Commodities Monthly

Demand lags fading tail risks

26 FEBRUARY 2013

Commodities Monthly

Demand lags fading tail risks

GENERAL

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

UBS Bloomberg CMCI Sector Indices

(price indices, weekly closing, January 2011 = 100)
10 4 15 3 10 3 15 2 10 2 15 1 10 1 15 0 10 0 9 5 9 0 8 5 8 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 ja -1 n 3 fe -1 b 3
YT (% D ) M (% /M )

Energy and metal prices have increased on higher risk appetite due to more stable US and Chinese growth and decreasing European tail risks. With global growth still weak, despite recent improvements, supply issues will determine which commodities will move higher - or not.

In stria M ta du l e ls Pre ciou M ta s e ls En rg e y Ag ricultu re

ENERGY

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

Driven mainly by improving macroeconomic expectations, Brent crude prices began the year at their highest levels since early 2012. Their outperformance relative to other benchmarks mainly reflects strong investor interest based on its position as the most global benchmark. Due to the lack of Chinese transparency, structural changes and seasonal effects, the actual crude oil market balance is currently very uncertain. Barring significant geopolitical events we expect Brent to trade below $115/b in H1-13.

7 5

INDUSTRIAL METALS

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

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

Following a three month rally, slightly ahead of fundamentals, industrial metals experienced an expected, justified correction in late February. Prices remain high enough relative to production costs, stimulating production and rising inventories due to weak demand. We still expect industrial metals prices to end 2013 higher relative to 2012.

PRECIOUS METALS

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

Gold remains under pressure due to stronger investor demand for higher risk assets, trading towards the low end of its $1550-1800/ozt range prevailing since mid-2011. Short speculative positions in COMEX gold have reached their highest level since the late 1990s while long positions also remain substantial, reflecting a wide divergence in market views. Although prices may rebound in the short-term due to extreme short speculative positioning, we expect a bearish long-term trend. A continued outflow from physical ETF holdings should be considered a strong warning signal.

Winners & Losers over the last month

(%)
1 0 8 6 4 2 0 -2 -4 -6 -8 -1 0 Silver W ea h t N g (U at. as S) G old Ste b ts el ille Tin P tinu la m C rn o C 2 (EU O A) C pp o er C ffe (Ar.) o P er (C nt.) ow o W TI C ocoa (U S) N icke l A m iu lu in m L d ea Pw o er So an ybe s Sgr ua P allad m iu H at. oil (U e S) Bre nt Zinc C n otto G asolin e -1 2

AGRICULTURE

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

After falling during H2-12, grain prices are largely unchanged so far this year, supported by drought related stress. Assuming a generally successful US corn and soybean season, 12-month forward futures prices are on average consistent with our price expectations. USDA Agricultural Outlook Forum estimates for total US corn, wheat and soybean acreage are almost exactly in line with their 2012 outcome.

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

Chart Sources: Bloomberg, SEB Commodity Research

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

Commodities Monthly

General
Global growth is unlikely to be sufficiently strong to boost commodities prices generally, though many selective valuation opportunities remain. Potentially, several may rally due to supply constraints or a greater risk of a steady increase in demand. Backwardated commodities such as Brent crude may also offer solid roll yield this year, provided their entry level is fair. Additionally, there is always the possibility that governments worldwide may embark on a global currency war that eventually inflates all commodity prices. While such a development remains unlikely, it is clearly being discussed, especially with Japan resuming an inflationary, yen depreciating policy. Globally, investors are breathing a sigh of relief, with tail risks declining. Growth in the US and China has stabilized while fears the Euro zone may disintegrate have substantially decreased. As a result, exposure to equities and growth commodities such as oil and metals has surged, boosting valuations. Seemingly however, such flows reflect only marginal investments with most money still invested in the safe havens they have occupied for the last four years of financial crisis. Worldwide growth has stabilized, but remains weak. Euro zone economic activity deteriorated further than expected in Q4-12 and is set to decrease again in 2013, even though the downturn has begun to slow. Moreover, in China politicians are unlikely to follow up the governments latest stimulus measures with further aggressive infrastructure spending and credit expansion during the coming year. Consequently, with its economic activity facing headwinds from a weak European counterpart, we project Chinese GDP growth to slow from 8.1% in 2013 to 7.7% in 2014. Generally, western households, governments and banks still need more time to consolidate their debts. Governments worldwide could decide to print more money to resolve their debt and deficit problems due to the failure of continuing austerity measures. If they do, commodity prices may nominally increase. Otherwise global growth may be insufficient to ensure their substantial, broad-based appreciation over the coming year. Instead we expect diverse commodity price developments based on supply constraints and the sporadic effects of intermittent speculative trading. Since the beginning of November, metals and oil have proved popular, gaining 5% and 6% respectively, while gold and agricultural commodities have lost 8% and 4% respectively. Clearly, investor sentiment has favoured higher growth commodity prices including energy and metals, while abandoning traditional safe havens like gold.

