Commodities Monthly

Global Economy Cold Middle East Hot

20 NOVEMBER 2012

Commodities Monthly

Global Economy Cold Middle East Hot

GENERAL

0-3 M 4-6 M 7-12 M

UBS Bloomberg CMCI Sector Indices

(price indices, weekly closing, January 2010 = 100)
10 8 10 7 10 6 10 5 10 4 10 3 10 2 10 1 10 0 9 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 ju -1 n 2 ju 2 l-1 ag 2 u -1 se -1 p 2 o 2 kt-1 n v-1 o 2
YT (% D ) M (% /M )

The global economy looks set to muddle through 2013 with limited growth potential but decreasing downside risks. Despite continuing positive US trends a probable soft fiscal cliff will limit growth potential. The Chinese development has been on the positive side lately but we expect only careful stimulus measures to support it. Most likely Euro-zone growth will remain around zero with still restricted credit flows. Austerity measures will continue but be more moderate.

In u d stria M ta l e ls Precio s M ta u e ls En rg e y Ag lture ricu

ENERGY

0-3 M 4-6 M 7-12 M

The IEA World Energy Outlook 2012 was clearly bullish on future US supply from tight oil deposits. Despite several downgrades, the IEA still expects persistent strong global oil demand and continued substantial growth going forward, ensuring a relatively tight market balance. Meanwhile the geopolitical temperature in the Middle East continues to rise, with the current Israeli-Palestinian conflict the latest example. Geopolitical upside risk remains high.

8 0

Sector performance
(MSCI World, UBS Bloomberg CMCI price indices)
1 2 1 0 8 6 4 2 0 -2 -4 C m o itie o md s Ag ltu ricu re In u d stria l m ta e ls Eq itie u s En rg e y Pre u cio s m ta e ls -6

INDUSTRIAL METALS

0-3 M 4-6 M 7-12 M

As expected, the post-summer rally in industrial metals prices was short-lived, with Chinese economic headwinds and political uncertainty hardly supportive. Our opportunistic tactical recommendation to sell on rallies and buy near the bottom of the range (to some extent set by marginal production costs) remains. Our strategic view is mildly bullish as a modest acceleration in global growth still appears the most probable scenario for next year, with Chinas new political leaders likely to promote stability.

PRECIOUS METALS

0-3 M 4-6 M 7-12 M

Positive factors still dominate the gold market. However, due to the metals surprisingly poor performance following the QE3 announcement we revise our Q4-12 average price forecast down $50/ozt to $1750/ozt. Gold and silver coin sales are showing signs of recovery, while physical ETF sales remain strong, suggesting the retail market is becoming increasingly concerned at the rate at which money is being printed. Johnson Matthey currently forecasts significant platinum and palladium deficits in 2012 and expects tight markets next year.

Winners & Losers over the last month

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

AGRICULTURE

0-3 M 4-6 M 7-12 M

El Nio risk this winter has decreased further with neutral conditions currently the most likely scenario according to the NOAA, reducing meteorological risks going forward. The knot in the grain market is slowly beginning to unravel though potential FSU protectionism, low inventories during the intercrop season and local drought conditions remain at least short-term supportive. Still, risk is skewed to the downside and our long term forecast outright bearish. US winter precipitation will be very important given current dry conditions in the Midwest and Great Plains.

Chart Sources: Bloomberg, SEB Commodity Research

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

THE NEXT COMMODITIES MONTHLY WILL BE PUBLISHED IN MID-JANUARY

C 2 (EU O A) C offe (Ar.) Soybe s an H at. oil (U e S) C pp o er W TI N icke l Bre nt Tin Sgr ua Platinu m G so a line (U S) Ste b ts el ille C n otto P allad m iu Silver G old C rn o P er (N rdic) ow o W ea h t P er (C nt.) ow o A in m lum iu Zinc C ocoa (U S) L d ea N ga (U at. s S)

Commodities Monthly

General
While increased tension in the Middle East could adversely affect the oil market sending prices higher, commodities are currently depressed by weak global macroeconomic conditions. Consequently, barring disruption of the oil market we expect no major upturn in commodities prices near-term. While China may announce unexpected stimulus measures, its politicians have so far avoided aggressive stimulus, opting instead to provide a substantial liquidity boost in a format easily reversible if inflation moves higher or the local housing market turns upward. It is becoming increasingly clear that the general economic outlook for 2013 suggests a global economy muddling through. Despite encouraging signs in both the US and China, we forecast little growth in Europe overall. Moreover, we expect the upcoming US fiscal cliff to impact, albeit much less than it might have done. We believe further austerity measures will continue to restrict European growth, also to a smaller extent than many might have feared, with the ECB policy mandating whatever it takes enabling European policymakers to ease the squeeze in 2013, compared to 2012. Over the past month, global markets have found little to celebrate despite the end to uncertainties surround both the US elections and Chinas political transition. Instead, concerns regarding the potential threat posed by the impending US fiscal cliff have hit markets with full force with the current indeterminate outcome to talks intended to resolve the crisis likely to depress Q4-12 US business investments. Clearly, the issue creates enormous uncertainty regarding US macroeconomic prospects for next year. Since our last report both US and Chinese equities have fallen almost 5% while commodities have decreased by only less than 2%, largely in line with the gain in the US dollar index. Hurricane Sandy created considerable volatility for energy markets with oil and oil product prices moving both higher and lower during the period to end largely unchanged. Further, precious metals have remained range-bound over the past month, eventually edging only slightly higher. Significantly, industrial metals prices declined only 1.3% during the same period taking little notice of the more substantial 4.5% fall in Chinese equities. Concurrently, the worst performer overall was the Agricultural sector which dropped 5.6% on easing market fundamentals.

