the market remains supported by several supply side issues (e.g. lost production due to the Sudanese civil war (300 kb/d), unrest in Syria and Yemen, North Sea supply disruptions and a faster than expected natural decline in production as well as disputes regarding Kurdish oil payments resulting in supply stoppages). Further, even if Iranian negotiations have restarted, the risk of a geopolitical price spike remains high. It is certainly possible that Iran has only agreed to enter a fresh round of negotiations to win time. Consequently, the situation could easily, and rapidly, deteriorate once again. We hold our Brent crude oil price outlook unchanged with Q2-12 at $115/b, Q3-12 at $115/b and Q4-12 at $120/b ($117/b for the full year). If the macro sentiment stays subdued and Iranian nuclear negotiations do not derail, there is a good chance that Saudi Arabia will be able to push the OPEC basket price towards $100/b. This could however be a reason for Iran to back down from negotiations again since they are in a difficult economic situation and need high oil prices.

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

N M WI Y EX T IC Bre t E n

US crude oil inventories

(DOE, mb, weekly data)
38 0 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 d 200 011 av 7-2 g. 201 1 201 2

Chart Sources: Bloomberg, SEB Commodity Research

Current global crude oil demand estimates

2011 (mb/d) 89.1 87.92 87.78 Revision (kb/d) +30 +20 +10 2012 (mb/d) 89.9 88.81 88.64 Revision (kb/d) -20 -150 +10

IEA EIA OPEC

SEB average Brent crude oil price forecast

($/b) 2012 2013 Q1 118 125 Q2 115 Q3 115 Q4 120 Full Year 117 120

21 02

Commodities Monthly

Energy
WTI futures curve
(NYMEX, $/b)
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 8 9 m r-1 a 3 m r-1 a 4 se -1 p 2 d c-1 e 2 se -1 p 3 d c-1 e 3 ju -1 n 2 ju -1 n 3 ju -1 n 4 1 -0 -0 2 3 2 1 -0 -0 2 4 4 1 -0 -0 2 5 4

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 m r-1 a 3 m r-1 a 4 se -1 p 2 d c-1 e 2 se -1 p 3 d c-1 e 3 ju -1 n 2 ju -1 n 3 ju -1 n 4 1 -0 -0 2 3 2 1 -0 -0 2 4 4 1 -0 -0 2 5 4

m r-1 a 5

m r-1 a 6 d

se -1 p 4

d c-1 e 4

se -1 p 5

d c-1 e 5

ju -1 n 5

m r-1 a 5

m r-1 a 6

se -1 p 4

d c-1 e 4

se -1 p 5

d c-1 e 5

ju -1 n 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 E G so e YM X a lin N E H a go YM X e tin il

ju -1 n 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 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)
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 2 5 ,2 2 0 ,0 se -1 p 2 se -1 p 3 se -1 p 4 se -1 p 5 ja -1 n 3 ja -1 n 4 ja -1 n 5 m j-1 a 2 m j-1 a 3 m j-1 a 4 m j-1 a 5 ja -1 n 6 1 -0 -0 2 3 2 1 -0 -0 2 4 4 1 -0 -0 2 5 4

