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ANZ Commodity Daily 610 260412

ANZ Commodity Daily 610 260412

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ANZ RESEARCH
COMMODITY DAILY
 
Contacts: Mark Pervan +613 9273 3716 | mark.pervan@anz.comNatalie Robertson +613 9273 3415 | natalie.robertson@anz.com
MARKET HIGHLIGHTS OVERNIGHT WRAP
 
Oil prices recovered on US Fed comments & equity rally
 
Gold closed flat after Fed comments & weaker US dollar
 
Base metals up on signs of China demand improving
 
Newc coal fell below US$100/t, prompting buying
OVERNIGHT RANKED PRICE MOVES (%)
 
(0.9)(0.6)(0.4)(0.2)0.10.30.30.60.60.91.11.21.41.9(1.5) (1.0) (0.5) 0.0 0.5 1.0 1.5 2.0 2.5Coal (NEWC)AluminiumSilverUSD (DXY)GoldZincWTI OilCopperPlatinumLeadNickelTinS&P 500Baltic Freight
 
WEEK-TO-DATE RANKED PRICE MOVES (%)
 
(2.9)(1.4)(1.0)(0.6)(0.3)0.10.40.50.71.42.02.54.513.0(5.0) 0.0 5.0 10.0 15.0SilverPlatinumCoal (NEWC)USD (DXY)NickelGoldS&P 500AluminiumZincWTI OilCopperLeadTinBaltic Freight
 
Note: Coal (NEWC) refers to front month futuresSources: Bloomberg, ANZ Commodity Strategy
 
Overnight Themes – 
Commodities ended in positive territoryafter a choppy trading session, tracking buoyant equitymarkets. The US FOMC statement and Bernanke speech was apositive highlight. Meanwhile better than expected corporateearnings from Apple and Boeing offset the more disappointingMarch durable goods report registering its weakest result inthree-years. The FOMC statement was similar to last month’s,and Bernanke’s comments reconfirmed the US Fed would beprepared to take further action if warranted. The Fedmaintained the view that the economy has been growingmoderately and will continue to do so going forward. Thestatement acknowledged that there had been "some signs of improvement" in housing and that "inflation has picked upsomewhat". Although, there remains considerable slack withinthe economy and the FOMC confirmed its commitment to leavethe fed funds rate at near-zero until at least late 2014.
 
Crude benchmarks recovered in late trading
, supported byrallying equity markets and the weaker US dollar. Oil pricesbroke down following disappointing US durable goods ordersand reports of Iran considering the end of their nuclearprogram in the hopes of avoiding further economic sanctions.Meanwhile, US inventory data was not flash, with crude oilstocks showing a larger than expected increase of almost4.0mbbls (market: +2.8mbbls), far outweighing the mild48kbbls/day rise in imports to 8.8mbbls/day and slightly higherrefinery operating rates to 84.7%. The US FOMC commentsreiterating their commitment to keep interest rates low untillate 2014 helped the late recovery, as did positive equitymarkets.
 
Gold closed flat around US$1,644/oz
, in a wide US$22/oztrading range. Gold prices plunged after the Fed statement wasreleased and acknowledged signs of improvement, butBernanke was vocal about the Fed remaining “entirely preparedto take additional balance sheet actions if necessary” to boostthe economy. Overall, our economists view the statement asslightly more dovish than the market was expecting, potentiallyboosting expectations of additional stimulus.
 
 
Base metals rose, with the exception of aluminium
. Thekey copper market sustained gains to almost a 2-week highafter the US Fed comments. Additional support also came fromSHFE copper futures sliding into a backwardation for the firsttime since January implying improving demand. Copperparticipants are also looking at a tight supply situation that hasdeveloped in the LME, pushing up premiums for cash metalover 3-month futures to the highest level in 3½ years.
 