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

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 01 21 02
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 C in h a E ro n u zo e O D EC U SA R fe n e re ce

Chart Sources: Bloomberg, SEB Commodity Research

21 02

Commodities Monthly

Crude oil
Since being first announced in July 2011, the IEAs 2012 global oil demand estimate has been successively revised 1.4 mb/d lower. Given current high macroeconomic headwinds and/or uncertainties affecting all major regional markets, it is hard to imagine the situation changing any time soon. In addition, expected long-term supply continues to increase as tight US oil production still exceeds expectations. Taking mainly these factors into account we recently lowered our Brent crude oil price forecast with risk skewed to the downside. Still, we continue to anticipate record high global oil consumption in 2012 while marginal unconventional barrels remain expensive to produce, middle distillate markets continue tight, geopolitical risk is extraordinarily high, and oil producers retain strong incentives to defend prices. Given all these factors, a deep, prolonged downturn in the oil market appears neither imminent nor likely in the medium-term unless the risk of a global recession increases significantly. While most recent data suggest the oil market was relatively balanced in Q3-12 there appears to be an oversupply of around 1 mb/d in this quarter, partly due to lower consumption as a result of Hurricane Sandy and reactivation of North Sea production following maintenance. Overall, current OECD industry oil stocks are well above their five year average due to high North American and Asian crude oil stocks. Conversely, global oil product stocks are below normal. The International Energy Agencys (IEA) World Energy Outlook for 2012 appeared optimistic regarding tight US oil production, which it now expects to increase from approximately 1 mb/d in 2011 to above 4 mb/d by the mid2020s. As a result, the US may replace Saudi Arabia as the worlds largest oil producer by around 2020 and become virtually energy self-sufficient by the mid-2030s. Furthermore, North America could become a net exporter around 2030. However, considering the novelty of tight oil production considerable uncertainty still surrounds these projections, e.g. regarding non-US potential and the life span of such resources. Geopolitical conditions in the MENA region continue to deteriorate, Gaza being the latest example. The civil war in Syria is increasingly impacting surrounding countries, e.g. with grenades being exchanged between Turkey and Israel and significant public unrest in Lebanon. Iran has challenged both the US and Saudi Arabia by firing at a US UAV, harassing Saudi tanker traffic and potentially violating Saudi airspace. Other conflicts remain unresolved and could revive at any time even though attention is currently focused elsewhere, e.g. Egypt and Bahrain. In addition, Yemens export pipeline (110 kb/d) has once again been blown up after several months of repairs, eliminating much needed funding for the countrys transitional government.

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
o n

N EXW I YM T IC B n E re t

US crude oil inventories

(DOE, mb, weekly data)
3 90 3 85 3 80 3 75 3 70 3 65 3 60 3 55 3 50 3 45 3 40 3 35 3 30 3 25 3 20 3 15 j f m a

20 -20 a g. 07 11 v 20 11 20 12

21 02
d

Chart Sources: Bloomberg, SEB Commodity Research

Current global crude oil demand estimates

2012 (mb/d) 89.6 89.05 88.80 Revision (kb/d) -80 -40 -10 2013 (mb/d) 90.4 89.94 89.57 Revision (kb/d) -70 -70 -20

IEA EIA OPEC

SEB average Brent crude oil price forecast

($/b) 2012 2013 2014 2015 Q1 105 Q2 105 Q3 110 Q4 110 110 Full Year 111.7 107.5 110.0 115.0

Commodities Monthly

Energy
WTI futures curve
(NYMEX, $/b)
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 8 7 8 6 8 5 o 3 kt-1 o 4 kt-1 a r-1 p 3 a r-1 p 4 a r-1 p 5 ja -1 n 3 ju 3 l-1 ja -1 n 4 ju 4 l-1 ja -1 n 5 1 -0 -1 2 9 4 1 -1 -1 2 0 6 1 -1 -1 2 1 6

Brent futures curve

(ICE, $/b)
18 1 17 1 16 1 15 1 14 1 13 1 12 1 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 o 3 kt-1 o 4 kt-1 o 5 kt-1 a r-1 p 3 a r-1 p 4 a r-1 p 5 ja -1 n 3 ja -1 n 4 ja -1 n 5 ja -1 n 6 ju 3 l-1 ju 4 l-1 ju 5 l-1 1 -0 -1 2 9 4 1 -1 -1 2 0 6 1 -1 -1 2 1 6

o 6 kt-1

a r-1 p 6

o 5 kt-1

o 6 kt-1

a r-1 p 6

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

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 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 n v-1 o 2 n v-1 o 3 n v-1 o 4 n v-1 o 5 m r-1 a 3 m r-1 a 4 m r-1 a 5 m r-1 a 6 n v-1 o 6 2 5 ,7 ju 3 l-1 ju 4 l-1 ju 5 l-1 ju 6 l-1 1 -0 -1 2 9 4 1 -1 -1 2 0 6 1 -1 -1 2 1 6

