SEB Commodities Monthly

2012 – shaky start, stronger ending

13 DECEMBER 2011

Commodities Monthly

2012 – shaky start, stronger ending
GENERAL

0-3 M

4-6 M

7-12 M

UBS Bloomberg CMCI Sector Indices
(price indices, weekly closing, January 2010 = 100)
1 80 1 70 1 60 1 50 1 40 1 30 1 20 1 10 1 00 90 jan-10 fe 0 b-1 m ar-10 a pr-10 m aj-10 jun-10 jul-10 a ug-10 sep-10 o kt-10 no 0 v-1 d ec-10 jan-11 fe 1 b-1 m ar-11 a pr-11 m aj-11 jun-11 jul-11 a ug-11 sep-11 o kt-11 no 1 v-1 d ec-11
YT (% D ) M (% /M ) C m ditie om o s

OECD Composite Leading Indicators for December project continued above trend growth in the US, Japan and Russia with China and Canada slowing gradually towards trend. Indicators for Europe, India and Brazil more strongly suggest below trend growth. Absent Euro-zone disruption or a Chinese hard landing we see little further downside in energy and metals prices due to marginal production costs and supply optimization in producer countries. Speculative positions have already adjusted downward while the USD index currently stands almost 9% above its 2011 low. Consequently, a reversal in either sentiment or fundamentals could quickly send commodity prices higher.

In strial M du etals Precio M tals us e Ene rgy Agricu re ltu

80

ENERGY
• • • •

0-3 M

4-6 M

7-12 M

Despite macroeconomic headwinds we expect crude oil prices to remain strong in 2012 with a Brent average of $114/b. Supply side risk remains high due to geopolitical issues in the Middle East and Africa. OPEC producers have strong incentives to support crude oil prices above $100/b even during periods of severe macroeconomic stress. High temperatures, low petrochemical activity and seasonally weak demand for fuels are restricting activity (and prices) in European oil product markets.

Sector performance last month
(MSCI World, UBS Bloomberg CMCI price indices)
16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 -18 -20

INDUSTRIAL METALS
• • •

0-3 M

4-6 M

7-12 M

In all scenarios other than those involving a Euro-zone breakup or Chinese hard landing we see little downside risk in industrial metals prices in 2012. However, substantial industrial destocking implies a potentially rapid recovery in prices if global growth expectations stabilize. While adverse developments affecting the Chinese real estate and banking sectors are of concern, authorities have sufficient resources to stimulate the economy if necessary.

PRECIOUS METALS
• • •

0-3 M

4-6 M

7-12 M

Winners & Losers last month
(%)
10 5 0 -5 -10 -15 -20 C coa (U ) o S C 2 (EU ) O A P er (N ow ordic) W at he C orn N t. gas (U ) a S Po e (C t.) w r on Tin Platinum S r uga C otton Silver H t. oil (U ) ea S S oybeans G old Bren t A inium lum C offe (A r.) G asoline (U ) S C oppe r S teel b illets N ickel Zinc W TI P alladium Lead -25

We expect gold to perform strongly in H1-12 as policymakers loosen monetary policy further to boost growth. In H2-12 more positive growth expectations could start to drive gold prices lower again. We forecast an average gold price of $2050/t in 2012 and expect it to peak during the first half of the year.

AGRICULTURE
• • •

0-3 M

4-6 M

7-12 M

We expect grain prices to trend lower in 2012 as sector conditions gradually normalize. Upward revisions of production and inventory estimates combined with ongoing macroeconomic concerns have broken the back of the agricultural market. Current la Niña developments remain weak and are expected to peak during December and January. We see little likelihood they will cause major disturbances.

Chart Sources: Bloomberg, SEB Commodity Research

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

Agricu re ltu

Ind ustria l m ls eta

Eq uitie s

En y erg

Pre ciou s m ls eta

2

Commodities Monthly

General
Over the next 12 months we expect oil, copper, nickel and gold prices to move higher while agriculture is likely to soften further. There are of course clear risks of a double dip recession in the US, a hard landing in China and the disintegration of the Euro-zone, though we regard them as less likely. China will still probably enjoy a soft landing and is currently ready to embark on a period of monetary easing as inflationary pressure looks set to ease. The US economy has consistently proved stronger than expected this autumn and should continue its gradual recovery. The Euro-zone debt crisis is likely to be halted in the short term by liquidity provisions while a credible, longer term solvency solution will probably emerge during 2012 as politicians hammer out necessary treaty changes. The Euro-zone debt crisis was the main driver for global financial markets over the past month, and will remain so for some time as both Angela Merkel and Mario Draghi (ECB) firmly stated during the latest EU summit there will be no “big bang” solution or “bond buying bazooka” as a quick Euro-zone fix. Instead, what is needed is a credible, fiscal stability pact, one that will probably require a treaty change. The ECB will however continue to provide immediate support to Euro-zone banks to ensure continued liquidity flows and credit availability. The European economy will struggle to grow in 2012 as banks de-leverage further and governments implement additional austerity measures. European manufacturers are naturally acting very defensively, running lean inventories. Physical commodity demand in the region is reportedly very weak due to de-stocking, even absent a comparable decrease in end consumption. Emerging market concerns have increased during the past six months with the Brazilian Real and Indian Rupee depreciating almost 20% vs. the USD. Even the Chinese Yuan has started to weaken as growth and exports slow. In China property prices are declining with some fearing they could fall by up to 30% in 2012. Chinese equities have slumped to levels last seen in 2009. However, with inflationary pressure easing the Chinese government is now in a position to initiate measures to stimulate the economy. We believe it has both the means and the determination to prevent a hard landing for its economy in 2012. China will certainly experience slower growth over the next five years than over the same period historically. Consequently, we forecast a slowdown in previous breakneck percentage increases in commodity consumption growth. However, with the Chinese economy now much larger year-on-year commodity consumption growth by volume will still be substantial.

