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ANZ Commodity Daily 755 031212

ANZ Commodity Daily 755 031212

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Published by: Belinda Winkelman on Dec 03, 2012
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12/04/2012

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ANZ RESEARCH
COMMODITY DAILY
 
Contacts: Mark Pervan +613 8655 9243 | mark.pervan@anz.com Nicholas Trevethan +65 6681 8714 | nicholas.trevethan@anz.comNatalie Rampono +613 8655 9258 | natalie.rampono@anz.com
Overnight Wrap
December 3, 2012
 
Oil mixed - hopes of US budget deal still uncertain
 
Gold down, but physical demand improving
 
Metals up on positive China PMI read
 
Bulks mixed – thermal up, coking & iron ore downKEY THEMES
 
 
Overnight themes
– It was a relatively quiet trading sessionfor markets on Friday, with US equities largely range-bound,but European equities retreating. Commodities were mostlyfirmer ahead of China’s PMI numbers. However, part of thegains were negatively impacted by mildly weaker than expectedUS dataflow, distorted by Hurricane Sandy. China’s official PMIrose to 50.6 (Mkt: 50.8, Last: 50.2) in November reaching itshighest level in seven months. The result was driven by a risein new orders and export demand. Activity levels in Chinaappear to have based and a mild cyclical upturn is underway,with our China team suggesting political uncertainties havedissipated after a smooth leadership transition and areforecasting GDP growth of 8% in Q4 2012. A RRR cut inDecember is still seen as possible due to the large volume of reverse repos maturing and seasonally tight liquidity towardsyear-end. US personal income and spending data were weakerthan expected in October. Personal spending declined by 0.2%m/m (Mkt: 0.0% m/m) while incomes were flat (+0.2% m/mexpected). The Chicago PMI printed at 50.4 in November,against market expectations of 50.5.
 
Weekly Ranked Price Moves (%)
 
(2.8)(2.2)(2.0)(1.1)(0.4)(0.1)0.50.72.52.82.84.54.86.2(4.0) (2.0) 0.0 2.0 4.0 6.0 8.0Iron OreGoldSilverPlatinumBaltic FreightBrent OilUSD (DXY)S&P 500WTI OilCoal (NEWC)LeadCopperZincTinNickel(0.0)
 
Note: Coal (NEWC) is the physical weekly price changeSources: Bloomberg, globalCOAL
 
y
 
Benchmark crude oil prices firmed
on Friday, but postedmixed weekly results. US WTI was the better performer,supported by hopes of a US budget agreement by the end-of-year deadline – although mixed headlines continued togenerate uncertainty. Gains in equity markets and a weaker USdollar were also supportive. According to some reports, risingtensions in the Middle East sparked some short-covering aheadof the weekend, but lagging US futures data showed a 7% buildin non-commercial short oil positions and non-commercial longsliquidating by 4%, implying a bearish view on prices. ImprovingChinese PMI over the weekend should put a floor on prices intrading today, but ongoing uncertainty in the US will likelygenerate more sideway moves.
 
y
 
Gold declined on Friday
and ended 2.2% lower for the weekas ongoing uncertainty over the US ‘fiscal cliff’ continued toweigh on already jittery market sentiment. US data wasgenerally weak on Friday, impacting prices. Reports of strongNovember US coin sales were unable to shake off thenervousness surrounding US budget talks. Physical demand forgold also appears to be improving, with bargain-huntingIndians buying on the dips. The World Gold Council said Indiandemand would improve in 2013 and Chinese gold demand togrow by 10%, boosting sentiment. Prices could improve todayafter Chinese manufacturing data over the weekend posted apositive result, but ongoing volatility is likely, due to US budgetheadlines and key US and EU manufacturing data releases thisweek.
 