Chart Sources: Bloomberg, SEB Commodity Research

a r-1 p 7

ja -1 n 6

ja -1 n 7

ja -1 n 7

ju 5 l-1

ju 6 l-1

ju 6 l-1

Commodities Monthly

Nordic power
Nordic power price
The Nordic Power market remains largely unchanged compared to last month with wet and unsettled weather, a large hydro balance surplus, reservoir levels well above normal and no major disturbances either in transmission or production systems. Regional nuclear power plants are operating with 95% availability while spot prices remain very stable. The system spot price has increased significantly compared to September, mainly due to the seasonal effect of falling temperatures. The spot averaged EUR 34.75/MWh in October, up EUR 9.37/MWh from September. On the forward curve only minor changes have occurred in recent months. Cal-13 has traded between EUR 36.538.5/MWh since the beginning of September while Q1-13 has remained between EUR 40-44/MWh since April to trade currently near the bottom of its range. Given current fundamentals, we see a probable high winter premium in the Q1-13 contract. We expect the spot price to deliver well below EUR 40/MWh. However, based on recent winters, we see little downside until the contract goes into delivery. Coal, CO2 and continental power prices provide little support for the Nordic power market. The front year German power contract hit a new record low at the beginning of November following the same pattern as European coal prices. Those for CO2 were also trading at a three month low at the time of writing with the Dec-12 contract at EUR 7/ton. Weak macroeconomic sentiment and the on-going transition of the German power market are exerting pressure on coal, CO2 and power prices. Germany continues to expand renewable power production massively through the installation of wind and solar plants. Going forward we see no signs of a trend in any direction from current low levels. With winter approaching, the overall situation appears sounder than in recent years. The only upside price risk is the possibility of a longer cold spell potentially causing price spikes in the spot market.
(by Mats Forsell and Mats Hedberg, Commodities Trading) (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 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

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Industrial metals
We have been rightly sceptical of both industrial metal rallies in 2012 and continue to recommend sellers take advantage of recoveries and buyers exploit corrections. Since the Chinese economy shows few convincing signs of having been brought under control, it is difficult to be outright bullish towards industrial metals, particularly given the lack of support from other demand sources. Most of this autumns correction is, however, probably over. While our tactical recommendation is still opportunistic our strategic view remains slightly bullish with the main economic scenario for 2013 a slight acceleration in global growth. Currently, however, forecast risk appears skewed to the downside. Taking into account the cushioning effect of marginal production costs, the industrial metal sector still appears relatively attractive within the commodities complex. Chinese macroeconomic data have proved surprisingly strong in recent weeks, suggesting conditions are stabilizing, at least temporarily. However, given the extraordinary challenges facing the country in switching from an investment- to domestic consumption driven growth model, it is far too early to say whether the current economic downturn has finally bottomed. As Chinas flawed growth model was discussed openly during the national congress it will be interesting to learn how the new leadership will approach it and whether it intends to start out positively by announcing directed stimulus measures in one form or another. The Chinese are however painfully aware of the fact that there is no quick fix to current problems and that pumping more money into investments will only result in even higher excess capacity and more bad debt. Recent data show export growth trending higher once again while import growth continues to slow, possibly negative developments from a domestic consumption perspective. Meanwhile, with the countrys infrastructure project pipeline solid for several years, Chinese demand for metals is unlikely to collapse in the foreseeable future. Regionally, the outlook for other consumer markets is similar to China. Despite stronger than expected US macroeconomic data since early September the so-called fiscal cliff is fast approaching. Automatically or otherwise, spending has to be cut and/or revenues increased, a scenario set to depress US growth prospects. In Europe, while markets have been less focused on the regions sovereign debt crisis, an end to its recession still seems far off particularly with signs suggesting even the German economy is decelerating. In other words, a significant recovery in metal demand still seems a long way off in all major regional markets. On the other hand, new capacity investment plans are also being scaled back, resulting in a better market balance than would otherwise have been the case.

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
Tin

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 C p er op N icke l A m iu lu in m Z c in La ed T in

Price and inventory changes over the last month

(LME)
2 2 2 0 1 8 1 6 1 4 1 2 1 0 8 6 4 2 0 -2 -4 -6 -8 -1 0 P rice (% ) In e to s (% v n rie )

A m iu lu in m

Cpe opr

La ed

Zinc

Chart Sources: Bloomberg, SEB Commodity Research

N icke l

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 ju -1 n 2 ju 2 l-1 ag 2 u -1 se -1 p 2 o 2 kt-1 n v-1 o 2
-27.3%

21 02

Commodities Monthly

Industrial metals
Aluminium
LME aluminium inventories are near record highs while their SHFE counterparts continue to rise. Anecdotal evidence also suggests Chinese producer stocks have hit all-time highs. These developments reflect the combination of near record high end-Q3 global and Chinese production and continued weak worldwide growth. Meanwhile, physical premiums remain strong with still very long queues to remove aluminium from warehouses. Cancelled warrants total 36%. Despite oversupply looking likely to continue for several years, current prices are supported by present production costs and an optimistic consensus view regarding the potential for demand growth.