UBS Bloomberg CMCI

(price index, weekly closing)

10 80 15 70 10 70 15 60 10 60 15 50 10 50 15 40 10 40 15 30 10 30 15 20 10 20 15 10 10 10 15 00 10 00 90 5 90 0 80 5 80 0 70 5 20 07 20 08 20 09 21 00 21 01 21 02 21 03

JPM global manufacturing PMI

(monthly, PMIs >50 expansive)
5 8 5 6 5 4 5 2 5 0 4 8 4 6 4 4 4 2 4 0 3 8 3 6 3 4 20 07 20 08 20 09 21 00 21 01 21 02 21 03

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 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
Brent began the year strongly, peaking almost 7% above its 2012 average price ($111.7/b) and at the highest levels since May. Subsequently, it has remained relatively strong although, not exceptionally so given current generally positive market sentiment and lack of major negative macroeconomic surprises so far this year. Still, extreme backwardation and high premiums to other benchmarks suggest Brent is the strongest segment of the global crude oil market, a counterintuitive observation given the worse than expected European recession and increasingly optimistic expectations for China. Several factors cause us to maintain our slightly bearish short- to medium-term forecasts. Firstly, the crude oil price rally has lost momentum. Secondly, so far this year market optimism has not yet been thoroughly stress tested. Thirdly, investors now holding long Brent positions to gain exposure to the rally in risky assets appear to have been more than a marginal driver, partly disconnecting prices from fundamentals. Given all these considerations, we regard upside potential from present levels as limited and the risk of a further correction substantial. Currently, the situation in the Atlantic basin should be supported by weak US and European demand and rapidly rising US domestic production. US Gulf Coast crude imports have therefore hit decade lows. With new US barrels light and sweet, more such barrels (e.g. from Africa) should be available to satisfy European demand, easing pressure on the Brent benchmark. However, this is not what market pricing is signaling. Could it be instead that strong Asian demand impacting the Atlantic basin? Probably not given the wide Brent-Dubai spread. Rather, the explanation probably partly lies in strong demand for an asset well exposed to improving global growth expectations, i.e. Brent. For now, there is considerable confusion regarding the global crude oil market supply and demand balance due to the lack of Chinese transparency. With no official data available concerning its consumption or stock levels it is almost impossible to gauge the extent to which actual use and stock building respectively drive Chinese crude oil import demand. This uncertainty affects the entire system and is reflected in divergent views on market tightness going forward. What we do know is that stock building in China was a major import component last year and that considerable additional volumes of crude will be added during the current decade although the intended rate of stock building in 2013 remains a major unknown factor. With several structural changes taking place in the market it is becoming extremely difficult to measure overall market tightness. What is certain, however, is that crude oil demand is seasonally weaker, not stronger, during H1 and that output cuts are generally needed to balance the market.

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 20 07 20 08 20 09 21 00 21 01 21 02 21 03
n d

N M WI Y EX T IC Bre t E n

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 m j j a s o 2 8-2 2 av . 00 01 g 2 2 01 2 3 01

Chart Sources: Bloomberg, SEB Commodity Research

Current global crude oil demand estimates

2012 (mb/d) 89.8 89.16 88.84 Revision (kb/d) +/-0 -10 +50 2013 (mb/d) 90.7 90.21 89.68 Revision (kb/d) -90 +100 +130

IEA EIA OPEC

SEB average Brent crude oil price forecast

($/b) 2013 2014 2015 Q1 110 Q2 107.5 Q3 110 Q4 110 Full Year 109.4 110.0 115.0

Commodities Monthly

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

Brent futures curve

(ICE, $/b)
15 1 13 1 11 1 19 0 17 0 15 0 13 0 11 0 9 9 9 7 9 5 9 3 9 1 8 9 a r-1 p 3 ju 3 l-1 o 3 kt-1 ja -1 n 4 a r-1 p 4 ju 4 l-1 o 4 kt-1 ja -1 n 5 a r-1 p 5 ju 5 l-1 o 5 kt-1 ja -1 n 6 a r-1 p 6 ju 6 l-1 o 6 kt-1 ja -1 n 7 a r-1 p 7 ju 7 l-1 o 7 kt-1 ja -1 n 8 a r-1 p 8 ju 8 l-1 o 8 kt-1 1 -1 -2 2 2 1 1 -0 -2 3 1 2 1 -0 -2 3 2 2

Gasoline and heating oil prices

(NYMEX, /gal, front month, weekly closing)
45 2 40 0 35 7 30 5 35 2 30 0 25 7 20 5 25 2 20 0 15 7 10 5 15 2 10 0 7 5 20 07 20 08 20 09 21 00 21 01 21 02 21 03 N M G so e Y EX a lin N M H a go Y EX e tin il