y
 
Base metals posted strong weekly gains
, on optimismdemand would improve in China. Prices were supported byspeculation that China’s new leadership will encourage greaterconsumption after a pledge to boost urbanisation. China’smanufacturing data on Saturday also showed the strongestread in 7-months, confirming market expectations the economyhas based and is improving. Copper prices hit a 5-week high of USD7,979/t, while aluminium ended the session comfortablyabove the USD2,000/t level on ongoing supply tightness in thefront-end. Aluminium was additionally supported after pricesbroke through the 200-day moving average. Longer termcopper sentiment was buoyed after Codelco said encouragingsigns of a recovery in China should boost demand in 2013.Codelco said their supplies should rise slightly to around 1.7mt,contributing to a small 22,500t global copper surplus – but theydo not believe prices will be impacted by the mild surplusposition, because it could change quickly.
y
 
Bulks were mixed
. Last week Newcastle physical thermal coalprices were up 2.5%, but iron ore and coking coal prices fell2.8%. Australian thermal coal prices gained on improvedactivity on-screen ahead of January annual term talks betweenproducers and Japanese utilities. Traders were reportedlycovering short positions ahead of year-end. Premium hardcoking coal prices ended the week lower, in line with softer ironore and Chinese domestic steel markets. Coking coal spotmarket activity appears to be relatively quiet ahead of firstquarter term negotiations, which is expected to be struck thisweek. Inventories in China appear to have been replenished.
 
 
Price Data
Close1 Day1 Wk1 Mth3 MthClose1 Day1 Wk1 Mth3 MthLME BASE METALS
(USD/t)
LME BASE METALS
(kt)
Aluminium 2,094 1.4 6.3 10.2 11.2 Aluminium 5,207 0.3 0.6 2.4 6.9Copper 7,979 1.2 2.8 4.1 4.9 Copper 248(0.4) (0.7)2.1 7.9Nickel 17,598 3.8 6.2 10.5 10.7 Nickel 136 0.0 1.9 4.8 14.7Zinc 2,029 0.8 4.5 10.5 11.8 Zinc 1,199 0.1(0.1)2.5 26.1Lead 2,258 1.6 2.8 7.6 14.9 Lead 362(0.0)0.2 13.0 16.8Tin 21,862(0.1)4.8 8.4 12.8 Tin 12 0.4 2.7 0.6 3.7
PRECIOUS METALS
(USD/oz)
Close1 Day1 Wk1 Mth3 Mth
Gold 1,715(0.6) (2.2)2.2 1.3Gold (A$/oz) 1,644(0.6) (1.9)1.3 0.3 S&P 500 1,416 0.0 0.5 0.1 0.7Silver 33.4(2.4) (2.0)8.1 5.3 VIX Volatility Index 16 5.4 4.8(9.8) (9.2) Platinum 1,603(0.6) (1.1)3.8 4.1 CRB Index 299(0.1) (0.0)2.3(3.4) Palladium 684(0.1)2.7 13.6 8.5 LME Metals Index 3,472 1.4 3.8 6.4 7.6
ENERGY
(USD/bbl)
Close1 Day1 Wk1 Mth3 Mth
WTI Oil* 88.9 1.4 0.7 4.8(7.8)Brent Oil* 111.2 0.8(0.1)5.3(2.9)Baltic Freight Rate 1,086(1.0) (0.4)10.1 54.5 Sing Gasoil 0.5% 125.7 0.0 0.2 1.3(5.3)Baltic Capesize 2,199(1.9) (3.9) (4.6)87.6 Sing Fuel Oil
180cst
 