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
100 10 100 00 90 00 80 00 70 00 60 00 50 00 40 00 30 00 20 00 10 00 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)

30 50 35 20 30 00 25 70 20 50 25 20 20 00 15 70 10 50 15 20 10 00

Copper
The ICSG reported a seasonally adjusted copper market deficit of 333 kt during the first seven months of this year. Mine supply increased 2.5% to 9,339 kt, refined production 2.2% to 11,448 kt and refined consumption 6.2% to 11,971 kt. In late October, COMEX speculators became bearish once again with long positions decreasing sharply. Chinese copper import demand remains strong though well below record highs posted earlier this year. Currently, both LME and SHFE copper stocks are tending to increase with anecdotal evidence still suggesting very high Chinese bonded warehouse inventories. Although the copper market may turn bullish very quickly if demand picks up, with prices well above marginal production costs we see substantial downside if headwinds intensify substantially.

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

Nickel
With the Indonesian government taking a softer line on nickel ore exports, shipments to China may recover, boosting local production and further exacerbating current oversupply. Meanwhile, LME nickel inventories continue to increase, as they have since late 2011 with a new post-2010 high fast approaching. This is hardly surprising with record strong global and Chinese production reported during late Q3-12. The latest indications suggest HPAL projects continue to underperform, confusing the future supply situation. This together with high marginal production costs relative to prices so far limits downside risk.

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
After tending to decrease slightly during late summer, zinc inventories rose sharply throughout October and are now not far from the mid-1990s all time high. However, after correcting in October, prices appear well supported having dug into the marginal production cost curve. So far, zinc is the only major industrial metal to have rebound substantially after the latest slump. Further, zinc prices are supported both by current production costs, future supply uncertainties, and fairly solid Chinese zinc demand. However, if prices rise we would expect present substantial idle smelting capacity to be brought back online, limiting upside potential.

LME zinc price and inventories

(weekly data)
1000 200 1000 100 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 90 0 80 0 70 0 60 0 50 0 40 0 30 0 n v-0 o 8 n v-0 o 9 n v-1 o 0 m r-0 a 9 m r-1 a 0 m r-1 a 1 n v-1 o 1 20 0 m r-1 a 2 ju 2 l-1 300 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 21 02 200 70 200 40 200 10 100 80 100 50 100 20 90 00 60 00 30 00 ju 8 l-0 ju 9 l-0 ju 0 l-1 ju 1 l-1 10 00 50 0 20 50 20 00 10 50 40 00 30 50 30 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) 50 00 40 50

Ferrous metals (by Maximilian Brodin, Commodities Sales)

Since bottoming in early September the Chinese iron ore price has increased by over 40% due to mills restocking ahead of the winter and strong steel production to supply the construction sector. Over the last five weeks Chinese steel prices have fallen back with industry sources reporting mills buying smaller volumes from port stocks below deep sea market prices. Turkish scrap prices have been pushed higher following solid buying and limited US East Coast supplies due to Hurricane Sandy. However, since the recent US hurricane-related disruption, Turkish mills report decreasing margins and additional scrap supplies. Consequently, we forecast that Turkish scrap prices will fall back below $400/t. Colder weather will halt construction in China and slow demand for steel and iron ore, weighing on prices short term.

LME steel billet price and inventories

(weekly data)
100 300 100 200 100 100 100 000 900 00 800 00 700 00 600 00 500 00 400 00 300 00 200 00 100 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)

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

(LME, $/t)

(LME, $/t)

(LME, $/t)

n v-1 o 2 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 ag 6 u -1 n v-1 o 6 15 80 10 90 15 90 20 00 25 00 20 10 25 10 20 20 25 20 20 30 270 15 200 20 fe -1 b 6 m j-1 a 6 ag 6 u -1 n v-1 o 6 70 50 70 60 70 70 70 80 70 90 80 00 80 10 80 20 80 30 80 40 n v-1 o 5 ag 5 u -1 m j-1 a 5 fe -1 b 5 n v-1 o 4 ag 4 u -1 1 -1 -1 2 1 6 1 -1 -1 2 0 6 1 -0 -1 2 9 4 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

fe -1 b 3

20 10

22 15

25 10

27 15

20 20

22 25

25 20

27 25

20 30

22 35

25 30

10 90

15 90

20 00

25 00

20 10

25 10

20 20

25 20

20 30

25 30

20 40

25 40

20 50

25 50

180 50

100 60

120 60

140 60

160 60

180 60

100 70

120 70

140 70

160 70

180 70

100 80

120 80

m j-1 a 3

ag 3 u -1

Commodities Monthly

Lead futures curve

n v-1 o 3

Nickel futures curve

fe -1 b 4

Aluminium futures curve

m j-1 a 4

Industrial metals

Chart Sources: Bloomberg, SEB Commodity Research

ag 4 u -1

n v-1 o 4

fe -1 b 5

m j-1 a 5

ag 5 u -1

1 -1 -1 2 1 6

1 -1 -1 2 0 6

1 -0 -1 2 9 4

n v-1 o 5

fe -1 b 6

1 -1 -1 2 1 6

1 -1 -1 2 0 6

1 -0 -1 2 9 4

m j-1 a 6

ag 6 u -1

n v-1 o 6

(LME, $/t)

(LME, $/t)

(LME, $/t)