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

OECD composite leading indicators
(monthly, 100 corresponds to long term trend growth in industrial production)
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 9 0 8 9 8 8 20 05 20 06

C in h a Eu zo e ro n O D EC U SA R fe n e re ce

20 07

20 08

20 09

21 00

Chart Sources: Bloomberg, SEB Commodity Research

21 01

3

Commodities Monthly

Crude oil
We expect crude oil prices to remain high in 2012 with an average Brent price of $114/b although prices during the first half will be limited by a European recession, lacklustre US growth and the persistent effects of Chinese monetary tightening. Still, in our main scenario we anticipate eventual monetary easing in Europe, China and possibly also the US to reflate the global economy and boost crude oil demand during the second half. Even during the first six months, we think it unlikely prices will fall below $100/b other than briefly during periods of macroeconomic stress as OPEC producers have strong initiatives to maintain high prices. In addition, the medium- to long term supply and demand outlook is likely to ensure a continued high crude oil price as outlined in SEB’s Oil Market Report (November 30). If the macroeconomic picture were to turn bullish faster than expected these factors could quickly drive oil prices above $120/b again. The crude oil market is currently supported by several supply side risks and issues, the most important of which is Iran. With further US and European sanctions likely the situation could deteriorate rapidly, both because it could be tempted to retaliate and because internal tension is increasing as socio-economic conditions deteriorate. Supply is also depressed by the present embargo on Syrian oil, the lower loading rate in Sudan due to conflict in the recently partitioned country and continued unrest in Nigeria. However, mild weather in the northern hemisphere is restricting demand for heating oils, while jet fuel and gasoline requirements are seasonally low. Further, weak petrochemical demand is weighing on the naphtha price. Consequently, overall product requirements are relatively low. Given current moderate inventories the middle distillate situation could change rapidly when cold weather finally strikes. An important issue next year will be how to handle the risk of extreme price volatility. While our base scenario indicates a gradual recovery in crude oil prices over the year there is a substantial risk of more extreme situations arising. A Euro-zone collapse, caused by a lack of political resolve, could also drive the US into recession and China to a hard landing, sending oil prices sharply lower, possibly below $70/b, despite OPEC interventions and the positive long term market balance outlook. At the other extreme a huge geopolitical risk affects the MENA region due to the “Arab spring” in general and the Iranian nuclear issue in particular, that could potentially send prices above $200/b. US troops leaving Iraq at the end of this year is an additional potentially destabilizing factor. Therefore, both consumers and producers should consider buying insurance against tail risk in 2012.

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
o n

N M WI Y EX T IC Bre t E n

US crude oil inventories
(DOE, mb, weekly data)
38 0 37 0 36 0 35 0 34 0 33 0 32 0 31 0 j f m a m j j a s d

200 010 av 6-2 g. 201 0 201 1

Chart Sources: Bloomberg, SEB Commodity Research

Current global crude oil demand estimates
2011 (mb/d) 89.0 88.13 87.81 Revision (kb/d) -160 -100 +/-0 2012 (mb/d) 90.3 89.52 89.01 Revision (kb/d) -200 -100 +/-0

IEA EIA OPEC

SEB average Brent crude oil price forecast
($/b) 2011 2012 2013 Q1 110 Q2 110 Q3 115 Q4 120 Full Year 110 114 120

21 01

4

Commodities Monthly

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

Brent futures curve
(ICE, $/b)
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 9 0 o 2 kt-1 o 3 kt-1 o 4 kt-1 a r-1 p 2 a r-1 p 3 a r-1 p 4 ja -1 n 2 ja -1 n 3 ja -1 n 4 ju 2 l-1 ju 3 l-1 ju 4 l-1 1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

o 5 kt-1 d

a r-1 p 5

ja -1 n 5

o 5 kt-1

a r-1 p 5

ja -1 n 5

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 N EXG so e YM a lin N EXH a g o YM e tin il

ja -1 n 6

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 G so e 2 0 -2 1 a g a lin 0 6 0 0 v . G so e 2 1 a lin 0 1 D istilla fu l o 2 0 -2 1 a g te e il 0 6 0 0 v . D istilla fu l o 2 1 te e il 0 1

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

US natural gas futures curve
(NYMEX, $/MMBtu)
5 0 ,5 1 -1 -0 1 0 7 5 5 ,2 5 0 ,0 4 5 ,7 4 0 ,5 4 5 ,2 4 0 ,0 3 5 ,7 3 0 ,5 3 5 ,2 a r-1 p 2 a r-1 p 3 a r-1 p 4 d c-1 e 1 ag 2 u -1 d c-1 e 2 ag 3 u -1 d c-1 e 3 ag 4 u -1 d c-1 e 4 a r-1 p 5 ag 5 u -1 d c-1 e 5 1 -1 -0 1 1 9 1 -1 -0 1 2 9