Gasoline and distillate inventories

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

US natural gas prices

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

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

1 -1 -2 2 2 1 1 -0 -2 3 1 2 1 -0 -2 3 2 2

fe -1 b 3

fe -1 b 4

fe -1 b 5

o 3 kt-1

o 4 kt-1

o 5 kt-1

fe -1 b 6

Chart Sources: Bloomberg, SEB Commodity Research

o 6 kt-1

ju -1 n 3

ju -1 n 4

ju -1 n 5

ju -1 n 6

Commodities Monthly

Nordic power
Nordic power price
Both German and Nordic future contracts fell steeply in January. A rally in the euro reduced coal prices in euro terms while political uncertainty over the EU emission system led to a 50% fall in the price of emission permits to a low of EUR 3.42/ton at the end of January. Since then power prices in both regions have recovered some of their January losses as the euro EURUSD has weakened again and emission permits have rallied close to 50% to EUR 5/ton on hopes for political intervention. The Nordic power market has remained more resilient than its continental counterparts, with the Nordic vs. Germany power showing spread at all-time lows. Cal-14 Nordic trades at EUR 37.30/MWh and Germany at EUR 42.70/MWh. Since August last year, the spread has narrowed from EUR 11.30/MWh to currently EUR 5.40/MWh. Furthermore, coal and CO2 are also affecting the Nordic market, though the seasonal winter effect and much weaker hydro balance than existed even a few months ago support it. Currently, the hydro balance shows a 16 TWh deficit, compared with a 2 TWh surplus at the beginning of the year. Despite the winter season and prolonged cold weather, Nordic spot prices remain extremely stable with no spikes, averaging EUR 41.39/MWh in January, down EUR 1.55/MWh from December and only EUR 2.00 below their German counterparts. This reflects high availability from Nordic nuclear plants, no transmission grid disruptions and very high reservoir filling levels when winter began. Subsequently, hydro producers have maintained high output levels. Regarding the prompt curve, we see little downside going forward given the weak hydro balance, while further out downside is limited, although further falls in coal and CO2 prices could change that situation. We recommend end users to hedge power, especially in SEK as levels remain very attractive.
(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 07 20 08 20 09 21 00 21 01 21 02 21 03

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 07 20 08 20 09 21 00 21 01 21 02 21 03

EUA price
(ECX ICE, /t, Dec. 13, weekly closing)
2 0 1 9 1 8 1 7 1 6 1 5 1 4 1 3 1 2 1 1 1 0 9 8 7 6 5 4 20 09 21 00 21 01 21 02 21 03

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Industrial metals
With few negative macroeconomic surprises during the start of this year, industrial metal market sentiment remained bullish well into February, despite several familiar tail risks still operating. Under such generally slightly overbought market conditions compared to economic fundamentals, industrial metals were vulnerable to a correction. This was also what occurred last week. Most producers seemed content to operate plants at the January and February price level, which restricted further upside potential. Moreover, soft demand and increasing or already high LME inventories provided little support either. We still expect the LME index to end 2013 above its current level following an uptrend based on more stable foundations in H2-13. However, in the short-term, Chinese demand dynamics following Lunar New Year celebrations will probably determine whether prices will continue to consolidate at this level or continue to correct lower. The most immediate macroeconomic threat remains the upcoming US debt ceiling. In February, industrial metals prices consolidated after having posted new highs for three consecutive months, reporting an LME Index rally of over 10%. Concurrently, US equities performed similarly, though gains in China were twice as large and those in Europe half as great. Equity markets have therefore reflected recent diverse regional sentiment affecting industrial metals. Most indicators suggest and analysts believe that the current Chinese stabilization is real and supportive of metals prices this year. We agree. In turn, while Europe could also start providing support towards the end of the year, we believe it is more likely to do so in 2014, due to its deeper-than-expected recession. Still, given present signs of regional stabilization we regard the region primarily as an upside risk. We expect the impact of the slow but steady US recovery to have a stabilizing effect on industrial metals markets going forward, apart from the debt ceiling event risk. China reports an increasingly solid and credible recovery with growth looking ever more likely to stabilize around 8% annually over the next few years. While industrial production growth is still well below trend, at 10% y/y it remains well above any of its OECD counterparts. In addition, manufacturing PMI continues to improve steadily, trade is improving while the housing market appears to have stabilized. Moreover, other activity indicators (e.g. crude oil processing, steel product output, electricity production and railway freight volumes) are also moving in a positive direction. Negatively, foreign direct investments remain low as other emerging markets currently appear more attractive, while fixed asset investments continue weak due to already substantial overcapacity.

LME index
(weekly closing)
40 60 40 40 40 20 40 00 30 80 30 60 30 40 30 20 30 00 20 80 20 60 20 40 20 20 20 00 10 80 10 60 10 40 20 07 20 08 20 09 21 00 21 01 21 02 21 03

Industrial metal prices

(LME, indexed, weekly closing, January 2011 = 100)
10 3 15 2 10 2 15 1 10 1 15 0 10 0 9 5 9 0 8 5 8 0 7 5 7 0 6 5 6 0 Cpe opr N icke l Alu in m m iu Z c in La ed T in

Price and inventory changes over the last month

(LME)
2 5 2 3 2 1 1 9 1 7 1 5 1 3 1 1 9 7 5 3 1 -1 -3 -5 -7

A m iu lu in m

Cpe opr

La ed

Zinc

Tin

Chart Sources: Bloomberg, SEB Commodity Research

N icke l

Ste l e

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 ja -1 n 3 fe -1 b 3
Price (% ) In e to s (% v n rie )

Commodities Monthly

Industrial metals
Aluminium
While LME aluminium inventories have drifted lower this year they remain very near record highs but with considerable volumes either locked in warehouse financing deals or in long outbound queues. Low physical availability continues to support prices and encourage smelters to produce. While we see good prospects for increased aluminium demand in 2013, we also expect supply to rise, ensuring that the market remains in substantial surplus. Vehicle sales continue to develop well in both the US and China, though European markets remain both weaker and less clear.