 
Newcastle coal front month futures fell 0.9%
, withphysical prompt Newcastle and South Africa coal prices dippingbelow the US$100/t level. Prices near to or below the US$100/tlevel could encourage a pick-up in demand for the cheaplypriced coals from Asia. Coal shipments from Australia’sNewcastle port looks to be rising despite recent bad weather,with a 7% rise in exports in the week ending 23 April to a nearrecord of 2.91mt.
April 26, 2012
 
 
COMMODITY DATA
Close1 Day1 Wk1 Mth3 MthClose1 Day1 Wk1 Mth3 Mth
LME BASE METALS
(US$/t)
LME BASE METALS
(kt)
Aluminium 2,029(0.6)0.5(4.6) (8.9)Aluminium 5,056 0.2(0.3) (0.3)1.2 Copper 8,304 0.6 2.0(0.8) (1.4)Copper 256(0.2) (1.8)0.1(22.1) Nickel 17,521 1.1(0.3)0.1(16.1)Nickel 101 1.0 1.2 0.9 5.5 Zinc 1,992 0.3 0.7 0.1(5.7)Zinc 911(0.0) (0.2)1.3 8.1 Lead 2,080 0.9 2.5 4.7(5.7)Lead 367(0.2) (1.3) (2.7)0.1 Tin 21,856 1.2 4.5(2.3) (9.3)Tin 14 0.0 3.0 7.1 51.2
PRECIOUS METALS
(US$/oz)
Close1 Day1 Wk1 Mth3 Mth
Gold 1,644 0.1 0.1(1.2) (5.7)Gold (A$/oz) 1,591(0.4)0.4(0.9) (2.2)S&P 500 1,391 1.4 0.4(1.1)5.0 Silver 30.7(0.4) (2.9) (4.2) (8.9)VIX Volatility Index 17(7.1) (9.8)8.7(9.3) Platinum 1,555 0.6(1.4) (5.0) (3.9)CRB Index 302 0.3 1.0(3.0) (3.0) Palladium 663(1.0)0.8 2.3(4.9)LME Metals Index 3,503 0.5 1.6(1.6) (5.5)
ENERGY
(US$/bbl)
Close1 Day1 Wk1 Mth3 Mth
WTI Oil* 104 0.3 1.4(1.2)6.7Brent Oil* 119 0.6 0.9(4.1)6.7 Baltic Freight Rate 1,137 1.9 13.0 23.3 71.8Sing Gasoil 0.5% 132 0.0 0.6(3.4)2.7 Baltic Capesize 1,514(0.5) (1.3)11.2 4.7 Sing Fuel Oil
180cst
 
(US$/t)
725 0.0 0.5(3.4)0.5 Baltic Panamax 1,692 3.9 31.1 62.7 143.8
OTHER
(US$/t)
Baltic Handysize 577 1.1 4.9 1.9 45.7China HR Coil (RmB/t) 4,346(0.3) (0.9) (0.6)2.4
Close1 Day1 Wk1 Mth3 Mth
Richards Bay Coal API4 99(0.6) (0.8) (4.7) (5.3)Newcastle Coal*** 103(0.9) (1.0) (6.1) (12.5)DXY - USD Index 79.0(0.2) (0.6) (0.1)0.2 Australia Coking Coal** 212 0.7 1.7(3.4)AUD/USD - Aussie 1.033 0.5(0.3) (0.3) (3.6) Iron Ore Spot 147 0.0(1.2) (0.7)2.7 NZD/USD - Kiwi 0.812 0.3(0.5) (0.4) (2.6)
CommoditiesInventories% Change% Change% ChangeCurrencies% ChangeKey Indices% ChangeFreight
 
105110115120125Apr Jun Aug Oct Dec Feb
NEWCASTLE COAL
US$/t1,4001,5001,6001,7001,8001,900Apr Jun Aug Oct Dec Feb
GOLD
US$/oz708090100110120Apr Jun Aug Oct Dec Feb
WTI OIL
US$/bbl0.940.971.001.031.061.091.12Apr Jun Aug Oct Dec Feb
AUD
A$16,00018,00020,00022,00024,00026,00028,000Apr Jun Aug Oct Dec Feb
NICKEL
US$/t6,5007,0007,5008,0008,5009,0009,50010,000Apr Jun Aug Oct Dec Feb
COPPER
US$/t1,9002,1002,3002,5002,7002,900Apr Jun Aug Oct Dec Feb
ALUMINIUM
US$/t1,6001,8002,0002,2002,4002,600Apr Jun Aug Oct Dec Feb
ZINC
US$/tUS$/t25.030.035.040.045.050.0Apr Jun Aug Oct Dec Feb
SILVER
US$/oz
 
Notes: * Front-month futures ** Weekly prices ***Newcastle ICE coal futures contractSources: Bloomberg, McCloskey, ANZ Commodity Strategy
 