Chart Sources: Bloomberg, SEB Commodity Research

5

ja -1 n 6

ju 5 l-1

ju 5 l-1

Commodities Monthly

Nordic power
Nordic power price
November and the beginning of December continued to be characterised by very weak weather fundamentals. Heavy rain and abnormally mild temperatures exerted pressure on the market. Hydro reservoirs remained unusually high while snow cover was below seasonal norms. Overall, the hydro balance maintained a surplus of 10 TWh. Currently, approximately 85% of installed Swedish reactor capacity is running, with two facilities off grid due to technical problems but expected back in coming weeks. Generally bearish sentiment with lower fossil fuelled power production costs and a weak macroeconomic outlook have sharply depressed both spot and forward prices. Especially the CO2 market has seen a dramatic fall on the back of lower economic activity outlook and uncertainties surrounding emission trading going forward. While price differences between the four new Swedish price areas (Luleå, Sundsvall, Stockholm and Malmö) have generally been limited, we still expect major differences when temperatures fall, or in the event of grid or nuclear availability related problems. Since our last report, Q1-12 has traded much lower, at currently EUR 40/MWh. Similarly, Cal-12 has broken below EUR 40/MWh, a post spring 2010 low. Price areas Malmö and Stockholm still trade at substantial premiums for Q1-12 of EUR 10/MWh and EUR 5/MWh, respectively. We regard the forward curve as fairly priced but see further downside risks if the hydro balance strengthens further. Short term price spikes are still possible especially in southern parts of Sweden if temperatures fall below normal.
(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 01 21 01

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 00

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

Chart Sources: Bloomberg, SEB Commodity Research

6

Commodities Monthly

Industrial metals
We see little further downside for metals prices other than for very short periods during market selloffs. While Euro-zone disruption or a Chinese hard landing would of course send prices lower, we regard those contingencies as unlikely. Except for copper, most metals trade well into their cost curves with costs gradually inching higher over time. Copper prices remain high as stocks have fallen by around 20% since September, mining supply is stagnant and everyone is taking steps to secure supply for 2012. We expect metals to trade sideways during the first half of next year due to a weak European economy and slower Chinese growth. Prices could however recover rapidly as industry has defensively de-stocked, market trading positions have decreased, the USD has already appreciated substantially and marginal costs justify higher prices. We expect metals prices to increase towards the end of 2012 as the Euro-zone situation stabilizes and Chinese monetary easing gains traction. Since our last report industrial metals prices were initially depressed by rising Euro-zone bond yields but quickly recovered to become the best performing commodity sector, ending slightly higher. Such an achievement was particularly impressive given present lacklustre physical demand in Europe as companies defensively de-stock, and the continued deterioration in Chinese growth, sending local equities to post-2009 lows. Property prices in China are falling and land auctions declining. Local Chinese governments normally raise up to 40% of their revenues from land auctions. Fewer land sales will therefore generate much less cash for local governments for infrastructure projects. Consequently, both infrastructure and housing investments are likely to decline in early 2012. Concerns are increasing that the $2.8trn lending boom unleashed in China during 200910 has resulted in a substantial misallocation of capital especially in the real estate market and that declining property and land values will increase bad debts within the banking sector. Still, Chinese central government debt is only 27% of GDP, enabling authorities to take timely, appropriate action as and when bad debt problems require. Following prolonged tightening, the Chinese government has begun easing monetary conditions. Several local governments have been allowed to issue bonds for the first time since 1994 to secure funding to replace decreasing land auction receipts. The Bank of China has increased loan approvals as deposits are rising relative to its loan portfolio, while bank reserve requirement ratios were recently lowered for the first time since 2008.

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 Tin 21 01

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 Cpe opr N icke l Alu in m m iu Z c in La ed T in

LME price and inventory changes last month
1 0 8 6 4 2 0 -2 -4 -6 -8 -1 0 -1 2 -1 4 -1 6 -1 8 -2 0

Alu in m m iu

Cpe opr

N icke l

La ed

Zin c

Chart Sources: Bloomberg, SEB Commodity Research

7

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 Price (% ) In e to s (% v n rie )

Commodities Monthly

Industrial metals
Aluminium
• We expect the aluminium market to remain in surplus in 2012 though production cutbacks caused by high cost Chinese marginal producers ($2100-2300/t) going bankrupt are supportive. While LME inventories have rebounded to record highs, SHFE inventories are now very low. Given the prevalence of expensive, low quality domestic aluminium smelting, high cost domestic bauxite reserves and power shortages in China, aluminium imports are likely to increase in coming years. We forecast an average 2012 LME aluminium price of $2275/t. Prices are unlikely to fall significantly below $2000/b without a significant deterioration in the Chinese economy and/or a Euro-zone collapse.

LME aluminium price and inventories
(weekly data)
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 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
• • • • Over the first eight months of this year, the copper market deficit totalled 161 kt (vs. production of 12926 kt) according to the ICSG. Lack of support from production costs (mostly between $4000-4500/t) still leaves copper sensitive to market sentiment. The recent downtrend in LME and SHFE inventories and healthy Chinese imports show Chinese restocking has been triggered by lower prices. Given zero production growth expectations and the likelihood of another significant market deficit in 2012 copper prices should be well supported with substantial upside risk if growth expectations stabilize. We forecast an average 2012 LME copper price of $8625/t.