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 07 20 08 20 09 21 00 21 01 21 02 21 03
100 10 100 00 90 00 80 00 70 00 60 00 50 00 40 00 30 00 20 00 20 07 20 08 20 09 21 00 21 01 21 02 21 03 500 50 500 00 400 50 400 00 300 50 300 00 200 50 200 00 100 50 100 00 50 00 20 07 20 08 20 09 21 00 21 01 21 02 21 03

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

Copper
Every year the copper market opens with analysts forecasting that this year is different and projecting stronger supply growth. However, project delays, disruptions and disappointing production usually prove them wrong. While we see good potential increases in supply in 2013, following probable oversupply late 2012 and early this year, we still think it a little optimistic to expect a substantial market surplus before 2014. Though LME copper stocks have moved back above 400 kt for the first time since late 2011, they remain well below record highs (948 kt in 2002). The now relatively large inventory buffer is cooling what would otherwise be a highly sensitive copper market, one which has generally led industrial metals movements in recent years.

LME copper price and inventories

(weekly data)
600 500 600 000 500 500 500 000 400 500 400 000 300 500 300 000 200 500 200 000 100 500 100 000 500 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)

Nickel
So far this year, the strong LME nickel inventory uptrend has continued with stocks rapidly approaching all-time highs. With HPAL projects generally producing at or close to intended levels and prices high enough to give Chinese NPI producers reason to ramp up production, the nickel market appears likely to remain in surplus in 2013. Record high nickel ore imports from Indonesia suggest strong Chinese NPI production. Despite still lacklustre production growth, Chinese stainless steel mills have been producing near full capacity so far this year, while European producers are apparently struggling.

LME nickel price and inventories

(weekly data)
200 000 100 800 100 600 100 400 100 200 100 000 800 00 600 00 400 00 200 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)

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Industrial metals
Zinc
The zinc market has been surprisingly strong given current very weak fundamentals. Producers are likely to be content to sell at the present level, which lies well above marginal production costs. Meanwhile, the prolonged rising trend in LME inventories appears to have paused in early 2013 with stocks even decreasing slightly, probably due to flows to other inventories rather than stronger demand. Unlike aluminium, zinc remains physically available. Despite potential improvements on the demand side, the zinc market surplus is likely to remain substantial in 2013, though the supply outlook is less clear on a 2-5 year horizon.

LME zinc price and inventories

(weekly data)
1000 300 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 07 20 08 20 09 21 00 21 01 21 02 21 03 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 08 20 09 21 00 21 01 21 02 300 60 300 30 300 00 200 70 200 40 200 10 100 80 100 50 100 20 90 00 20 07 20 08 20 09 21 00 21 01 21 02 21 03 10 00 10 50 20 00 30 00 20 50 30 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) 40 00 40 50

Ferrous metals (by Maximilian Brodin, Commodities Sales)

After increasing steadily since early December, Chinese steel prices turned downward when markets re-opened after the Chinese Lunar New Year. Iron ore prices however appear unaffected, remaining bullish when trading resumed. Prompt cargoes continue in short supply exerting price pressure. The curve is in steep backwardation with the March contract trading at $152/t and Q4 around $130/t. Scrap markets have recently range traded, finding support at $385/t and resistance at $410/t.

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 20 07 20 08 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 30 00 20 50 20 00 10 50 10 00 50 0 20 09 21 00 21 01 21 02 21 03 40 00

LME tin price and inventories

(weekly data)
350 20 300 00 250 70 200 50 250 20 200 00 150 70 100 50 150 20 100 00 70 50 50 00 20 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)

Chart Sources: Bloomberg, SEB Commodity Research

29 20 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 22 05 25 00 27 05 20 10 22 15 25 10 27 15 20 20 22 25 25 20 27 25 20 30 230 40 250 40 270 40 ju -1 n 6 se -1 p 6 d c-1 e 6 m r-1 a 7 75 70 70 80 75 80 70 90 75 90 80 00 85 00 80 10 85 10 80 20 85 20 80 30 m r-1 a 6 d c-1 e 5 se -1 p 5 ju -1 n 5 m r-1 a 5 d c-1 e 4 se -1 p 4 ju -1 n 4 m r-1 a 4 1 -0 -2 3 2 2 1 -0 -2 3 1 2 d c-1 e 3 se -1 p 3 ju -1 n 3 m r-1 a 3 1 -1 -2 2 2 1

20 30

21 30

22 30

23 30

24 30

25 30

26 30

27 30

28 30

20 00

25 00

20 10

25 10

20 20

25 20

20 30

25 30

20 40

25 40

190 60

100 70

110 70

120 70

130 70

140 70

150 70

160 70

170 70

180 70

190 70

100 80

110 80

(LME, $/t)