(US$/t)
606 0.0(2.3) (1.7) (12.1)Baltic Panamax 980(1.4) (3.3)27.9 33.3
OTHER
(USD/t)
Baltic Handysize 448 0.4 3.9 6.2(2.4)China HR Coil (RmB/t) 3,864(0.4) (0.7)2.6 13.5
Close1 Day1 Wk1 Mth3 Mth
Richards Bay Coal API4 90.7 0.1 1.2 9.7 3.0Newcastle Coal** 86.1 2.5 8.5(2.6)DXY - USD Index 80.2(0.1) (0.0) (0.5) (1.3) Australia Coking Coal** 156.8 (2.8)4.7(3.1)AUD/USD - Aussie 1.043(0.0) (0.3)0.9 1.0 Iron Ore Spot 115.6(1.1) (2.8) (3.7)29.3 NZD/USD - Kiwi 0.820(0.2) (0.4) (0.6)2.1
% ChangeCurrencies% ChangeKey Indices% ChangeFreightCommoditiesInventories% Change% Change
 
*
Front-month futures 
**
Weekly prices 
Sources: Bloomberg, globalCOAL, Argus Coal
 
US Commodity Futures Trading Commission (CFTC) Data
 
Spot1 Wk1 Mth3 Mth6 Mth12 MthSpot1 Wk1 Mth3 Mth6 Mth12 MthGold
(t)
WTI Crude Oil
(mbbls)Long 752 714 720 561 507 617 Long 356 359 375 372 352 325Short 94 84 83 125 174 75 Short 176 132 122 94 111 106Net Position 658 629 637 436 333 542 Net Position 180 227 253 277 241 220Open Interest 2,020 2,257 2,235 2,014 2,264 2,012 Open Interest 1,522 1,499 1,579 1,470 1,443 1,303
Silver
(t)
Natural Gas
(1000 mmbtu)Long 8,152 7,523 7,444 5,527 4,358 3,858 Long 2,595 2,473 2,937 2,427 2,471 1,700Short 1,449 1,099 1,142 2,073 2,440 1,288 Short 3,549 3,306 3,544 3,115 3,606 3,409Net Position 6,703 6,423 6,302 3,454 1,919 2,570 Net Position(954) (833) (607) (688) (1,135) (1,709)Open Interest 28,165 30,465 28,882 26,140 24,745 20,529 Open Interest 11,992 12,049 12,567 11,248 12,606 9,816
Copper
(kt)
RBOB Gasoline
(m gallons)Long 432 449 553 462 456 300 Long 4,561 4,297 4,386 4,202 3,862 3,136Short 466 488 475 608 570 337 Short 1,431 1,386 1,467 1,223 680 1,006Net Position(34) (39)78(146) (115) (37)Net Position 3,130 2,912 2,918 2,980 3,182 2,130 Open Interest 1,650 1,678 1,744 1,696 1,704 1,275 Open Interest 11,914 12,603 12,420 13,266 13,884 11,529
ENERGYMETALS
ActualActual
 Note: Closing positions at 20 November 2012 – data has not been updated yet due to Thanksgiving HolidaysSource: Bloomberg
 
 
 