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 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis) 100 10 100 00 90 00 80 00 70 00 60 00 50 00 40 00 30 00 20 00 10 00

Nickel
• • With both nickel and iron prices relatively low and power costs high, Chinese nickel pig iron (NPI) producers are struggling. Due to support from marginal production costs, lower inventories and decreasing prices so far this year, we see little further downside risk in the nickel market, absent a serious global economic setback. Like the copper market, we expect Chinese buyers to seize the opportunity to increase nickel buying at lower prices. Still, despite significant uncertainties regarding NPI production and projects utilizing HPAL technology, a potentially growing market surplus in 2012 is likely, at least partly, to limit nickel upside. We forecast an average 2012 LME nickel price of $21250/t.

inventories LME nickel price and in ventories
(weekly data)
100 800 100 600 100 400 100 200 100 000 800 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 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis) 600 00 500 50 500 00 400 50 400 00 300 50 300 00 200 50 200 00 100 50 100 00 50 00 0

• •

Chart Sources: Bloomberg, SEB Commodity Research

8

Commodities Monthly

Industrial metals
Zinc Zin c
• Over the first three quarters of 2011 the zinc market surplus was 275 kt (vs. production 9720 kt) according to the ILZSG, confirming that supply continues to significantly exceed demand. However, with production costs for most producers in the region just below $2000/t prices should remain well supported provided the growth outlook holds ground. Positively, we observe a six month inventory downtrend following four years of rising inventories, likely a sign of restocking rather than strong consumption. Over the same period SHFE inventories have also decreased. Although the zinc market remains in surplus there is good reason to expect it to tighten in 2012 and return to near equilibrium in late 2013. We forecast an average 2012 LME zinc price of $2225/t.

LME zinc price and inventories
(weekly data)
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 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 40 00 30 50 30 00 20 50 20 00 10 50 10 00 50 0

• •

• •

Ferrous metals
• • • • • Iron ore prices have remained volatile since beginning to fall sharply in September and currently trade at just under $140/t. At present, macroeconomic concerns are being offset by Chinese monetary easing and supply risks due to wet weather forecast for Australia. We expect iron ore (62% Fe) prices to be well supported at $120/t with a 2012 average price forecast of $140/t vs. YTD average of $169/t and 2010 average of $147/t. In Europe, Japan and Turkey steel producers have announced further melting cutbacks while Chinese mills are coming back online after maintenance. At the beginning of this month, LME billets reversed a three month bearish trend to presently trade at $550/t. The downward trend in the SBB World HRC index continues while US and European HRCs have enjoyed recent support.

LME steel billet price and inventories
(weekly data)
900 00 800 00 700 00 600 00 500 00 400 00 300 00 200 00 100 00 0 ju 8 l-0 ju 9 l-0 ju 0 l-1 o 8 kt-0 o 9 kt-0 o 0 kt-1 ju 1 l-1 o 1 kt-1 300 60 300 30 300 00 30 300 00 00 20 200 50 50 20 200 00 00 10 100 50 50 10 100 00 00 50 0 0 50 00 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 200 70 200 40 200 10 100 80 100 50 100 20 90 00 60 00 30 00 ja -0 n 9 ja -1 n 0 a r-0 p 9 a r-1 p 0 ja -1 n 1 a r-1 p 1 L E in e to (t, le a M v n ris ft xis) L Ep M rice ($ rig t a /t, h xis) 10 30 10 20 10 10 10 00 90 0 80 0 70 0 60 0 50 0 40 0 30 0 20 0

LME lead price and inventories 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 02 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 tin price and inventories
(weekly data)
40 400 00 00 30 300 50 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)

20 03

20 04

20 05

20 06

20 07

20 08

20 09

21 00

Chart Sources: Bloomberg, SEB Commodity Research

21 01

9

Commodities Monthly

Industrial metals
Aluminium futures curve
(LME, $/t)
20 50 27 45 25 40 22 45 20 40 27 35 25 30 22 35 20 30 27 25 25 20 22 25 20 20 27 15 25 10 22 15 20 10 27 05 25 00 m r-1 a 2 m r-1 a 3 m r-1 a 4 se -1 p 4 se -1 p 3 se -1 p 2 d c-1 e 2 d c-1 e 3 d c-1 e 1 ju -1 n 2 ju -1 n 3 ju -1 n 4

Copper futures curve
(LME, $/t)
70 90 75 80 70 80 75 70 70 70 75 60 70 60 75 50 70 50 75 40 70 40 75 30 70 30 75 20 70 20 m r-1 a 2 m r-1 a 3 m r-1 a 4 m r-1 a 5 se -1 p 5 se -1 p 5 ja -1 n 3 se -1 p 4 se -1 p 3 se -1 p 2 d c-1 e 2 d c-1 e 3 d c-1 e 4 d c-1 e 1 se -1 p 5 d c-1 e 5 d c-1 e 5 fe -1 b 3 d c-1 e 5 ju -1 n 2 ju -1 n 3 ju -1 n 4 ju -1 n 5 ju -1 n 5