(LME, $/t)

(LME, $/t)

m r-1 a 3

ju -1 n 3

se -1 p 3

d c-1 e 3

Commodities Monthly

Lead futures curve

m r-1 a 4

Nickel futures curve

ju -1 n 4

Aluminium futures curve

se -1 p 4

Industrial metals

Chart Sources: Bloomberg, SEB Commodity Research

d c-1 e 4

m r-1 a 5

ju -1 n 5

se -1 p 5

d c-1 e 5

1 -0 -2 3 2 2

1 -0 -2 3 1 2

1 -1 -2 2 2 1

m r-1 a 6

ju -1 n 6

1 -0 -2 3 2 2

1 -0 -2 3 1 2

1 -1 -2 2 2 1

se -1 p 6

d c-1 e 6

m r-1 a 7

(LME, $/t)

(LME, $/t)

(LME, $/t)

290 20 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 1 -0 -2 3 2 2 1 -0 -2 3 1 2 1 -1 -2 2 2 1

210 30

230 30

250 30

270 30

290 30

210 40

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

m r-1 a 3

a r-1 p 3

m j-1 a 3

Tin futures curve

Zinc futures curve

ju -1 n 3

Copper futures curve

ju 3 l-1

ag 3 u -1

se -1 p 3

1 -0 -2 3 2 2

1 -0 -2 3 1 2

1 -1 -2 2 2 1

o 3 kt-1

n v-1 o 3

1 -0 -2 3 2 2

1 -0 -2 3 1 2

1 -1 -2 2 2 1

d c-1 e 3

ja -1 n 4

fe -1 b 4

m r-1 a 4

10

a r-1 p 4

m j-1 a 4

Commodities Monthly

Precious metals
At the time of writing, gold is trading just below $1600/ozt, near the bottom of the range traded since its post mid-2011 nominal high, i.e. $1550-1800/ozt. We have been neutral or bearish towards gold since the muted market reaction to QE3 clearly showed that additional liquidity was unable to drive its price much higher. Regarding developments early this year, the metal has still performed surprisingly poorly as optimistic growth expectations and moderating tail risks have driven investors away from defensive assets. So far, however, the sell-off in physical gold ETFs has been relatively limited. If it continues it would represent a strong sell signal by showing that the consensus view of the entire market, including retail investors, has turned against gold. For the time being we see some rebound potential due to the extreme short speculative positioning but expect the long-term trend to be bearish. While major signs suggesting inflation expectations are increasing remain absent over-confident European policymakers and the inability of US politicians to compromise still seriously threaten system stability. Two major bearish factors have been exerting additional negative pressure on the gold market. Firstly, the January Fed FOMC minutes indicated that QE3 may not be open ended pending a recovery in the employment market. With FOMC members growing more sceptical of the benefits of massive bond buying (currently running at $ 85bn a month) given its potential risks, it may be decreased already in 2013. However, since the start of the crisis, the Fed has remained sufficiently flexible, pragmatically abandoning more hawkish positions whenever market instability required it to do so. Furthermore, the US 10-year real yield once again shows signs of moving higher after trending lower since 2008. If this represents the start of a new trend gold prices will have a very hard time holding ground at current levels. Following recent publication of World Gold Council data for all 2012, we summarize supply and demand developments for last year, compared to 2011 as follows. Total demand fell 173 tonnes to 4405 tonnes, mainly due to lower investment demand (down from 1700 to 1535 tonnes) but also for jewellery (falling from 1972 to 1908 tonnes). In addition, technology demand fell slightly (from 453 to 428 tonnes). In terms of investments, reduced demand for bars and coins was partly offset by increasing physical ETF demand. Central banks remained highly supportive, increasing net buying from 457 to 535 tonnes. Mine supply only rose slightly (from 2836 to 2848 tonnes), highlighting one of the main bullish factors affecting the gold market. Recycling also fell back (from 1669 to 1626 tonnes). Chinese demand was largely unchanged at 200 tonnes in Q4, compared to the same period a year earlier.

Precious metal prices

(COMEX/NYMEX, indexed, weekly closing, January 2011 = 100)
10 7 10 6 10 5 10 4 10 3 10 2 10 1 10 0 9 0 8 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 d c-1 e 2 ja -13 n fe -1 b 3
20 07 20 08 20 08 20 09 20 09 21 00 21 00 21 01 21 01 21 02 21 02

Silv r e Pla u tin m G old Pa d m lla iu

7 0

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 07 21 03

Gold and currencies vs. USD

2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 G L OD EU R JP Y G BP SE K R B U N K O C F H Y D (% T ) M M (% o )

Chart Sources: Bloomberg, SEB Commodity Research

11

Commodities Monthly

Precious metals
Gold
Net speculative long positions in COMEX gold have been trending lower from very high levels last October and have now reached the lowest level since 2008 in relation to open interest. Significantly however, short speculative positions are at the highest level since the 1990s while long positions remain relatively elevated. Obviously, views on future gold prices diverge. Physical gold ETF holdings have gradually decreased from record highs in late 2013 (2633 tonnes) to stand currently at 2560 tonnes. Monthly US Mint gold coin sales remain well above 2012 levels, after reporting negative growth for the past three years.