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 ag 6 u -1 n v-1 o 6

220 05 n v-1 o 2 1 -1 -1 2 1 6 1 -1 -1 2 0 6 1 -0 -1 2 9 4

250 00

270 05

200 10

220 15

250 10

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 ag 6 u -1 n v-1 o 6

d c-1 e 2

ja -1 n 3

Tin futures curve

Zinc futures curve

fe -1 b 3

Copper futures curve

m r-1 a 3

a r-1 p 3

m j-1 a 3

1 -1 -1 2 1 6

1 -1 -1 2 0 6

1 -0 -1 2 9 4

ju -1 n 3

ju 3 l-1

1 -1 -1 2 1 6

1 -1 -1 2 0 6

1 -0 -1 2 9 4

ag 3 u -1

se -1 p 3

o 3 kt-1

n v-1 o 3

10

d c-1 e 3

ja -1 n 4

Commodities Monthly

Precious metals
Given current circumstances, gold continues to perform poorly. The present year-long consolidation has been the longest since its bull market began in the early 2000s. However, price bullish factors still significantly outnumber bearish. Further, gold is also tactically attractive compared to many other commodities. Provided liquidity settings remain generous, growth expectations muted and systemic risks present, we expect prices to remain high. For now, strong risk aversion poses the biggest threat with gold unlikely to perform resiliently. Potential headwinds also include possible USD appreciation if US politicians find a sensible debt solution which avoids the worst fiscal cliff scenarios. Conversely, this particular factor may also prove a supportive factor if they fail to do so. Increasing inflation expectations, the most obvious major potential bullish catalyst, are hardly likely at present but may become an issue next year. Due to the surprisingly muted reaction to the launch of the open-ended QE3 program we lower our Q4-12 average gold price forecast from $1800/ozt to $1750/ozt while reiterating our 2013 projections (Q1: $1800/ozt, Q2: $1750/ozt, H2: $1700/ozt). After showing signs of weakness in Q2-12 gold demand appears to have picked up once again in Q3-12 according to data compiled by the World Gold Council (WGC). With jewellery demand remaining muted due to high prices, the popularity of physical gold ETFs and central bank buying provides overall support. Meanwhile, speculative long positions remain high and short low, suggesting speculators generally share our view that risk is skewed to the upside in the current market environment. Lately, US Mint gold (and silver) coin sales (a good indicator of retail interest) have recently recovered slightly, possibly indicating more widespread concerns regarding the rate at which the Fed is once again printing new money. We note that from a purely technical perspective, the gold price has moved in textbook mania fashion over the past decade suggesting the biggest price downside lies just ahead of us. Johnson Matthey, the leading authority on platinum group metals, has published a new interim review which includes bullish forecasts for both platinum and palladium. Currently, the company projects major platinum and palladium market deficits this year, largely due to the strike in South Africa but also other factors. The supply outlook for 2013 appears gloomy which may prove problematic if the global recovery were to gather momentum. Overall, from a fundamental perspective, we recommend palladium and platinum ahead of gold and silver next year, though we recall both markets are very small and unpredictable compared to gold.

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 old 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

Gold and currencies vs. USD

1 0 9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 G L OD E R U

Chart Sources: Bloomberg, SEB Commodity Research

ja -10 n fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -10 n ju l-10 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -11 n fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -11 n ju l-11 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -12 n fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -12 n ju l-12 ag 2 u -1 se -1 p 2 o 2 kt-1 n v-1 o 2 Y D (% T ) M M (% o ) J PY G BP SE K R B U N K O C F H

11

Commodities Monthly

Precious metals
Gold
Physical gold ETF holdings have continued to print new record highs, recently passing above 2,600 tonnes. Speculative net long positions in COMEX gold relative to open interest remain at the upper end of their 10-year historic range with very few speculators holding short positions. After trailing 2011 during the first nine months of this year, US Mint gold coin sales rose 18% y/y in October. Moreover, by the middle of this month, they had already exceeded those for the whole of November last year. During both Q3 and 9M, gold mine supply was slightly below the same period last year at 731.6 tonnes vs. 739.5 tonnes, and 2100.9 tonnes vs. 2107.7 tonnes, respectively, according to WGC data.

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 02 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 01 21 02 50 5 30 0 15 50 10 30 15 00

Silver
For the first time since April last year, physical silver ETF holdings hit a new all-time high of 18854 tonnes in midNovember. Relative to open interest, net speculative long positions in COMEX silver are high but not extreme compared to their 10-year historic range. After trailing 2011 during the first nine months of this year, US Mint silver coin sales increased 3% in October. Furthermore, by the middle of this month, they had already exceeded those for the whole of November last year. The current gold-to-silver ratio of 52.8 is largely unchanged compared to a year ago with only relatively small fluctuations during the intervening period.

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

In their latest review, Johnson Matthey forecast a 2012 platinum market deficit of 400 kozt (total supply: 7,670 kozt), largely due to the South African labour conflict but also weak recycling. The company projects an even larger palladium deficit of 915 kozt (total supply: 8,810 kozt), mainly due to lower than expected Russian supply but also the South African labour dispute and weak recycling. It shares our view that both platinum and palladium balances will remain strained in 2013, particularly if the recovery gains momentum. Serious underinvestment in South African mining due to poor profitability has adversely affected both metals while Russian supply is a major concern for palladium.