Chart Sources: Bloomberg, SEB Commodity Research

ju -1 n 6

Commodities Monthly

Nordic power
Nordic power price
The Nordic power market remains bearish with all fundamentals soft. In addition, the longer dated contracts are now also being influenced by very weak thermal coal prices. In particular, the API-2 reference coal contract recently gave way due to the weak European economic outlook, lower Chinese growth expectations, and rapidly increasing green power production, especially in Germany. The nuclear power station maintenance season has begun with Swedish facilities currently operating at 70% capacity. Meanwhile, the hydro balance has improved to around +22 TWh, very bearish in our view given the present weak macroeconomic outlook. We forecast hydrogeneration pricing at several points in coming weeks. The April system spot price averaged EUR 31.71/MWh. By price area, Helsinki averaged EUR 36.48/MWh, Malm EUR 33.80/MWh and Stockholm EUR 31.51, slightly below system price. The forward curve remains under pressure. Although in our previous report we saw limited downside based on the current fundamentals, we now believe the weak development in fossil fuels and restricted upside potential in CO2 may imply more remains. For now, we see virtually no bullish factors. Q3-12 is currently changing hands at 29.50/MWh and Cal-13 at EUR 37.80/MWh. Forward prices for the Finnish price area, having traded earlier this spring at a substantial premium to the system price, have begun falling with the market expecting less stress going forward.
(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 remain long term bullish on industrial metals but continue to recommend an opportunistic approach in the short- to medium-turn. Being premature, the early 2012 rally was followed by falling prices throughout February, March and most of April. As macroeconomic sentiment stabilized and prices of several metals began to be supported by marginal production costs buyers returned once again and prices tried to rebound during the second half of the month. As unstable dynamics are likely to persist until the Chinese economy shows more tangible signs of stabilizing, we recommend buyers (sellers) capitalize on bearish (bullish) macroeconomic sentiment and support from marginal costs (rallying prices). Investors aiming to build long term positions should buy metals gradually and selectively once prices fall significantly below their corresponding marginal production costs. We see good long term value in aluminium and nickel while copper carries more risk (see below). Zinc still suffers from oversupply. At least, the slowdown in the Chinese economy does not appear to be accelerating. Growth in industrial production has slowed to a standstill and GDP to just over 8% y/y in Q4-11. Meanwhile other indicators are stabilizing with some even turning more positive once again. For example, the OECD leading indicator has rebounded and the manufacturing PMI has begun to increase. Still, several major issues remain unresolved. Firstly, while authorities are working hard to progressively slow real estate sector growth, it still threatens the overall economy. Less controllable is present export weakness driven by various external factors including, for example, the European debt crisis. It would certainly be more bullish if China decided to stimulate domestic infrastructure construction activity to compensate for lost export demand. The present copper market position merits attention. Anecdotal but credible evidence suggests that the lions part of global copper inventories are currently located in China, either in the country itself or in bonded dock warehouses. Meanwhile, LME warehouse stocks have reached multi-year lows and continue to decrease. However, unlike the situation earlier this year SHFE warehouse stocks have levelled out and now also show signs of decreasing. If Chinese copper were to be consumed and imports continue going forward the market, particularly outside China, could become very tight. Conversely, if China is imports decrease going forward, or worse, if the metal is re-exported, the market could become oversupplied. Consequently, the copper market faces considerable risk at present, both upside and downside.

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

month P rice and inventory changes over the last month

(LME)
1 0 8 6 4 2 0 -2 -4 -6 -8 -1 0 -1 2 -1 4 -1 6 -1 8

Alu in m m iu

Cpe opr

N icke l

La ed

Zin c

Tin

Chart Sources: Bloomberg, SEB Commodity Research

Ste l e

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 m r-1 a 2 a r-1 p 2 m j-1 a 2 Price (% ) In e to s (% v n rie )

Commodities Monthly

Industrial metals
Aluminium
LME aluminium inventories remain very high. High levels of cancelled warrants, however, due to new rules allowing higher load-out rates from warehouses, were beginning to show in early May. Chinese aluminium imports were relatively strong in Q112, indicating that local high cost producers are cutting production as prices fall well below their production costs. Outside China also, current prices are tempting producers to maintain production cut-backs. Financial warehousing deals remain attractive as the aluminium futures curve contango continues to steepen.

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 copper inventories have continued to fall and print new post 2008 lows while SHFE inventories have stopped rising and even begun to decrease slightly. Speculators hold almost neutral COMEX copper positions, emphasizing the difficulty in devising accurate copper market predictions going forward. ICSG data for FY-11 report unchanged output of 16.0 mt, a 3.3% increase in refined production to 19.6 mt and a 3.2% rise in refined consumption to 20.0 mt. Consequently, the full year deficit decreased to 358 kt from 377 kt in 2010. Unlike other forecasters the ICSG initial estimate suggests a 360 kt refined copper market surplus is possible in 2013 due to stronger expected mine production growth. However, a seasonally adjusted deficit of 92 kt was reported in January 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
Chinese import of refined nickel and nickel ore has slowed in Q1-12 compared to Q4-11. Faster than expected implementation of Indonesian nickel ore export restrictions (May 6) could tighten future Chinese NPI supply and support the refined market. With prices near post-2009 lows, nickel price downside is restricted by marginal production costs. Consequently, downward price movements from this level will probably be temporary. The biggest cause for concern regarding the outlook for nickel is the recent sharp decrease to near stagnant yearon-year growth in Chinese stainless steel production. Though several HPAL project delays have been reported, according to the INSG supply increased significantly in early 2012, most particularly in China.