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 20 07 20 08 20 09 21 00 21 01 21 02 21 03
20 30 P lla iu (le a a d m ft xis) 10 00 90 0 10 80 80 0 70 0 60 0 50 0 40 0 80 0 30 0 20 0 10 0 20 07 20 08 20 09 21 00 21 01 21 02 21 03 50 5 30 0 15 50 10 30 15 00 P tin m (rig t a la u h xis) 25 00

Silver
Net long speculative positions in COMEX silver stand at a relatively neutral level, despite trending lower for several months. Speculative short positions however, have been low since the end of last summer. Despite standing slightly below their January record high (19699 tonnes), physical silver ETF holdings appear to be trending positively, totalling 19529 tonnes. US Mint silver coin sales have remained strong so far this year, compared to the same period in 2012. At 54.7, the gold-to-silver ratio is only slightly above its post Q4-11 average of 53.6.

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 20 07 20 08 20 09 21 00 21 01 21 02 21 03

Platinum & Palladium

Net long speculative positions in platinum and palladium are extremely high with very few shorts reflecting generally positive price expectations for both metals. Physical platinum holdings hit a new all-time high of 51.8 tonnes in February, while those for palladium, at 67.3 tonnes, continued to recover steadily towards previous highs (73.1 tonnes). Since last November, the gold-to-palladium ratio has fallen from 2.9 to below 2.1 as optimistic growth sentiment has driven funds out of safe haven gold and into more growth sensitive palladium. The gold-to-platinum ratio (0.98) has trended similarly, subject to a modest time lag. Due to improved fundamentals and better growth forecasts we remain bullish on platinum and palladium vs. gold and silver, despite recent, fairly usual volatility.

Platinum and palladium prices

(NYMEX, $/ozt, front month, weekly closing)
10 10

Chart Sources: Bloomberg, SEB Commodity Research

12

Commodities Monthly

Precious metals
Gold futures curve
(COMEX, $/ozt)
15 80 12 85 10 80 17 75 15 70 12 75 10 70 17 65 15 60 12 65 10 60 17 55 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 fe -1 b 7 m j-1 a 7 ag 7 u -1 n v-1 o 7 fe -1 b 8 m j-1 a 8 15 50 2 ,0 9 2 ,5 8 2 ,0 8 ju -13 n ju -14 n ju -15 n ju -16 n m r-1 a 3 m r-1 a 4 m r-1 a 5 m r-1 a 6 m r-1 a 7 se -1 p 3 d c-1 e 3 se -1 p 4 d c-1 e 4 se -1 p 5 d c-1 e 5 se -1 p 6 d c-1 e 6 ju -17 n se -1 p 7 a r-1 p 4 d c-1 e 7 1 -1 -2 2 2 1 1 -0 -2 3 1 2 1 -0 -2 3 2 2

Silver futures curve

(COMEX, $/ozt)
3 ,0 3 3 ,5 2 3 ,0 2 3 ,5 1 3 ,0 1 3 ,5 0 3 ,0 0 2 ,5 9 1 -1 -2 2 2 1 1 -0 -2 3 1 2 1 -0 -2 3 2 2

Palladium futures curve

(NYMEX, $/ozt)
70 4 75 3 70 3 75 2 70 2 75 1 70 1 75 0 70 0 65 9 60 9 65 8 60 8 m r-1 a 3 ju -13 n m r-1 a 4 se -1 p 3 d c-1 e 3 1 -1 -2 2 2 1 1 -0 -2 3 1 2 1 -0 -2 3 2 2

Platinum futures curve

(NYMEX, $/ozt)
11 70 19 60 17 60 15 60 13 60 11 60 19 50 17 50 15 50 13 50 o 3 kt-1 a r-1 p 3 ja -1 n 4 ju 3 l-1 1 -1 -2 2 2 1 1 -0 -2 3 1 2 1 -0 -2 3 2 2

Physical silver and gold ETP holdings

(weekly data, tonnes)
25 60 20 60 25 50 20 50 25 40 20 40 25 30 20 30 25 20 20 20 25 10 20 10 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 ja -1 n 3 fe -1 b 3 25 00 150 70 100 80 150 80 G ld h ld g o o in s S e h ld g ilv r o in s

Physical palladium and platinum ETP holdings

(weekly data, tonnes)
2 0 0 75 00 1 5 0 70 90 100 90

Pa d lla ium ho in ld gs Pla m h lding tinu o s

65 60 55 50 45

1 0 0 40 70

Chart Sources: Bloomberg, SEB Commodity Research

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 de 2 c-1 ja -1 n 3 fe -1 b 3