 
ANZ FORECASTS
ANZ Forecast Table
1
 
COMMODITY
UnitJun-11Sep-11Dec-11Mar-12Jun-12Sep-12Dec-12Mar-13Jun-13Sep-13Dec-13BASE METALS
Aluminium US$/lb 1.18 1.09 0.95 0.99 0.97 1.02 1.05 1.06 1.05 1.05 1.06Copper US$/lb 4.16 4.07 3.41 3.77 3.87 3.98 4.08 4.08 4.13 4.15 3.95Nickel US$/lb 11.05 9.98 8.34 8.90 8.23 8.75 9.45 10.00 10.40 10.45 10.15Zinc US$/lb 1.02 1.01 0.86 0.92 0.91 0.92 0.95 0.98 1.01 1.03 1.04Lead US$/lb 1.16 1.11 0.90 0.95 0.93 0.96 0.99 1.02 1.05 1.06 1.07Tin US$/lb 13.08 11.16 9.45 10.38 10.16 10.10 10.35 10.55 10.80 10.95 10.80
PRECIOUS METALS
Gold US$/oz 1,508 1,706 1,683 1,691 1,704 1,760 1,800 1,840 1,855 1,825 1,770Platinum US$/oz 1,785 1,771 1,531 1,609 1,665 1,698 1,713 1,765 1,795 1,765 1,725Palladium US$/oz 760 752 630 683 677 725 775 820 850 850 838Silver US$/oz 38.5 38.9 31.8 32.7 33.4 35.0 36.2 37.4 37.5 36.9 36.3
ENERGY
WTI NYMEX US$/bbl 102.5 89.5 94.1 102.9 105.5 108.5 111.0 114.5 116.5 116.0 114.5Dated Brent US$/bbl 117.0 112.9 109.3 118.5 123.9 123.0 123.0 124.5 125.0 123.5 121.0Uranium US$/lb 56.4 51.8 52.6 51.9 54.5 60.5 65.0 68.5 71.5 74.0 76.0
BULKS
Thermal coal
2
US$/t 130.0 130.0 130.0 130.0 115.0 115.0 115.0 115.0 125.0 125.0 125.0Premium hard coking US$/t 330.0 315.0 285.0 235.0 206.0 215.0 220.0 220.0 225.0 225.0 220.0Hard coking US$/t 300.0 290.0 265.0 225.0 196.0 195.0 200.0 200.0 200.0 200.0 195.0Semi-soft coking coal US$/t 275.0 230.0 208.0 171.0 151.0 170.0 175.0 175.0 175.0 175.0 170.0Iron ore lump US$/t 206.1 202.0 177.6 168.0 175.2 180.0 183.9 183.9 181.5 176.7 173.2Iron ore fines US$/t 171.8 168.3 148.0 140.0 146.0 150.0 152.0 152.0 150.0 146.0 142.0
OTHER METALS
Alumina US$/t 326 300 262 272 268 280 288 291 288 288 291Molybdenum US$/lb 16.7 14.6 13.4 14.3 14.8 15.8 16.3 16.5 16.8 16.9 16.7Cobalt US$/lb 18.3 17.1 15.1 15.2 15.1 16.2 16.8 17.0 17.5 18.0 18.0
EXCHANGE RATES
AUD/USD US$ 1.08 1.05 1.04 1.06 1.05 1.09 1.10 1.10 1.10 1.10 1.10NZD/USD US$ 0.82 0.83 0.79 0.83 0.84 0.86 0.88 0.90 0.90 0.90 0.90EUR/USD US$ 1.46 1.41 1.35 1.33 1.35 1.36 1.37 1.37 1.37 1.36 1.34USD/JPY ¥ 81.03 76.78 77.48 80.06 78.96 75.67 73.00 70.67 70.00 70.00 70.00USD/CAD C$ 0.96 0.99 1.01 1.00 0.99 1.00 1.02 1.04 1.06 1.08 1.10USD/CNY Yuan 6.46 6.38 6.36 6.29 6.27 6.23 6.14 6.10 6.08 #/NA #/NA
 Note 1: Average prices Note 2: Thermal coal prices are for JPY year starting April 1 Note 3: Historical data are actualsSources: Bloomberg, ANZ Commodity Strategy, ANZ FX Strategy
 

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