1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

m r-1 a 5

d c-1 e 4

Nickel futures curve
(LME, $/t)
100 95 190 85 180 85 170 85 160 85 150 85 140 85 130 85 120 85 110 85 100 85 190 75 180 75 170 75 160 75 150 75 140 75 130 75 se -1 p 2 ju -1 n 2 d c-1 e 1 m r-1 a 2

ju -1 n 5

Zinc futures curve
(LME, $/t)
20 10 27 05 25 00 22 05 20 00 17 95 1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

15 90 12 95 10 90 se -1 p 5 se -1 p 4 d c-1 e 4 d c-1 e 5 ju -1 n 5

se -1 p 4

se -1 p 3

d c-1 e 3

se -1 p 3

m r-1 a 5

d c-1 e 3

d c-1 e 4 n v-1 o 2

ju -1 n 4

ju -1 n 3

ju -1 n 3

ju -1 n 4

m r-1 a 4

m r-1 a 3

Lead futures curve
(LME, $/t)
20 30 27 25 25 20 22 25 20 20 27 15 25 10 22 15 20 10 27 05 25 00 22 05 20 00 17 95 15 90 12 95 m r-1 a 4 m r-1 a 3 se -1 p 4 m r-1 a 2 se -1 p 3 d c-1 e 3 ju -1 n 3 ju -1 n 4 se -1 p 2 d c-1 e 2 ju -1 n 2 d c-1 e 1

Tin futures curve
(LME, $/t)
220 30 200 30 280 20 260 20 240 20 220 20 200 20 280 10 260 10 240 10 220 10 200 10 280 00 260 00 240 00 220 00 200 00 se -1 p 5 d c-1 e 5 ju -1 n 5 d c-1 e 1 ja -1 n 2

1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

m r-1 a 2

m r-1 a 3

m r-1 a 4

1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

m r-1 a 5

d c-1 e 4

fe -1 b 2

m r-1 a 2

m j-1 a 2

ju 2 l-1

o 2 kt-1

a r-1 p 2

Chart Sources: Bloomberg, SEB Commodity Research

se -1 p 2

ag 2 u -1

d c-1 e 2

ju -1 n 2

m r-1 a 5

d c-1 e 2

se -1 p 2

d c-1 e 1

d c-1 e 2

ju -1 n 2

10

Commodities Monthly

Precious metals
The gold market has resumed its post-2008 trend following some turbulence in H2-11. Additional outbreaks of volatility should however be expected in coming months during flights to liquidity with the European crisis still in a critical phase and the effects of Chinese monetary tightening topping out. We expect monetary easing in Europe, China and potentially also the US (QE3) to increase liquidity and drive the gold price to new record highs, possibly as early as H1-12. Liquidity will be a stronger influence on market performance than macroeconomic turbulence. Subsequently, recovering growth expectations could begin adversely affecting gold with prices decreasing towards the year end. In coming years the gold market outlook will be determined by several factors, mainly including real interest rates, emerging market demand and mine supply. While our long term gold market view is relatively positive we see a strong probability that the post 2008 gold market rally will culminate in 2012. We forecast an average gold price of $2050/ozt in 2012. The question whether the European Central Bank will print money or not has a considerable bearing on possible gold market developments going forward. So far balance sheet expansion has been very limited compared, for example, to the Federal Reserve and Bank of England. As the EMU treaty does not allow the ECB to buy bonds in the primary market or lend money directly to states, it has only been able to support distressed states indirectly by buying bonds in the secondary market and restricting yields. However, there are several ways to overcome this limitation. The ECB could lend to other parties (e.g. the IMF) which in turn, would lend to states directly. However, the central bank also knows that political commitment is essential to identifying and implementing the necessary correction and that premature intervention would solve only part of the problem. Consequently, extensive monetary easing is unlikely before a credible framework is put in place to resolve the crisis. In addition to quantitative easing, the ECB could cut interest rates further. In the US, QE3 is still possible as growth prospects remain bleak despite recent stabilization of several macroeconomic indicators. The third major liquidity concern is China. As the effects of monetary tightening begin to affect the economy and concerns grow over, for example, a potential real-estate sector collapse, monetary easing also becomes more likely. Bank lending restrictions are once again being relaxed and the market is currently discounting interest rate cuts in 2012. Overall, these issues suggest continued plentiful liquidity and low real interest rates next year.

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 ld o 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 N K O 21 01 C F H

Gold and currencies vs. USD
2 2 2 0 1 8 1 6 1 4 1 2 1 0 8 6 4 2 0 -2 -4 -6 G L OD EU R JPY G BP SEK R B U YT (% D ) M M (% o )

Chart Sources: Bloomberg, SEB Commodity Research

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

11

Commodities Monthly

Precious metals
Gold
• Physical gold ETF holdings printed new highs in December to currently exceed 2300 tonnes. Overall, ETF holdings have continued to increase relatively steadily since their introduction in the early 2000s. US mint gold coin sales, on the other hand, posted a year low in November, probably reflecting the country’s increasingly stable macroeconomic situation. However, European demand for gold coins appears much stronger, as shown by German gold coin imports which have steadily increased during the second half of this year. Speculative positions in COMEX gold remain at their lowest levels since 2009, well above 2008 lows and just below pre-2008 highs.