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
With LME zinc inventories currently at 17-year highs, the zinc market remains the weakest in the industrial metals sector with financial warehousing deals providing one of only a limited number of supportive elements. We expect the current market surplus to persist into 2014, significantly restricting zinc price upside potential. The ILZSG forecasts a 2012 refined market surplus of 249 kt, unchanged compared to last year. In particular, this year the ILZSG projects a 4.4% increase in demand for refined zinc to 13.41 mt and growth of 4.4% in refined production to 13.66 mt, both driven by activity in China.

LME zinc 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 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 21 02 a r-1 p 2 300 60 300 30 300 00 30 00 20 50 20 00 10 50 10 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 02 300 00 200 50 200 00 100 50 100 00 50 00 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 200 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 20 50 20 00 10 50 10 00 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) 50 00 40 50 40 00 30 50 30 00

Ferrous metals
Steel prices trended lower in both March and April with LME billets falling almost 5% to $490/t. Raw materials showed a fairly neutral development with Turkish scrap prices decreasing only slightly to $449/t and iron ore (Fe 62%) increasing marginally to $145/t. China reported record annualized crude steel output in March of 739 mt due to strong export demand (59 mtpa) and an increased local inventory. During the same period, end user demand declined 1.5% y/y. With seasonal peak consumption imminent, Chinese manufacturing data picking up, property transactions recovering, and further signs of liquidity improvements, domestic steel demand should increase, providing additional support for iron ore prices at around $140/t.

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) 40 00 30 50

LME tin price and inventories

(weekly data)
400 00 300 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

20 00 m j-1 a 2 ag 2 u -1 n v-1 o 2 fe -1 b 3 m j-1 a 3 ag 3 u -1 n v-1 o 3 fe -1 b 4 m j-1 a 4 ag 4 u -1 n v-1 o 4 fe -1 b 5 m j-1 a 5 ag 5 u -1 n v-1 o 5 fe -1 b 6 m j-1 a 6 15 90 17 95 20 00 22 05 25 00 27 05 20 10 22 15 25 10 27 15 20 20 250 30 200 40 ag 5 u -1 n v-1 o 5 fe -1 b 6 m j-1 a 6 70 90 80 00 80 10 80 20 80 30 80 40 80 50 80 60 80 70 m j-1 a 5 fe -1 b 5 n v-1 o 4 ag 4 u -1 1 -0 -0 2 5 4 1 -0 -0 2 4 4 1 -0 -0 2 3 2 m j-1 a 4 fe -1 b 4 n v-1 o 3 ag 3 u -1 m j-1 a 3 fe -1 b 3 n v-1 o 2 ag 2 u -1 m j-1 a 2

22 05

25 00

27 05

20 10

22 15

25 10

27 15

20 20

22 25

25 20

27 25

20 30

22 35

20 00

25 00

20 10

25 10

20 20

25 20

20 30

25 30

20 40

25 40

20 50

25 50

20 60

25 60

140 70

160 70

180 70

100 80

120 80

140 80

160 80

180 80

100 90

120 90

140 90

160 90

180 90

(LME, $/t)

(LME, $/t)

(LME, $/t)

m j-1 a 2

ag 2 u -1

n v-1 o 2

fe -1 b 3

Commodities Monthly

Lead futures curve

m j-1 a 3

Nickel futures curve

ag 3 u -1

Aluminium futures curve

n v-1 o 3

Industrial metals

Chart Sources: Bloomberg, SEB Commodity Research

fe -1 b 4

m j-1 a 4

ag 4 u -1

n v-1 o 4

fe -1 b 5

m j-1 a 5

1 -0 -0 2 5 4

1 -0 -0 2 4 4

1 -0 -0 2 3 2

1 -0 -0 2 5 4

1 -0 -0 2 4 4

1 -0 -0 2 3 2

ag 5 u -1

n v-1 o 5

fe -1 b 6

m j-1 a 6

(LME, $/t)

(LME, $/t)

(LME, $/t)