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

60 2

60 3

60 4

60 5

60 6

60 7

60 8

60 9

70 0

70 1

(NYMEX, $/ozt)

(COMEX, $/ozt)

(weekly data, tonnes)

Commodities Monthly

Gold futures curve

Palladium futures curve

Precious metals

10 40 d c-1 e 2 G ld h ld g o o in s 1 -1 -1 2 1 6 1 -1 -1 2 0 6 1 -0 -1 2 9 4 Silv r h ld g / 1 e o in s 0 m r-1 a 3

10 50

10 60

10 70

10 80

10 90

20 00

20 10

20 20

20 30

20 40

20 50

20 60

10 70

12 75

15 70

17 75

10 80

12 85

15 80

17 85

10 90

Chart Sources: Bloomberg, SEB Commodity Research

Physical silver and gold ETP holdings

ju -13 n 1 -1 -1 2 1 6 1 -1 -1 2 0 6 1 -0 -1 2 9 4 se -1 p 3 d c-1 e 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 2 ju 2 l-1 ag 2 u -1 se -1 p 2 o 2 kt-1 n v-1 o 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 m r-1 a 8 ju -1 n 8 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

20
ja -1 n 3 a r-1 p 3 ju 3 l-1 1 -1 -1 2 1 6 1 -1 -1 2 0 6 1 -0 -1 2 9 4 o 3 kt-1

25

30

35

40

45

50

55

60

65

70

75

14 50

16 50

18 50

10 60

12 60

14 60

16 60

18 60

10 70

12 70

14 70

d c-1 e 2 m r-1 a 3 ju -13 n se -1 p 3 d c-1 e 3 m r-1 a 4 ju -14 n se -1 p 4 d c-1 e 4 m r-1 a 5 ju -15 n se -1 p 5 d c-1 e 5 m r-1 a 6 ju -16 n se -1 p 6 1 -1 -1 2 1 6 1 -1 -1 2 0 6 1 -0 -1 2 9 4

Pla u h tin m oldin s g

Pa dium ho in lla ld gs

Physical palladium and platinum ETP holdings

13

ja -1 n 0 fe -1 b 0 m r-10 a ap 0 r-1 m 0 aj-1 ju -1 n 0 jul-1 0 au -1 g 0 se -1 p 0 okt-1 0 no 0 v-1 de 0 c-1 ja -1 n 1 fe -1 b 1 m r-11 a ap 1 r-1 m 1 aj-1 ju -1 n 1 jul-1 1 au -1 g 1 se -1 p 1 okt-1 1 no 1 v-1 de 1 c-1 ja -1 n 2 fe -1 b 2 m r-12 a ap 2 r-1 m 2 aj-1 ju -1 n 2 jul-1 2 au -1 g 2 se -1 p 2 okt-1 2 no 2 v-1
ja -1 n 4

d c-1 e 6

Commodities Monthly

Agriculture
As expected, agricultural sector sentiment generally has been mainly bearish, particularly for grains. On average grain prices have fallen to 2011 highs, while remaining exceptionally strong. Most likely, sentiment will continue largely negative. Though tactically cautious due to some remaining weather related risks and protectionist event risk, strategically we are outright bearish. With strong incentives to plant and probably more normal weather conditions going forward prices appear unlikely to remain high in the medium- to long term, a view supported by the fact that net speculative CBOT positions have rolled over with speculators now decreasing long and increasing short bets. With northern hemisphere crops entering their dormant period, the biggest concern is that low soil moisture levels, particularly in the US, could leave them more vulnerable to dry spells during the spring and summer. Consequently, it will be important to monitor winter precipitation. The northern hemisphere autumn harvest is nearly over with production estimates now facts. Following significant downward revisions over the summer the pendulum has swung backward in recent months. Consequently, the grain market knot has loosened slightly. Meanwhile, the soybean situation, particularly, has changed significantly with the inter-crop period now apparently manageable following consecutive upward inventory revisions. Meanwhile the northern hemisphere corn and soybean harvests have almost finished while South American planting progresses. Corn inventories are very tight heading into the inter-crop period. However, cheaper sugar cane ethanol imports to the US should relieve some pressure from ethanol use. Locally dry crop conditions and pending FSU export restrictions support wheat prices relative to those of other grains. Ukrainian exports will almost certainly be restricted this winter, formally or otherwise, while Russia may follow suit with little warning. Considering these risks are already largely discounted and given relatively comfortable inventory levels, we expect rallies triggered by export restrictions to be relatively short lived. According to the NOAA there is currently only a small risk that a full-blown El Nio event will develop going forward. ENSO (El Nio Southern Oscillation) indicators have been neutral or indicated weak El Nio conditions this autumn although it now appears more likely they will be neutral throughout the northern hemisphere winter. We regard this as a very welcome development as it reduces the risk of disturbances in global weather patterns. While the inner workings of ENSO are far from being fully understood, deviations from normal conditions are more likely to negative impact global crop production despite being locally beneficial from time to time.

Grains prices
(CBOT, 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 ja -10 n fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -10 n ju l-10 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -11 n fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -11 n ju l-11 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -12 n fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -12 n ju l-12 ag 2 u -1 se -1 p 2 o 2 kt-1 n v-1 o 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 1 /1 1 2 7 0 Wet ha S yb a s o en 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 2 3

Production and inventory estimate revisions

(WASDE, monthly data, %, 2012/2013)
9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -1 0 -1 1 -1 2 -1 3 -1 4 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

se -1 p 2

ag 2 u -1

n v-1 o 2

o 2 kt-1

ju -1 n 2

jul-1 2

14

Commodities Monthly

Agriculture
Corn
Net speculative long positions in CBOT corn have trended lower for the past three months, driven mainly by decreasing numbers of longs but also by an increasing numbers of shorts. US ethanol producers remain profitable (albeit only just) due to high fuel prices. Domestic production continues to fall back while imports of cheaper sugar cane ethanol are sky-rocketing to post-2008 highs as Brazilian production reaches its seasonal high. Northern hemisphere planting is largely over while southern hemisphere planting progresses well under satisfactory conditions. As expected, the EPA rejected the request to temporarily suspend the US ethanol mandate to ease pressure on the corn market.