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 00 21 01 21 01 20 30 Pa d m (le a lla iu 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 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 50 5 30 0 15 50 10 30 15 00 Pla u (rig t a tin m h xis) 25 00

• •

Silver
• • • • Physical silver ETF holdings have stagnated this year to stand currently just below 17500 tonnes, about 1000 tonnes below their high earlier this year. US mint silver coin sales fell to a year low in November, in line with developments in the US gold coin market. Speculative positions in COMEX silver are approaching 2008 lows, and are also relatively modest compared to most of the past decade. Based on a current gold silver ratio of around 53 we regard silver as a viable alternative to gold though we prefer the latter’s key characteristics.

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

Platinum & Palladium
• After peaking at 46.3 tonnes in September physical platinum holdings have decreased to 40.3 tonnes. Their palladium counterparts have maintained an almost yearlong downtrend to 53.0 tonnes after peaking at 73.1 tonnes in February. Speculative NYMEX palladium positions are approaching 2008/2009 lows while remaining relatively high for platinum. Johnson Matthey expects significantly lower supplies of palladium from Russian state inventories in 2012 at 145 kozt vs. 750 kozt in 2011. Following a small market surplus in 2011 it forecasts a deficit in 2012. Regarding the platinum market the company expects a small surplus in 2012 due to increasing South African supply and recycling.

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 90 12 95 10 90 17 85 15 80 12 85 10 80 17 75 15 70 12 75 10 70 17 65 15 60 12 65 d c-1 e 1 m r-1 a 2 ju -1 n 2 se -1 p 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 1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

futures Silver futures curve
(COMEX, $/ozt)
3 ,0 5 3 ,5 4 3 ,0 4 3 ,5 3 3 ,0 3 3 ,5 2 3 ,0 2 3 ,5 1 3 ,0 1 3 ,5 0 3 ,0 0 2 ,5 9 ju -1 n 2 ju -1 n 3 d c-1 e 1 ju -1 n 4 se -1 p 2 d c-1 e 2 se -1 p 3 d c-1 e 3 se -1 p 4 d c-1 e 4 ju -1 n 5 se -1 p 5 m r-1 a 2 m r-1 a 3 m r-1 a 4 m r-1 a 5 d c-1 e 5 ja -1 n 3 1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

Palladium futures curve
(NYMEX, $/ozt)
70 0 60 9 60 8 60 7 60 6 60 5 60 4 60 3 60 2 60 1 60 0 50 9 50 8 50 7 m r-1 a 2 d c-1 e 1 se -1 p 2 d c-1 e 2 ju -1 n 2

Platinum futures curve
(NYMEX, $/ozt)
16 60 14 60 12 60 10 60 18 50 1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9 16 50 14 50 12 50 10 50 18 40 ju 2 l-1 o 2 kt-1 a r-1 p 2 ja -1 n 2 1 -1 -0 1 0 7 1 -1 -0 1 1 9 1 -1 -0 1 2 9

silver Physical silver and gold ETP holdings
(weekly data, tonnes)
20 40 20 30 20 20 20 10 20 00 10 90 Silv r h ld g / 1 e o in s 0 G ld h ld g o o in s

palladium Physical palladium and platinum ETP holdings
(weekly data, tonnes)
7 5 7 0 6 5 6 0 5 5 5 0 4 5 Palla m diu Pla u tin m

10 80 10 70 10 60 10 50 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 10 40

4 0 3 5 3 0 2 5 ja -1 n 0 fe b-10 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 b-11 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 2 0

Chart Sources: Bloomberg, SEB Commodity Research

13

Commodities Monthly

Agriculture
We expect agricultural commodity prices, grains in particular, to trend lower during 2012. The northern hemisphere harvest season is finished turning volatile production estimates into fact. Furthermore, both observed and modelled future la Niña conditions appear weak. In addition, global macroeconomic concerns are likely to continue to dampen market sentiment during H1-12 as the European crisis and the effects of Chinese monetary tightening peak. We therefore downgrade our already bearish outlook for next year even further. Going forward, we expect the sector to gradually normalise following several years of major weather disturbances and record high prices. The main concern outstanding is low inventory levels, for corn in particular, that leave little room for disruptions. Weather, diseases and possible oil price spikes could of course all induce rallies in the agricultural sector in 2012. Grain prices continue to decrease as they have for the past three months. Their decline from record highs was triggered by general upward revisions in production and inventory estimates in the September and October World Agriculture Supply and Demand Estimate (WASDE) reports, in combination with a deterioration in macroeconomic conditions. Production and inventory forecasts were once again upgraded in the December WASDE, consolidating bearish sector sentiment. Global crop weather conditions are partly affected by typical La Niña-related anomalies although these are by no means either extreme or particularly problematic at the moment. Such anomalies are consistent with moderate to weak La Niña observations and model forecasts. The intensity of the phenomenon is expected to peak in December and January before decreasing as spring arrives. The Southern US and some parts of the Midwest remain dry although the situation is expected to improve in coming months. With dormant winter wheat the only crop in the ground market sensitivity to US conditions is limited. The same applies to Europe and western areas of the FSU, where weather conditions are mixed. The main worry at present is heavy la Niñarelated rain slowing the final stage of the Australian winter wheat harvest with adverse effects on quality. Also typically for la Niña, we note so far moderate drought conditions in parts of Argentina and Brazil where corn planting is coming to an end, soybeans are being planted and wheat harvests progress. If conditions worsen this situation could in due course be supportive for grains rather than being, as now, an issue to be kept under observation.