200 10 m j-1 a 2 ag 2 u -1 n v-1 o 2 fe -1 b 3 m j-1 a 3 ag 3 u -1 n v-1 o 3 fe -1 b 4 m j-1 a 4 ag 4 u -1 n v-1 o 4 fe -1 b 5 m j-1 a 5 ag 5 u -1 n v-1 o 5 fe -1 b 6 m j-1 a 6 1 -0 -0 2 5 4 1 -0 -0 2 4 4 1 -0 -0 2 3 2

250 10

200 20

250 20

200 30

m j-1 a 2 ag 2 u -1 n v-1 o 2 fe -1 b 3 m j-1 a 3 ag 3 u -1 n v-1 o 3 fe -1 b 4 m j-1 a 4 ag 4 u -1 n v-1 o 4 fe -1 b 5 m j-1 a 5 ag 5 u -1 n v-1 o 5 fe -1 b 6 m j-1 a 6 1 -0 -0 2 5 4 1 -0 -0 2 4 4 1 -0 -0 2 3 2

m j-1 a 2

ju -1 n 2

ju 2 l-1

Tin futures curve

Zinc futures curve

ag 2 u -1

Copper futures curve

se -1 p 2

o 2 kt-1

n v-1 o 2

1 -0 -0 2 5 4

1 -0 -0 2 4 4

1 -0 -0 2 3 2

d c-1 e 2

ja -1 n 3

fe -1 b 3

m r-1 a 3

a r-1 p 3

m j-1 a 3

10

ju -1 n 3

ju 3 l-1

Commodities Monthly

Precious metals
Gold lacks a catalyst and therefore remains in a consolidation pattern. Generally, liquidity is more or less as supportive as it can be and will have a hard time to exceed expectations. While a third round of quantitative easing in the US would certainly help, its implications have been thoroughly analysed and are fully understood. Prospects of a higher gold price depend on rising inflation expectations, which are currently non-existent. Conversely, safe haven gold demand is weak with the global economy recovering slowly but steadily. The most dangerous systemic risk, an uncontrolled Euro-zone breakdown, was eliminated by two ECB LTROs. Still, with the worldwide economic situation far from reassuring and capable of deteriorating relatively rapidly, it is difficult to be outright bearish towards gold. At present, relatively low speculative COMEX positions are most supportive, signalling that consolidation is well advanced and that gold could be ready for a rebound. The inevitable question is how far gold could rally or fall. Starting with the upside we still see risk skewed towards new highs in 2012 as liquidity settings remain accommodative, QE3 is still quite likely, lacklustre growth persists, the devaluation war continues, and governments are struggling to balance austerity measures with stimulus policies. If the recovery accelerates and inflation stays reasonably low we see substantial downside potential for gold, particularly if mine supply growth continues at current high levels. Falling prices could trigger a sell-off in physical investment products, in which more than two thousand tonnes have been bought by investors joining the gold rally over the last decade. In addition, they have also accumulated significant volumes in, for example, allocated accounts and private vaults. With a sell-off in the gold market liable to accelerate rapidly, we do not recommend investors retain their gold positions if prices fall significantly below the long term trend but instead exit the market and re-enter at a later stage. Platinum and palladium are primarily driven by industrial factors rather than their precious metal status, the most important of which is demand for auto catalysts. The recovery in global auto production therefore suggests a reasonably positive outlook for both metals with, for example, US auto sales remaining well below pre-crisis levels and Chinese automotive demand seemingly insatiable. Meanwhile South African mining companies struggle with poor profitability and high disruption risks. While palladium prices are further supported by uncertainty surrounding Russian state inventories (a major source of supply), those for platinum (used to manufacture diesel car catalysts) are restricted by the ongoing debt and deleveraging crisis in Europe, still the worlds largest diesel car market.

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 N K O 21 02 C F H

Gold and currencies vs. USD

8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 G L OD EU R J PY G BP SEK R B U YT (% D ) 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 m r-1 a 2 a r-1 p 2 m j-1 a 2

11

Commodities Monthly

Precious metals
Gold
After printing new highs in March at 2410.2 tonnes, physical ETF holdings have been decreasing slowly to currently 2381.5 tonnes. Net speculative long COMEX gold positions are back at multi-year lows, approximately 50% below their level in mid-2011, after trending lower during March and April. April US Mint gold coin sales were even weaker than in February, with a first tertial total of 230.5 kozt, down from 407.5 kozt during the corresponding period last year. Latest gold mining data show production growth was almost zero last month after appearing to strengthen earlier this year. In absolute terms output remains at near record highs.