Corn price
(CBOT, /bu, front month, weekly closing)
80 5 80 0 70 5 70 0 60 5 60 0 50 5 50 0 40 5 40 0 30 5 30 0 20 5 20 0 10 5 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01
2 1 01
2 1 01

Wheat
CBOT net long speculative positions in wheat continue to decrease, mainly as the result of a decline in long positions. Short positions remain stable at the lower end of the five year range. While winter wheat planting in the northern hemisphere ends and crops become dormant, the Australian harvest is about to pick up speed. So far worries about a further deterioration in weather conditions have proved unjustified. US winter wheat crops have been planted. However, early shoots face tough growing conditions leaving the crops overall state so far worse than last year. However, plenty of time remains for improvement.

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 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 2 01

Soybeans
Unlike corn and wheat, net speculative longs in CBOT soybeans have rebounded slightly, probably due to sharply lower prices opening up for temporary rebounds. While the US soybean harvest is finishing South American planting is progressing well. Chinese customs authorities report soybean imports remain sound despite adverse local economic conditions. The oil-to-bean ratio appears to be rebounding slightly from or at least stabilizing at an exceptionally low level after soybean oil prices were depressed by collapsing palm oil prices. Meal prices have begun to stabilize after rallying on strong feed demand during H1-12.

Soybean price
(CBOT, /bu, front month, weekly closing)
1 0 80 1 0 60 1 0 40 1 0 20 1 0 00 80 0 60 0 40 0 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 2 01

Chart Sources: Bloomberg, SEB Commodity Research

15

21 02

Commodities Monthly

Agriculture
Corn futures curve
(CBOT, /bu)
8 00 7 80 7 60 7 40 7 20 7 00 6 80 6 60 6 40 6 20 6 00 5 80 5 60 m ar-13 m ar-14 m ar-15 de c-12 se p-13 de c-13 se p-14 de c-14 se p-15 de c-15 ju n-13 ju n-14 ju n-15 1 9-14 2-0 1 0-16 2-1 1 1-16 2-1

Wheat futures curve

(CBOT, /bu)
94 0 93 0 92 0 91 0 90 0 89 0 88 0 87 0 86 0 85 0 84 0 83 0 82 0 81 0 80 0 79 0 m ar-13 sep-13 d ec-12 jun-13 1 2-09-14 1 2-10-16 1 2-11-16

m ar-14

Soybean futures curve

(CBOT, /bu)
15 70 10 70 15 60 10 60 15 50 10 50 15 40 10 40 15 30 10 30 15 20 10 20 o 3 kt-1 o 4 kt-1 o 5 kt-1 ju 3 l-1 ju 4 l-1 a r-1 p 3 a r-1 p 4 a r-1 p 5 ja -1 n 3 ja -1 n 4 ja -1 n 5 ju 5 l-1 1 -0 -1 2 9 4 1 -1 -1 2 0 6 1 -1 -1 2 1 6

Sugar
(NYBOT, /lb)
36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 0 20 0 1 20 1 1 20 2 1

Cotton
(NYBOT, /lb)
22 0 20 0 18 0 16 0 14 0 12 0 10 0 8 0 6 0 4 0 2 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 0 20 0 1 20 1 1 20 2 1

Cocoa
(NYBOT, $/t)
38 00 36 00 34 00 32 00 30 00 28 00 26 00 24 00 22 00 20 00 18 00 16 00 14 00 12 00 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 0 20 0 1 20 1 1 20 2 1

Chart Sources: Bloomberg, SEB Commodity Research

16

sep-14

d ec-13

jun-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
-2,3 -2,5 76,8 45,4 -0,6 -0,1 2,5 0,2 -25,7 1,7 -0,4 77,8 51,7 2,3 2,0 2,2 0,1 103,4 84,9 171 -8,1 -4,1 81,1 46,9 0,1 -0,9 -0,8 0,2 104,9 39,8 9,6 50,2 7,4 1,7 102,3 106,1 15,9 20,5 103,2 49,2

Date
2012-09-30 2012-09-30 2012-12-31 2012-10-31 2012-09-30 2012-09-30 2012-10-31 2012-10-31 2012-10-31 2012-10-31 2012-10-31 2012-10-31 2012-10-31 2012-09-30 2012-09-30 2012-10-31 2012-10-31 2011-03-31 2012-11-30 2012-10-31 2012-09-30 2012-09-30 2012-09-30 2012-10-31 2012-09-30 2012-09-30 2012-10-31 2012-09-30 2011-02-28 2012-10-31 2012-10-31 2012-10-31 2012-09-30 2012-10-31 2011-03-31 2012-10-31 2012-10-31 2012-09-30 2011-03-31 2012-10-31

Previous
-1,3 0,9 77,9 46,1 -0,4 -0,2 2,6 0,7 -25,9 2,8 0,2 78,2 51,5 2,1 1,3 2,0 0,6 103,1 82,6 148 -4,6 -1,6 85,8 48,0 3,3 0,1 -0,7 0,1 104,2 40,4 9,2 49,8 7,6 1,9 102,1 100,8 16,3 20,4 103,0 48,8

