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ANZ Commodity Daily 819 080513

ANZ Commodity Daily 819 080513

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Published by: Belinda Winkelman on May 08, 2013
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ANZ RESEARCH
COMMODITY DAILY
 
Contacts: Mark Pervan +613 8655 9243 | mark.pervan@anz.com Victor Thianpiriya +65 6681 8869 | victor.thianpiriya@anz.comNatalie Rampono +613 8655 9258 | natalie.rampono@anz.com Paul Deane +613 8655 9078 | paul.deane@anz.com
MARKET HIGHLIGHTS
May 8, 2013
 COMMODITY WRAP
 
Brent crude follows WTI lower
 
Gold trades USD30/oz range in volatile night
 
Base metals slipped ahead of China prelim import data
 
BHP settles Q2 coking coal contract at USD154-157/t
KEY THEMES
 
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Overnight themes
– Commodities showed a mixedperformance overnight. Better-than-expected German factoryorders for March supported positive sentiment in Europe withequities trading higher. German factory orders rose 2.2%m/m in March, above market expectations of a modest fall.This data is an encouraging sign for economic activity in theregion and is likely to see the market revise up its forecastsfor tonight’s German industrial production for March. In theUS, the JOLTS job openings series consolidated in March afterrising solidly in February. Along with other labour marketindicators, the data signals the US labour market is continuingto recover. Today, markets will watch China’s trade data veryclosely. ANZ expects the trade balance to come in atUSD12bn, below market expectations of USD16bn. Although,we think commodity imports could surprise on the upside,with price declines in April opening the opportunity to importcheaper global supplies.
 
OVERNIGHT RANKED PRICE MOVES (%)
 
(1.5)(1.4)(1.1)(0.8)(0.7)(0.6)(0.2)(0.2)(0.1)(0.1)0.00.50.51.31.5(2.0) (1.5) (1.0) (0.5) 0.0 0.5 1.0 1.5 2.0Platinum TinGoldZincLeadWTI OilSilverNickelUSD (DXY)CopperAluminiumCoal (NEWC)S&P 500Baltic FreightIron ore
 
Note: Coal (NEWC) refers to front month futures *UK on holidays, exchange closedSources: Bloomberg, ANZ Commodity Strategy
y
 
Crude oil traded lower.
Trading in both crudes was volatileovernight. Profit taking ensued after WTI crude hit a 1-monthhigh of USD96.20/bbl and prices dropped USD1.34/bbl in 20minutes, coinciding with a 0.4% drop in the S&P500. Brentcrude followed lower, though that is where the similaritiesend. WTI retraced half of that drop to trade at USD95.50/bbl.Brent however, remains near session lows at USD104.0/bbl.In a monthly report, the US EIA cut its forecast for global oildemand growth in 2013 and forecasts Brent crude to averageUSD103.08/bbl in Q2 13 and USD104/bbl in Q3 13, downfrom USD108/bbl and USD107/bbl respectively last month.
y
 
Gold is trading around USD1,450/oz this morning
,USD20/oz below this time yesterday. Spot gold had a volatilesession overnight which saw prices trade a USD30/oz rangebetween USD1,470/oz and USD1,440/oz. Immediate sellingon the NY open took gold straight through the USD1,460/ozinterim support level and headed straight forUSD1,441.41/oz, the low of the day. It took a couple of triesbefore the market stabilised above USD1,450/oz, where ittraded for the remainder of the session. Physical flows weregood, though did little to support the market amid heavyselling. For today, downside support is seen atUSD1,441.40/oz, the overnight and May 1st low, withUSD1,456/oz the interim resistance.
 
y
 
Base metals slipped slightly
ahead of China’s preliminarycommodity import data release today. We believe April’sChina trade data could surprise on the upside if Chinesetraders have taken advantage of the widening positivearbitrage between Shanghai and LME metal prices over thepast 6-8 weeks. Other reports suggest the copper scrapmarket is tight, with scrap prices trading at parity or higherthan refined material for the first time since April 2009 – theimpact has seen China’s Jiangxi Copper idle its 100ktpa scrapfacility over the weekend and bring forward scheduledmaintenance to two other plants. Although tightness in thescrap market could support copper prices more generally, wefeel with the surplus refined copper position and sky-highstockpiles means that a decent pick-up in demand will berequired to normalise supplies and support prices.
y
 
Bulk commodities firmed
. The spot iron ore market wassupported by firming China steel prices. In coking coal, BHPsettled June contract prices for premium hard coking coal ataround USD154-157/t FOB Australia. This is consistent withour forecasts of USD155/t for the second quarter, with acautious China demand outlook dictating sentiment. We wouldexpect prices to firm in the second half as seasonal demandstarts to improve, although the slow start to the normallybetter second quarter suggests most traders will want to seemore consistent (positive) Chinese data before wading in.
 