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
Physical silver ETF holdings have retreated slowly since early March and currently stand at 17,539 tonnes, well below the 2011 record high of 18,639 tonnes. Net speculative long COMEX positions have decreased over the past two months due to fewer long- and more short positions. US Mint silver coin sales have been weaker than last year with 11.7 mozt sold during the first four months of this year compared with 15.2 mozt during the same period in 2011. After falling below 50 in February, the gold to silver ratio has trended higher to current 54.4. However, we do not expect it to exceed 60 before market conditions turning from liquidity to growth orientation starts favouring silver and the ratio starts trending lower again.

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

Physical platinum ETF holdings have remained near record highs since early 2011 while tending to drift lower during the past two months to 42.4 tonnes. Unlike other precious metals, palladium holdings have increased to 60.9 tonnes so far this year after falling back from alltime highs in early 2011 (73.1 tonnes). Speculative long NYMEX platinum positions have slumped to multi-year lows over the past two months due to fewer long- and record high short positions. Palladium has reported a similar development although not as extreme. We expect the platinum to palladium ratio to fall further, as discussed earlier.

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

75 1 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 65 3 60 3

(NYMEX, $/ozt)

(COMEX, $/ozt)

Gold futures curve

(weekly data, tonnes)

Commodities Monthly

Palladium futures curve

Precious metals

10 40 ju -1 n 2 1 -0 -0 2 5 4 1 -0 -0 2 4 4 1 -0 -0 2 3 2 Silv r h ld g / 1 e o in s 0 se -1 p 2

10 50

10 60

10 70

10 80

10 90

20 00

20 10

20 20

20 30

20 40

20 50

10 60

12 65

15 60

17 65

10 70

12 75

15 70

17 75

10 80

12 85

15 80

17 85

G ld h ld g o o in s

silver Physical silver and gold ETP holdings

Chart Sources: Bloomberg, SEB Commodity Research

d c-1 e 2 1 -0 -0 2 5 4 1 -0 -0 2 4 4 1 -0 -0 2 3 2

m r-1 a 3

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 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 3 ju -1 n 2 se -1 p 2 d c-1 e 2 m r-1 a 3 ju -1 n 3 se -1 p 3 d c-1 e 3 m r-1 a 4 ju -1 n 4 se -1 p 4 d c-1 e 4 m r-1 a 5 ju -1 n 5 se -1 p 5 d c-1 e 5 m r-1 a 6 ju -1 n 6 se -1 p 6 d c-1 e 6 m r-1 a 7 ju -1 n 7 se -1 p 7 d c-1 e 7 3 ,0 0 3 ,5 0 3 ,0 1 3 ,5 1 3 ,0 2 3 ,5 2 3 ,0 3 3 ,5 3 3 ,0 4 3 ,5 4 3 ,0 5

(NYMEX, $/ozt)

(COMEX, $/ozt)

(weekly data, tonnes)

Silver futures curve

Platinum futures curve

2 0
ju 2 l-1

2 5 Palla m diu
o 2 kt-1 ja -1 n 3 1 -0 -0 2 5 4 1 -0 -0 2 4 4 1 -0 -0 2 3 2 a r-1 p 3

3 0

3 5

4 0

4 5

5 0

5 5

6 0

6 5

7 0

7 5

12 50

14 50

16 50

18 50

10 60

12 60

14 60

16 60

18 60

10 70

12 70

m j-1 a 2 ag 2 u -1 n v-1 o 2 fe -1 b 3 m j-1 a 3 ag 3 u -1 n v-1 o 3 fe -1 b 4 m j-1 a 4 ag 4 u -1 n v-1 o 4 fe -1 b 5 m j-1 a 5 ag 5 u -1 n v-1 o 5 fe -1 b 6 1 -0 -0 2 5 4 1 -0 -0 2 4 4 1 -0 -0 2 3 2