1 5 0 35 60

13

Commodities Monthly

Agriculture
While grain prices have fallen back slightly since the January edition of Commodities Monthly, the strong downtrend that dominated the second half of last year has been broken, with current average grain prices largely unchanged so far this year. Front contracts have been supported by the persistent US drought threatening spring planting and drought related stress affecting the South American crop outlook. On, average 12-month forward futures prices are now fairly consistent with our long-term bearish expectations if one assumes a reasonably successful outcome to the US corn and soybean season. Although the current situation does not justify higher grain prices, the key to the outcome of the forthcoming season lies in Midwest soil moisture conditions existing when corn planting starts in April. Despite slightly improved conditions lately, the implications of another drought year, especially for corn, are too serious to disregard. We therefore remain short-term cautious pending further improvements. The USDA Agricultural Outlook Forum estimates total US wheat, corn and soybean acreage in 2013 will be largely unchanged from last year, i.e. 230.0 million acres vs. 230.1 in 2012. However, actual planted corn and soybean acreage will depend considerably on the soil moisture situation at the time of planting, making forecasting extremely difficult. The next, and more reliable estimate, will be contained in the Prospective Plantings report (March 28), which is based on actual interviews with farmers. El Nio Southern Oscillation (ENSO) conditions are expected to remain neutral during the Northern hemisphere spring even though weather models and sea temperature measurements are slightly skewed towards El Nio conditions. US soil moisture has improved locally in both the Midwest and Great Plains. However, so far, there are no clear signs the current drought is receding from these core US agricultural production sites. Weather conditions in Europe and the FSU are fairly satisfactory despite several dry areas. In South America dry conditions are particularly stressing the developing Argentinean soybean crop. With the harvest not scheduled to start until May, there is still plenty of time for persistent drought conditions to damage the crop. Consequently, production estimates could suffer further downgrades. Meanwhile, logistical problems in South America together with Chinese economic stabilization is likely to divert some soybean import demand to the US.

Grains prices
(CBOT, indexed, weekly closing, January 2011 = 100)
15 3 10 3 15 2 10 2 15 1 10 1 15 0 10 0 9 5 9 0 8 5 8 0 7 5 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 d c-1 e 2 ja -13 n fe -1 b 3 Wet ha So e n yb a s C rn o 0 /0 0 1 0 /0 1 2 0 /0 2 3 0 /0 3 4 0 /0 4 5 0 /0 5 6 0 /0 6 7 0 /0 7 8 0 /0 8 9 0 /1 9 0 1 /1 0 1 1 /1 1 2 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 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 n v-1 o 2 se -1 p 2 o 2 kt-1 d c-1 e 2 ag 2 u -1 fe -1 b 3 ju -1 n 2 jul-1 2 ja -1 n 3

Chart Sources: Bloomberg, USDA, SEB Commodity Research

14

Commodities Monthly

Agriculture
Corn
The USDA Agricultural Outlook Forum projected a modest decrease in US 2013 corn acreage from 97.2 million acres in 2012 (a multi-decade high) to 96.5 million acres. This forecast is however very unreliable given the current drought situation. Net long speculative positions in CBOT corn have continued to fall back due to increasing short positioning. Long positions remain relatively high. Due to poor profitability, some US ethanol production has already been idled and more could shut down. While of course supporting ethanol prices, this also reduces stress 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 07 20 08 20 09 21 00 21 01 21 02 21 03

Wheat
The USDA Agricultural Outlook Forum projected a small increase in US 2013 wheat acreage from 55.7 million acres in 2012 to 56.0 million acres this year. Net speculative positions in CBOT wheat have been negative since the end of 2012, with an almost equal and substantial number of short and long positions. US winter wheat conditions pre-dormancy were terrible. As vegetation recovers heading into spring it will once again become possible to follow developments in the USDA Crop Progress report, the first 2013 issue of which will be published on April 1.

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
2 7 00 2 8 00 2 9 00 2 0 01 2 1 01 2 2 01 2 3 01

Soybeans
The USDA Agricultural Outlook Forum forecast a small increase in US 2013 soybean acreage from 77.2 million acres in 2012 to 77.5 million acres this year although, given the potential effects of the regional drought, this estimate may prove very unreliable. Net long speculative positions in CBOT soybeans are high but not especially so relative to open interest. However, both long and short positions are elevated relative to 5-year historic averages. The oil-to-bean ratio remains near decade lows due to an oversupply of vegetable oil. Meanwhile, the meal-tobean ratio is still high and trending upward once again after correcting earlier this year.

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 2 7 00 2 8 00 2 9 00 2 0 01 2 1 01 2 2 01 2 3 01

Chart Sources: Bloomberg, SEB Commodity Research

15

Commodities Monthly

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

Wheat futures curve

(CBOT, /bu)
85 0 84 0 83 0 82 0 81 0 80 0 79 0 78 0 77 0 76 0 75 0 74 0 73 0 72 0 71 0 m ar-13 m ar-14 sep-13 sep-14 d ec-13 d ec-14 jun-13 jun-14

12-12 -21 13-01 -22 13-02 -22

Soybean futures curve

(CBOT, /bu)
17 45 15 40 12 45 10 40 17 35 15 30 12 35 10 30 17 25 15 20 12 25 m r-1 a 3 m r-1 a 4 m r-1 a 5 se -1 p 3 d c-1 e 3 se -1 p 4 d c-1 e 4 ju -1 n 3 ju -1 n 4 1 -1 -2 2 2 1 1 -0 -2 3 1 2 1 -0 -2 3 2 2