 
 
COMMODITY DATA
PRICE DATA
Close1 Day1 Wk1 Mth3 MthClose1 Day1 Wk1 Mth3 Mth
LME BASE METALS
(USD/t)
LME BASE METALS
(kt)
Aluminium 1848 0.0 0.8(1.9) (10.9) (0.1) (0.8)(0.1) (4.8) (12.1) (0.7) (2.3)(0.2) (1.3) (6.2) (18.8) (0.1)(0.8) (2.6) (14.5) (0.3) (1.5) (7.8) (12.2)(0.7) (2.8) (18.0) (0.4) (1.6) (3.6) (13.4)(1.4) (0.9) (12.1) (19.1) (1.0) (3.7)Aluminium 5,160 0.0 0.0Copper 7239 3.1 Copper 605 2.9 57.0Nickel 15125 Nickel 178 0.7 6.8 18.1Zinc 1838 0.2 Zinc 1,053Lead 2008 0.0 Lead 251Tin 20150 Tin 14 0.6 4.5
PRECIOUS METALS
(USD/oz)
Close1 Day1 Wk1 Mth3 Mth
Gold 1,453Gold (A$/oz) 1,427 0.2 S&P 500 1,626 0.5 1.8 3.7 7.6Silver 24 VIX Volatility Index 13 1.3Platinum 1,483 CRB Index 289 0.3Palladium 683 LME Metals Index 3,128 1.7
ENERGY
(1.1) (1.6) (8.4) (13.2)(0.5) (5.6) (11.2)(0.2) (1.5) (14.4) (24.7) (5.1) (0.1) (6.5)(1.5) (1.6) (4.2) (13.3) (0.4) (0.7) (5.0)(1.9) (2.3) (5.9) (10.9) (0.2) (4.5) (13.2)
(USD/bbl)
Close1 Day1 Wk1 Mth3 Mth
WTI Oil* 95.62 2.3 1.5Brent Oil* 104.40 2.0 Baltic Freight Rate 889 1.3 3.0 3.9 20.3Sing Gasoil 0.5% 117 0.7 1.2 Baltic Capesize 1,393 3.6 9.4 12.7Sing Fuel Oil
180cst
 
(US$/t)
632 0.4 1.7 1.3 Baltic Panamax 999 53.5
OTHER 
(0.6) (1.1)(1.0) (1.7) (10.4)(2.3) (11.7) (5.0)(3.3) (0.7) (2.8) (7.2)
(USD/t)
Baltic Handysize 546 0.0 0.4 5.4 24.7China HR Coil (RmB/t) 3,685
Close1 Day1 Wk1 Mth3 Mth
Richards Bay Coal 82 1.7Newcastle Coal* 87.4 0.5 1.2 DXY - USD Index 82.3 0.6 3.5Australia Coking Coal** 147 AUD/USD - Aussie 1.018Iron Ore Spot 130.0 1.5 NZD/USD - Kiwi 0.845
CommoditiesInventories% Change% Change% ChangeCurrencies% ChangeKey Indices% ChangeFreight
(0.1) (0.8) (4.8) (11.3)(0.1) (1.1) (5.1)(1.0) (9.1) (0.1) (0.1)(0.6) (7.3) (13.0) (0.6) (1.8) (2.9) (2.2)(3.1) (6.5) (15.7) (0.7) (1.5) (0.8) (0.0)
 
80859095100May J ul Sep Nov J an Mar
NEWCASTLE COAL
USD/t1,3001,4001,5001,6001,7001,800May J ul Sep Nov J an Mar May
GOLD
USD/oz7580859095100May J ul Sep Nov J an Mar May
WTI OIL
USD/bbl0.970.991.011.031.051.07May J ul Sep Nov J an Mar May
AUD
USD14,00015,00016,00017,00018,00019,000May J ul Sep Nov J an Mar
NICKEL
USD/t6,5007,0007,5008,0008,500May J ul Sep Nov J an Mar
COPPER 
USD/t1,7001,8001,9002,0002,1002,200May J ul Sep Nov J an Mar
ALUMINIUM
USD/t1,7001,8001,9002,0002,1002,200May J ul Sep Nov J an Mar
ZINC
USD/t85105125145165May J ul Sep Nov J an Mar
IRON ORE
USD/t
 
Notes: *Front-month futures **Weekly pricesSources: Bloomberg, McCloskey, ANZ Commodity Strategy
 