Pla u tin m

palladium Physical palladium and platinum ETP holdings

13

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 m r-1 a 2 a r-1 p 2 m j-1 a 2
ju 3 l-1

m j-1 a 6

Commodities Monthly

Agriculture
We see no reason to revise our medium- to long-term bearish view on grains. Risk is clearly skewed sharply to the downside and the recent rebound has probably run its course. The road of least resistance appears to be downward in the short-term as well. At present, only adverse weather conditions could potentially change our opinion. Certainly, given recent abnormally high temperatures in many areas, so far with both positive and negative effects, we recommend close monitoring of soil moisture conditions going forward. According to the latest comprehensive forecast, la Nia is over and unlikely to return this year. At present normal or above normal production under normal conditions appears most likely going forward, implying significantly better supply than last year. Globally, grain inventories are not particularly low. With 2011/2012 corn ending stock to use ratio forecast at almost 20% below its 10-year average the general market situation is still satisfactory in spite of temporarily and locally tighter market conditions. In addition there is a very high probability of lower demand from US ethanol producers and considerably higher US production this season, the latter supported by a very good start to planting which may result in well above average yields. Conversely, wheat inventories are currently more than 10% above their 10-year global average and within a few months the market will be flooded by new cargoes as the northern hemisphere winter wheat harvest begins. If the corn market were to tighten further plenty of wheat would be available for substitution. However, soybeans are a different story. Prices have rallied following a record reduction in South American production estimates due to severe drought. Prices have rallied by over 35% to approximately 10% below their all-time high and could remain strong for some time yet. However, at present demand destruction has probably already set in, significantly limiting upside potential. This year, US soybean planting has begun well with positive yield implications. In addition, high prices will stimulate planting even if corn steals some acreage in the US. Also in the US, planting and crop development are benefiting from the warmest March on record. Corn and spring wheat planting are at a late stage, soybean planting is well advanced, while winter wheat is developing rapidly. Even more positive, rain is now falling in the Midwest, boosting early crop development. While some drought concerns remain in the southern Great Plains, conditions have continued to improve rapidly since last years record drought. Meanwhile, although conditions in both Europe and the FSU are dry, local rains and melting snow are ensuring adequate water supplies. Further, South American harvests are now benefiting from dry conditions while localised rainfall coming too late to significantly impact yields.

prices 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 m r-1 a 2 a r-1 p 2 m j-1 a 2 Wet ha S yb a s o en 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

Production and inventory estimate revisions

(WASDE, monthly data, %)
6 5 4 3 2 1 0 -1 -2 -3 -4 n v-1 o 1 fe -1 b 2 ja -1 n 2 d c-1 e 1 m r-1 a 2 o 1 kt-1 a r-1 p 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
Net speculative long positions in CBOT corn fell significantly in April, primarily due to an unusual build-up in short positions. Exceptionally favourable weather conditions have resulted in abnormally quick progress in US planting. In addition, early crop development is positive with soil moisture levels increased by recent rains, implying an above average yield, unlike last years dismal outcome due to a combination of drought and excessive rainfall. US ethanol prices are being affected by several headwinds including further rises in record high inventories, Brazilian ethanol production and exports ramping up seasonally and corn prices remaining high compared to ethanol prices. The only supportive factor is the fact that high gasoline prices encourage blending.

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
Net speculative long positions in CBOT wheat have remained negative at just above record low levels since Q3-11. Concurrently, both long and short positions have increased in tandem. Abnormally warm temperatures in the northern hemisphere, particularly in March, have decisively ended winter wheat dormancy with crops now developing rapidly. Absent unforeseen disruption, the harvest could start early this year. Spring wheat planting is also progressing rapidly in the US. So far warm conditions in both the US and Europe have not yet resulted in serious drought conditions although they may and should be monitored accordingly. US wheat prices were temporarily supported by abnormally high export demand during the second half of April.

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
Net speculative long positions in CBOT soybeans rose sharply to record highs during February and March before stabilizing in April. Previously, short positions had decreased from relatively high levels as long positions increased. However, during April, short positions began accumulating once again. A favourable start to corn planting usually exerts pressure on soybean acreage, although the current soybean to corn ratio suggests allowing this to happen would be irrational. Indeed, soybean planting has started well, implying eventually high yields. Chinese import demand remains strong, increasing pressure on a market already adversely affected by weak supply. Still, with the market already fully aware of both these factors, they should already be fully discounted in current prices.