Grains prices
(CBOT, indexed, weekly closing, January 2010 = 100)
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 -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 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 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 1 2

estimate Production and inventory est imate revisions
(WASDE, monthly data, %, June corn inv. est. cut for clarity: -13.4%)
6 5 4 3 2 1 0 -1 n v-1 o 1 -2 C rn p d ctio o ro u n C rn ye r e d in e to s o a n v n rie W e t p d ctio h a ro u n W e t ye r e d in e to s h a a n v n rie S yb a p d ctio o e n ro u n S yb a ye r e d in e to s o e n a n v n rie

ag 1 u -1

Chart Sources: Bloomberg, USDA, SEB Commodity Research

se -1 p 1

14

d c-1 e 1

ju 1 l-1

o 1 kt-1

ju -1 n 1

Commodities Monthly

Agriculture
Corn
• • • • • Ethanol demand for corn is likely to ease as the US subsidy for ethanol blending in gasoline disappears by year end. However, ethanol demand for corn is unlikely to collapse next year as we expect grain prices to continue lower and oil prices to remain high, i.e. encouraging blending. According to Chinese officials, corn production this year has been very strong, although some remain doubtful, regarding the statement as an attempt to restrict prices. Except for low inventory levels and some la Niña-related drought conditions in South America, we see little support for corn prices. The December WASDE includes upward revisions to global corn production and year-end inventories of +1% and nearly +5%, respectively.

Corn price
(CBOT, ¢/bu, front month, weekly closing)
80 0 70 0 60 0 50 0 40 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
2 010 2 010

Wheat
• • • • • • With northern hemisphere winter wheat in the ground and the southern hemisphere winter wheat harvest at a late stage, wheat market uncertainty is relatively low. The main weather-related concern is heavy rain in Australia which is delaying local harvesting, and could adversely affect potential quality. Southern US wheat growing areas remain dry. Crop development would benefit from more rain. In general, the wheat market outlook remains relatively bearish with ample inventories, unlike other grain products. Demand for US wheat continues low as Black Sea grains still flood the market. For the fifth consecutive month wheat production and inventories were revised higher, by +1% and +3% respectively in the WASDE.

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
2 002 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 011

Soybeans
• • This year’s seasonal wave of US soybean exports peaked in November with exports now steadily decreasing. La Niña-related drought in South America is the only obvious weather phenomenon operating at present with the northern hemisphere in between crops over the winter. Soybean oil prices have recovered relative to soybeans since mid-October, although the ratio has remained comparatively stable since mid-2009. Soybean meal prices have continued to weaken vs. soybeans, as they have generally since mid-2009. While soybean production estimates were raised only slightly in the December WASDE, year-end inventories were increased 1.5%.

price Soybean price
(CBOT, ¢/bu, front month, weekly closing)
10 80 10 60 10 40 10 20 10 00 80 0 60 0 40 0
2 002 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 011

• • •

Chart Sources: Bloomberg, SEB Commodity Research

15

21 01

Commodities Monthly

Agriculture
Corn futures curve
(CBOT, ¢/bu)
67 5 11-10-07 65 0 11-11-09 11-12-09 62 5 675 60 0 650 11-1 0-07 625 57 5 600 575 55 0 m ar-12 m ar-13 m ar-14 dec-11 dec-12 dec-13 dec-14 jun -12 jun -13 sep -12 sep -13 jun -14 sep -14 550 m 2 ar-1 m 3 ar-1 jun-1 2 dec-1 1 sep-1 2 dec-1 2 jun-1 3 sep-1 3 11-1 1-09 11-1 2-09

Wheat futures curve
(CBOT, ¢/bu)
775 750 725 700

Soybean futures curve
(CBOT, ¢/bu)
1250 11-10-07 11-11-09 1225 1200 11-12-09

Sugar
(NYBOT, ¢/lb)
4 0 3 5 3 0 2 5

1175 1150

2 0 1 5 1 0

1125

5
1100 jan-12 jan-13 okt-12 okt-13 jan-14 okt-14 apr-12 apr-13 apr-14 jul-12 jul-13 jul-14

0 2 02 0 2 03 0 2 04 0 2 05 0 2 06 0 2 07 0 2 08 0 2 09 0 2 10 0 2 11 0

Cotton
(NYBOT, ¢/lb)
2 20 2 00 1 80 1 60 1 40 1 20 1 00 80 60 40 20 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 1 01

Cocoa
(NYBOT, $/t)
3 0 80 3 0 60 3 0 40 3 0 20 3 0 00 2 0 80 2 0 60 2 0 40 2 0 20 2 0 00 1 0 80 1 0 60 1 0 40 1 0 20 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 1 01

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
2,2 -2,0 79,7 46,4 1,4 0,2 3,0 0,3 -20,4 3,9 0,7 77,8 52,7 1,5 2,0 3,5 -0,1 103,4 67,7 120 0,4 2,4 85,8 49,1 -0,7 1,4 -0,8 0,1 104,9 37,7 12,4 49,0 9,1 4,2 102,3 100,5 15,8 25,6 103,2 49,6