Contacts: Mark Pervan / 8 May 2013 / 3 of 5
ANZ PRICE FORECASTS
ANZ FORECAST TABLE
COMMODITY
Unit Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 2013F 2014F 2015F 2016F LTBASE METALS
Aluminium USD/lb 0.85 0.95 0.93 0.85 0.87 0.90 0.92 0.92 0.99 1.02 1.04 1.0Copper USD/lb 3.49 3.72 3.59 3.41 3.30 3.45 3.60 3.60 3.70 2.97 2.85 2.80Nickel USD/lb 7.57 8.36 7.71 7.53 7.25 7.50 7.80 7.80 8.80 8.50 8.20 8.00Zinc USD/lb 0.85 0.94 0.93 0.85 0.88 0.90 0.93 0.93 1.06 1.09 1.04 1.02Lead USD/lb 0.84 1.03 1.05 0.95 0.92 0.95 0.97 0.97 1.07 1.07 1.02 1.00Tin USD/lb 8.52 9.94 10.61 10.52 9.50 9.90 10.10 10.10 10.20 9.10 8.40 8.00Aluminium USD/t 1,880 2,080 2,040 1,880 1,920 1,980 2,030 2,030 2,180 2,250 2,290 2,310Copper USD/t 7,690 8,210 7,910 7,510 7,270 7,610 7,940 7,940 8,160 6,550 6,280 6,170Nickel USD/t 16,690 18,430 17,000 16,590 15,980 16,530 17,200 17,200 19,400 18,740 18,080 17,640Zinc USD/t 1,880 2,060 2,050 1,860 1,940 1,980 2,050 2,050 2,340 2,400 2,290 2,250Lead USD/t 1,850 2,270 2,320 2,090 2,030 2,090 2,140 2,140 2,360 2,360 2,250 2,200Tin USD/t 18,780 21,910 23,380 23,190 20,940 21,820 22,270 22,270 22,490 20,060 18,520 17,640
PRECIOUS METALS
Gold USD/oz 1,597 1,772 1,675 1,599 1,520 1,550 1,580 1,580 1,700 1,680 1,600 1,460Platinum USD/oz 1,447 1,662 1,539 1,572 1,510 1,560 1,620 1,620 1,730 1,690 1,630 1,480Palladium USD/oz 583 639 705 772 710 740 780 780 835 810 765 700Silver USD/oz 27.5 34.5 30.3 28.5 25.3 26.0 27.2 27.2 31.0 30.6 29.1 27.0
ENERGY
WTI NYMEX USD/bbl 85 92 92 98 95 97 100 100 102 94 92 90Dated Brent USD/bbl 97 113 112 109 104 106 109 109 112 102 98 95Uranium USD/lb 51 47 45 42 42 43 45 45 50 62 65 7
BULKS
Iron ore Spot (CIF China, fines) USD/t 134 104 145 137 130 124 127 127 125 118 115 100Iron ore Contract (FOB Aust, fines) USD/t 128 118 104 138 128 121 116 116 117 110 105 90Coking coal - Premium hard USD/t 210 225 170 165 172 155 170 170 190 185 180 175Coking coal - Hard USD/t 205 174 160 155 157 140 155 155 170 165 160 155Coking coal - Semi-soft USD/t 147 147 117 117 122 105 120 120 147 142 137 132Newc Thermal Coal (Spot) USD/t 87 85 90 88 88 91 95 95 104 110 110 10Newc Thermal Coal (JPY Contract) USD/t 115 115 115 115 95 95 95 95 98 108 110 100
OTHER METALS
Alumina USD/t 234 261 255 234 240 248 253 253 273 281 284 289Molybdenum USD/lb 12.9 11.4 11.7 10.8 11.3 11.8 12.2 12.2 14.0 14.5 14.8 15.0Cobalt USD/lb 13.6 14.0 11.5 12.0 13.0 13.5 14.0 14.0 15.2 15.6 15.8 15.0
AGRICULTURE
Corn US¢/bu 617 776 739 711 631 555 516 678 600 590 590 590Wheat US¢/bu 641 883 853 742 707 632 599 746 710 641 641 641Soybeans US¢/bu 1,452 1,638 1,482 1,437 1,344 1,300 1,200 1,348 1,070 1,070 1,021 1,021Cotton US¢/lb 90 84 82 90 91 78 82 83 95 125 95 95Sugar US¢/lb 21 21 20 18 18 17 19 18 18 20 20 2Palm Oil MYR/t 3,200 2,951 2,460 2,473 2,700 2,700 2,750 2,656 2,750 2,750 2,750 2,7505000
 
Note 1: Base/precious metals, energy and bulk forecasts are end of period prices; Agriculture forecasts are average pricesNote 2: Historical data are actualsSources: Bloomberg, ANZ Commodity Strategy

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