Date
2012-08-31 2012-08-31 2012-09-30 2012-09-30 2012-06-30 2012-06-30 2012-09-30 2012-09-30 2012-09-30 2012-09-30 2012-09-30 2012-09-30 2012-09-30 2012-06-30 2012-06-30 2012-09-30 2012-09-30 2011-02-28 2012-10-31 2012-09-30 2012-08-31 2012-08-31 2012-08-31 2012-09-30 2012-06-30 2012-06-30 2012-09-30 2012-08-31 2011-01-31 2012-09-30 2012-09-30 2012-09-30 2012-06-30 2012-09-30 2011-02-28 2012-09-30 2012-09-30 2012-06-30 2011-02-28 2012-09-30

Next
2012-12-12 2012-12-12 2012-11-22 2012-12-06 2012-12-06 2012-12-14 2012-12-14 2012-11-22

2012-12-14 2012-12-14 2012-12-03 2012-11-29 2012-12-14 2012-12-14 2012-11-21 2012-12-07 2012-11-30 2012-11-30 2012-11-30 2012-12-10 2012-11-30

2012-12-09 2012-12-01 2013-01-18 2012-12-09

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 (%)
1,3 1,2 1,9 0,1 -1,1 10,5 2,0 -42,3 -12,3 1,5 -3,4 0,1 -14,7 4,1 -36,8 9,4 12,5 28,4 15,4

1m (%)
-3,6 -3,6 -3,5 -3,9 -3,7 -1,7 -4,0 5,6 -5,9 -5,3 -0,3 -6,4 -5,7 1,2 -2,9 -1,7 -1,5 -1,2 -7,4

1q (%)
-1,6 -1,6 -1,5 -2,7 4,1 7,8 -8,2 43,9 -9,3 -6,8 5,9 2,1 2,8 7,6 -14,1 6,1 -8,9 -2,8 -16,5

1y (%)
-2,4 -2,5 -1,5 -4,0 -3,9 -3,4 0,5 -45,0 -15,5 -2,6 -9,6 -1,6 -12,0 -2,0 -37,4 -3,4 13,1 35,9 16,5

5y (%)
2,0 -0,3 24,7 3,5 -8,0 113,6 50,6 -90,5 -8,9 18,9 -23,5 8,0 -48,9 -24,0 N/A 117,9 91,6 11,8 28,3

1284,54 1207,25 1549,08 1493,17 1033,59 2555,27 1782,28 1036,00 86,67 108,95 1951,00 7605,00 15960,00 1920,00 335,00 1714,70 727,00 838,00 1383,25

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, ~22.30 CET (season) December 12 December 11 December 11 December 11 November 29 December 12

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

E-mail
torbjorn.iwarson@seb.se 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

Phone
+46 8 506 234 01 +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

Mobile
+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

COMMODITY RESEARCH DISCLAIMER

This statement affects your rights
This report has been compiled by SEBs Commodity Research, a division within Skandinaviska Enskilda Banken AB (publ) (SEB), to provide background information only. It is confidential to the recipient, any dissemination, distribution, copying, or other use of this communication is strictly prohibited.

Good faith & limitations

Opinions, projections and estimates contained in this report represent the authors present opinion and are subject to change without notice. Although information contained in this report has been compiled in good faith from sources believed to be reliable, no representation or warranty, expressed or implied, is made with respect to its correctness, completeness or accuracy of the contents, and the information is not to be relied upon as authoritative. To the extent permitted by law, SEB accepts no liability whatsoever for any direct or consequential loss arising from use of this document or its contents.

Disclosures
The analysis and valuations, projections and forecasts contained in this report are based on a number of assumptions and estimates and are subject to contingencies and uncertainties; different assumptions could result in materially different results. The inclusion of any such valuations, projections and forecasts in this report should not be regarded as a representation or warranty by or on behalf of the SEB Group or any person or entity within the SEB Group that such valuations, projections and forecasts or their underlying assumptions and estimates will be met or realized. Past performance is not a reliable indicator of future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. This document does not constitute investment advice and is being provided to you without regard to your investment objectives or circumstances. Anyone considering taking actions based upon the content of this document is urged to base investment decisions upon such investigations as they deem necessary. This document does not constitute an offer or an invitation to make an offer, or solicitation of, any offer to subscribe for any securities or other financial instruments.

Conflicts of Interest
SEB has in place a Conflicts of Interest Policy designed, amongst other things, to promote the independence and objectivity of reports produced by its Research departments, which are separated from the rest of SEB business areas by information barriers; as such, research reports are independent and based solely on publicly available information. Your attention is drawn to the fact that a member of, or an entity associated with, SEB or its affiliates, officers, directors, employees or shareholders of such members (a) may be represented on the board of directors or similar supervisory entity of the companies mentioned herein (b) may, to the extent permitted by law, have a position in the securities of (or options, warrants or rights with respect to, or interest in the securities of the companies mentioned herein or may make a market or act as principal in any transactions in such securities (c) may, acting as principal or as agent, deal in investments in or with companies mentioned herein, and (d) may from time to time provide investment banking, underwriting or other services to, or solicit investment banking, underwriting or other business from the companies mentioned herein.

Recipients
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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

www.seb.se