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)
67 0 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 53 0 52 0 aug -12 m aj-12 1 2-03 -02 1 2-04 -04 1 2-05 -04 725 700 675 650 625 600 aug-1 2 m 2 aj-1 750

Wheat futures curve

(CBOT, /bu)
775 12-03-02 12-04-04 12-05-04

no 2 v-1

no 3 v-1

feb-13

aug -13

feb-14

aug -14

m aj-13

m aj-14

nov-12

nov-13

fe b-13

Soybean futures curve

(CBOT, /bu)
1500 1475 1450 1425 1400 1375 1350 1325 1300 1275 1250 1225 nov-12 nov-13 feb-13 feb-14 1200 aug-12 m aj-12 aug-13 m aj-13 m aj-14 12-03-02 12-04-04 12-05-04

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

aug-1 3

m 3 aj-1

16

fe b-14

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
-1,9 0,4 79,6 45,9 0,7 -0,3 2,7 1,3 -19,9 3,8 0,0 78,6 54,8 2,1 2,2 2,7 0,3 103,4 76,4 115 13,9 1,0 91,2 50,7 -0,6 -0,2 -0,3 0,5 104,9 40,1 11,9 53,3 8,1 3,6 102,3 100,0 15,7 20,9 103,2 51,4

Date
2012-02-29 2012-02-29 2012-06-30 2012-04-30 2011-12-31 2011-12-31 2012-03-31 2012-03-31 2012-04-30 2012-03-31 2012-03-31 2012-03-31 2012-04-30 2012-03-31 2012-03-31 2012-03-31 2012-03-31 2011-03-31 2012-04-30 2012-04-30 2012-03-31 2012-03-31 2012-02-29 2012-04-30 2011-12-31 2011-12-31 2012-04-30 2012-03-31 2011-02-28 2012-03-31 2012-03-31 2012-04-30 2012-03-31 2012-03-31 2011-03-31 2012-03-31 2012-03-31 2012-03-31 2011-03-31 2012-04-30

Previous
-1,7 79,8 47,7 1,3 0,1 2,7 0,5 -19,1 4,6 0,0 78,7 53,4 1,6 3,0 2,9 0,4 103,1 76,2 154 1,5 -1,6 92,8 51,1 -0,4 1,7 -0,1 0,2 104,2 39,1 12,8 53,1 8,9 3,2 102,1 105,0 15,2 23,8 103,0 51,1

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

Next
2012-05-14 2012-05-14 2012-05-24 2012-05-15 2012-05-15 2012-05-16 2012-05-16 2012-05-22

2012-05-16 2012-05-16 2012-06-01 2012-05-31 2012-05-15 2012-05-15 2012-05-11 2012-06-01 2012-05-17 2012-05-17

2012-05-17 2012-05-25

2012-05-11 2012-06-01 2012-07-13 2012-05-11

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 (%)
0,9 0,9 1,2 0,4 5,3 5,4 -2,2 -35,5 -0,3 5,4 2,3 7,6 -6,1 8,1 -7,5 5,0 2,4 -7,5 23,1

1m (%)
-13,3 -13,3 -12,4 -12,1 -16,7 9,3 -15,3 -22,8 -9,2 -6,5 -21,5 -12,4 -31,1 -17,5 -9,7 14,9 -12,9 -23,6 6,6

1q (%)
-4,4 -4,4 -4,3 -2,3 -7,0 -6,3 -3,8 78,8 0,7 -1,2 -8,0 -4,6 -17,5 -7,4 -4,9 -5,3 2,8 -8,6 19,7

1y (%)
-12,0 -12,0 -10,9 -13,1 -15,9 3,5 -10,2 -11,1 -9,8 -6,6 -24,9 -10,4 -31,9 -8,9 -13,3 8,6 -8,8 -18,5 9,2

5y (%)
11,7 6,7 35,8 28,2 -14,6 129,5 73,4 -81,7 59,0 73,3 -28,5 -1,7 -65,9 -52,2 N/A! 138,5 73,7 25,3 101,1

1279,56 1203,22 1539,12 1498,49 1100,10 2437,13 1707,87 1157,00 98,49 113,18 2066,50 8175,00 17575,00 1995,00 490,00 1645,20 662,25 603,75 1475,00

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) May 11 May 10 May 8 May 10 May 24 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