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

Cotton
(NYBOT, /lb)
22 0 21 0 20 0 19 0 18 0 17 0 16 0 15 0 14 0 13 0 12 0 11 0 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 20 7 0 20 8 0 20 9 0 20 0 1 20 1 1 20 2 1 20 3 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 20 7 0 20 8 0 20 9 0 20 0 1 20 1 1 20 2 1 20 3 1

Chart Sources: Bloomberg, SEB Commodity Research

16

Commodities Monthly

Commodity related economic indicators

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

Current
-2,4 0,7 77,2 47,8 -0,9 -0,6 2,2 -1,0 -23,6 2,1 -0,1 79,1 53,1 1,5 -0,1 1,6 0,0 103,4 76,3 157 -7,9 2,4 84,6 47,7 0,3 -0,1 -0,6 0,1 104,9 43,3 10,3 50,4 7,9 2,0 102,3 103,7 15,4 20,5 103,2 51,5

Date
2012-12-31 2012-12-31 2013-03-31 2013-02-28 2012-12-31 2012-12-31 2012-12-31 2013-01-31 2013-02-28 2013-01-31 2013-01-31 2013-01-31 2013-01-31 2012-12-31 2012-12-31 2013-01-31 2013-01-31 2011-03-31 2013-02-28 2013-01-31 2012-12-31 2012-12-31 2012-12-31 2013-01-31 2012-12-31 2012-12-31 2013-01-31 2012-12-31 2011-02-28 2013-01-31 2012-12-31 2013-01-31 2012-12-31 2013-01-31 2011-03-31 2012-12-31 2013-01-31 2012-09-30 2011-03-31 2013-01-31

Previous
-4,0 -0,7 76,9 47,9 -0,6 -0,1 2,2 0,4 -23,9 2,9 0,4 79,3 50,2 2,6 3,1 1,7 0,0 103,1 73,8 196 -5,5 -1,4 82,2 45,0 0,4 -1,0 -0,6 -0,4 104,2 39,1 10,1 50,6 7,4 2,5 102,1 105,1 15,0 20,4 103,0 50,1

Date
2012-11-30 2012-11-30 2012-12-31 2013-01-31 2012-09-30 2012-09-30 2012-11-30 2012-12-31 2013-01-31 2012-12-31 2012-12-31 2012-12-31 2012-12-31 2012-09-30 2012-09-30 2012-12-31 2012-12-31 2011-02-28 2013-01-31 2012-12-31 2012-11-30 2012-11-30 2012-11-30 2012-12-31 2012-09-30 2012-09-30 2012-12-31 2012-11-30 2011-01-31 2012-12-31 2012-11-30 2012-12-31 2012-09-30 2012-12-31 2011-02-28 2012-11-30 2012-12-31 2012-06-30 2011-02-28 2012-12-31

Next
2013-03-13 2013-03-13 2013-03-01 2013-03-06 2013-03-06 2013-02-28 2013-02-28 2013-02-27

2013-03-15 2013-03-15 2013-03-01 2013-02-28 2013-03-15 2013-03-15 2013-03-01 2013-03-08 2013-02-28 2013-02-28 2013-02-28 2013-03-08 2013-03-01

2013-03-09 2013-03-01 2013-04-15 2013-03-09

17

Commodities Monthly

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

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

1m (%)
-2,1 -2,1 -2,3 -0,1 -2,7 -8,1 -3,6 -10,3 -3,2 1,5 -1,3 -4,1 -2,3 1,6 -6,2 -7,1 -5,3 -8,2 0,7

1q (%)
-0,7 -0,7 -0,7 2,3 3,3 -10,2 -5,3 -31,0 6,6 2,9 6,1 1,4 1,9 8,9 -7,6 -9,0 -6,8 -15,4 3,8

1y (%)
-5,3 -5,4 -5,0 -4,5 -7,8 -12,2 -3,6 5,1 -12,4 -7,2 -10,2 -7,5 -15,5 1,0 -40,8 -11,2 8,1 10,9 14,9

5y (%)
-11,6 -13,0 7,9 -1,4 -12,5 62,4 9,2 -89,7 -5,7 17,6 -29,9 -6,4 -40,2 -16,4 N/A 66,4 32,2 -31,9 2,9

1293,09 1215,03 1559,68 1552,81 1075,75 2324,70 1715,20 740,00 93,13 114,10 2048,00 7801,00 16975,00 2088,00 305,00 1572,40 690,25 715,00 1461,25

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) March 13 March 12 March 12 March 8 March 21 May 31

Contact list
COMMODITIES
Torbjrn Iwarson Peter Lvaas 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 Head of Commodities Norway Chief analyst Strategist Corporate Institutional Corporate/Institutional Corporate/Institutional Corporate/Institutional Corporate/Institutional

E-mail
torbjorn.iwarson@seb.se peter.lovaas@seb.no

Phone
+46 8 506 234 01 +47 22 82 72 70

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 maternity +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 leave +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
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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.

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19

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