Data Calendar – Week Beginning 26 November 2012
DATECOUNTRYDATA/EVENTPERIODMARKETANZACTUALLASTGMTAEDT
1-Dec CH Manufacturing PMI Nov 50.6 -- 50.6 50.2 01:00 12:00Monday CH Non-manufacturing PMI Nov -- -- -- 55.5 01:00 12:003-Dec HSBC Manufacturing PMI Nov 50.4 -- -- 49.5 01:45 12:45EU PMI Manufacturing Nov F 46.2 -- -- 46.2 09:00 20:00GE PMI Manufacturing Nov F 46.8 -- -- 46.8 08:55 19:55(3-5 Dec) -- --US Markit US PMI Final Nov 51.4 -- -- -- 13:58 00:58Construction Spending m/m Oct 0.4% -- -- 0.6% 15:00 02:00ISM Manufacturing Nov 51.4 -- -- 51.7 15:00 02:00ISM Prices Paid Nov 54.0 -- -- 55.0 15:00 02:00Tuesday EU 09:00 20:004-Dec Euro-Zone PPI m/m Oct 0.0% -- -- 0.2% 10:00 21:00Euro-Zone PPI y/y Oct 2.5% -- -- 2.7% 10:00 21:00US ISM New York Nov -- -- -- 45.9 14:45 01:4515:45 02:45Wednesday CH HSBC Services PMI Nov -- -- -- 53.5 01:45 12:455-Dec EU PMI Composite Nov F 45.8 -- -- 45.8 09:00 20:00PMI Services Nov F 45.7 -- -- 45.7 09:00 20:00Euro-Zone Retail Sales m/m Oct 0.0% -- -- -0.2% 10:00 21:0014:00 01:00-- --GE PMI Services Nov F 48.0 -- -- 48.0 08:55 19:55US MBA Mortgage Applications 30-Nov -- -- -- -0.9% 12:00 23:00ADP Employment Change Nov 140k -- -- 158k 13:15 00:15Nonfarm Productivity Q3 F 2.7% -- -- 1.9% 13:30 00:30Factory Orders Oct 0.0% -- -- 4.8% 15:00 02:00ISM Non-Manfacturing Composite Nov 53.7 -- -- 54.2 15:00 02:00Thursday EU Euro-Zone GDP sa q/q Q3 P -0.1% -- -- -0.1% 10:00 21:006-Dec Euro-Zone GDP sa y/y Q3 P -0.6% -- -- -0.6% 10:00 21:00
ECB Announces Interest Rates
06-Dec 0.8% -- -- 0.8% 12:45 23:45GE Factory Orders m/m sa Oct 1.0% -- -- -3.3% 11:00 22:00Factory Orders y/y nsa Oct -5.6% -- -- -4.7% 11:00 22:00US Continuing Claims 24-Nov -- -- -- 3287k 13:30 00:30Initial Jobless Claims 01-Dec 380k -- -- 393k 13:30 00:30Household Change in Net Worth Q3 -- -- -- -$322b 17:00 04:00Friday GE Labor Costs Seas. Adj. q/q Q3 -- -- -- 1.5% 07:00 18:007-Dec Labor Costs Workday Adj y/y Q3 -- -- -- 2.5% 07:00 18:00Industrial Production y/y (nsa wda) Oct -1.7% -- -- -1.2% 11:00 22:00Industrial Production m/m sa Oct -0.5% -- -- -1.8% 11:00 22:00US Change In Nonfarm Payrolls Nov 90K -- -- 171K 13:30 00:30Change In Private Payrolls Nov 100K -- -- 184K 13:30 00:30Unemployment Rate Nov 7.9% -- -- 7.9% 13:30 00:30Underemployment Rate (U6) Nov -- -- -- 14.6% 13:30 00:30U. of Michigan Confidence Dec P 82 -- -- 82.7 14:55 01:55Consumer Credit Oct $10.0b -- -- $11.4b 20:00 07:00Saturday EU 14:30 01:308-Dec -- -- --Sunday CH Consumer Price Index y/y Nov 2.1% 2.0% -- 1.7% 01:30 12:309-Dec Producer Price Index y/y Nov -1.9% -2.8% -- -2.8% 01:30 12:30Fixed Assets Inv Excl. Rural YTD y/y Nov 20.8% -- -- 20.7% 05:30 16:30Industrial Production y/y Nov 9.8% 10.0% -- 9.6% 05:30 16:30Industrial Production YTD y/y Nov -- -- -- 10.0% 05:30 16:30Retail Sales y/y Nov 14.7% 14.5% -- 14.5% 05:30 16:30Retail Sales YTD y/y Nov -- -- -- 14.1% 05:30 16:30
ECB's Constancio Speaks In Santiago, ChileMerkel Attends CDU Annual Party CongressECB's Asmussen Speaks in BrusselsSpain Auctions 2015, 2019 and 2022 BondsFed's Tarullo (voter) Speaks at the Brookings InstitutionECB's Nowotny Speaks on Future of Euro Zone in Vienna
 Sources: Bloomberg, ANZ Research

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