Date
2011-09-30 2011-09-30 2011-12-31 2011-11-30 2011-09-30 2011-09-30 2011-10-31 2011-10-31 2011-11-30 2011-10-31 2011-10-31 2011-10-31 2011-11-30 2011-09-30 2011-09-30 2011-10-31 2011-10-31 2011-03-31 2011-12-31 2011-11-30 2011-10-31 2011-10-31 2011-09-30 2011-11-30 2011-09-30 2011-09-30 2011-11-30 2011-10-31 2011-02-28 2011-11-30 2011-11-30 2011-11-30 2011-09-30 2011-11-30 2011-03-31 2011-10-31 2011-10-31 2011-06-30 2011-03-31 2011-11-30

Previous
6,0 1,2 80,8 47,1 1,7 0,2 3,0 0,8 -19,9 3,1 -0,1 77,3 50,8 1,6 1,3 3,9 0,3 103,1 64,1 100 -3,3 -3,3 89,0 50,6 -1,7 -0,5 -0,5 0,0 104,2 38,5 13,2 50,4 9,5 5,5 102,1 103,4 15,9 25,0 103,0 49,9

Date
2011-08-31 2011-08-31 2011-09-30 2011-10-31 2011-06-30 2011-06-30 2011-09-30 2011-09-30 2011-10-31 2011-09-30 2011-09-30 2011-09-30 2011-10-31 2011-06-30 2011-06-30 2011-09-30 2011-09-30 2011-02-28 2011-11-30 2011-10-31 2011-09-30 2011-09-30 2011-08-31 2011-10-31 2011-06-30 2011-06-30 2011-10-31 2011-09-30 2011-01-31 2011-10-31 2011-10-31 2011-10-31 2011-06-30 2011-10-31 2011-02-28 2011-09-30 2011-09-30 2011-03-31 2011-02-28 2011-10-31

Next
2011-12-14 2011-12-14 2011-12-15

2011-12-15 2011-12-15 2011-12-21

2011-12-15 2011-12-15 2012-01-03 2011-12-22 2011-12-16 2011-12-16 2011-12-22 2012-01-06 2011-12-14 2011-12-14 2011-12-30 2012-02-13 2011-12-28

2012-01-13 2012-01-01 2012-01-13 2012-01-09

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 (%)
-6,3 -6,4 -5,6 5,3 -16,1 18,1 -15,6 7,1 8,8 14,6 -16,4 -18,6 -24,8 -18,4 -3,9 20,5 -6,9 -27,8 -20,6

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

1q (%)
-8,8 -8,8 -8,4 0,8 -10,7 -9,9 -18,3 4,6 14,0 -3,7 -12,8 -11,4 -12,1 -8,3 -8,0 -7,8 -19,4 -18,2 -21,8

1y (%)
-1,1 -1,1 -0,3 8,7 -10,6 21,3 -8,9 -9,0 12,5 19,4 -11,7 -12,7 -21,2 -12,9 2,3 23,0 4,5 -23,4 -13,6

5y (%)
19,9 11,9 43,5 36,2 -4,5 159,1 68,9 -55,2 60,3 74,6 -26,9 13,6 -45,7 -54,0 N/A 173,6 65,3 22,3 68,8

1276,18 1200,33 1529,59 1517,12 1082,57 2552,86 1659,54 1922,00 99,41 108,62 2065,00 7815,00 18600,00 2003,00 547,50 1712,80 585,50 573,50 1107,00

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, 22.00 CET January 18 N/A January 10 January 12 N/A December 14

Contact list
COMMODITIES
Torbjörn Iwarson RESEARCH Bjarne Schieldrop Filip Petersson SALES SWEDEN Pär Melander Karin Almgren SALES NORWAY Maximilian Brodin SALES FINLAND Jussi Lepistö SALES DENMARK Peter Lauridsen TRADING Niclas Egmar

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

E-mail
torbjorn.iwarson@seb.se

Phone
+46 8 506 234 01

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 +46 8 506 230 51 +47 22 82 71 62 +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 +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

DISCLAIMER & CONFIDENTIALITY NOTICE
The information in this document has been compiled by SEB Merchant Banking, a division within Skandinaviska Enskilda Banken AB (publ) (“SEB”). Opinions contained in this report represent the bank’s present opinion only and are subject to change without notice. All information contained in this report has been compiled in good faith from sources believed to be reliable. However, no representation or warranty, expressed or implied, is made with respect to the completeness or accuracy of its contents and the information is not to be relied upon as authoritative. Anyone considering taking actions based upon the content of this document is urged to base his or her investment decisions upon such investigations as he or she deems necessary. This document is being provided as information only, and no specific actions are being solicited as a result of it; to the extent permitted by law, no liability whatsoever is accepted for any direct or consequential loss arising from use of this document or its contents. SEB is a public company incorporated in Stockholm, Sweden, with limited liability. It is a participant at major Nordic and other European Regulated Markets and Multilateral Trading Facilities (as well as some non-European equivalent markets) for trading in financial instruments, such as markets operated by NASDAQ OMX, NYSE Euronext, London Stock Exchange, Deutsche Börse, Swiss Exchanges, Turquoise and Chi-X. SEB is authorized and regulated by Finansinspektionen in Sweden; it is authorized and subject to limited regulation by the Financial Services Authority for the conduct of designated investment business in the UK, and is subject to the provisions of relevant regulators in all other jurisdictions where SEB conducts operations. SEB Merchant Banking. All rights reserved.

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

19

www.seb.se/mb

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