Commodities Monthly

Preparing to quarantine Iran

27 MARCH 2012

Commodities Monthly

Preparing to quarantine Iran
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 jan-12 fe 2 b-1 m ar-12
YT (% D ) M (% /M ) C m ditie om o s

Macro expectations are sobering up following weaker economic data from China and Europe. Chinese monetary policy is likely to remain tight pending a further slowdown in the domestic property market. Data is still consistent with our main scenario – a soft landing. Investors are increasingly cautious as the euphoric effects of Europe’s trillion euro LTRO support for the banking sector wears off.

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

ENERGY
• • •

0-3 M

4-6 M

7-12 M

Seasonal weakness and a less bullish macroeconomic assessment conceal an increasingly tight oil market as Iranian sanctions bite. Politicians have already signalled their intention to release strategic petroleum reserves while Saudi Arabia is boosting drilling activity. Low oil inventories and little reserve capacity will both prove bullish for the oil price during the upcoming recovery.

80

INDUSTRIAL METALS
• • •

0-3 M

4-6 M

7-12 M

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

Industrial metals prices are falling back following their premature early 2012 rally. It is too early to go bullish on the sector with demand unlikely to recover short-term despite stabilised macroeconomic conditions. While we maintain our positive long-term view, risk appears skewed to the downside in the short-term.

PRECIOUS METALS
• • •

0-3 M

4-6 M

7-12 M

Loose monetary policy still leaves open the possibility of further record-high gold prices, especially if inflation expectations pick up. However, as explained in our last report, the decade-long gold bull market appears increasingly likely to end this year. Other precious metals look set to outperform gold in the medium- to long-term as their growth-oriented industrial metal characteristics become more supportive.

AGRICULTURE
• • •

0-3 M

4-6 M

7-12 M

Winners & Losers last month
(%)
10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 -18 -20 -22

Despite grain sector support from weather-related factors, they are now probably fully discounted and bullish momentum finished. Mild weather could enable an early start to US spring planting with positive yield implications. For grains the path of least resistance is lower with the resumption of a bearish trend the most likely scenario going forward.

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

Chart Sources: Bloomberg, SEB Commodity Research

C 2 (E A O U ) P er ow N ga (U ) at. s S C offe (A r.) S r ilve N ickel Pa lladium Tin P er (C ow ont.) Le ad G ld o P latinum Alum ium in S l billets tee C a (U ) oco S H eat. oil (U ) S Zin c S ugar W TI C pper o C orn B rent W heat C otton S oybea ns G asoline

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
We expect China to avoid a hard landing and forecast solid upside for industrial metals over the next 12 months. While the high oil price does not yet threaten the current gradual recovery, sanctions against Iran will tighten the market near term, potentially driving prices to dangerous levels. Moreover, the oil market will remain bullish for several years with the current global economic recovery occurring against a background of low stocks and inadequate spare capacity. While continued fiscal austerity will force central banks to maintain monetary stimulus measures, supporting the price of gold, higher interest rates will eventually terminate its rally. Despite occasional volatility, we still believe the global economy is slowly recovering. While the risk-on rally since mid-December 2011 faces headwinds with weak economic data from both China and Europe, the present environment remains consistent with our main scenario which still assumes a soft landing in China. In particular, with the Chinese government achieving its objective – to cool the property market – it seems in no hurry to ease monetary settings further. However, European euphoria surrounding the ~EUR 1000mn banking sector injection is beginning to wear off. At the same time, continuing fiscal austerity by regional governments and the effects of the credit crunch that hit European companies during the second half of last year are already apparent in weak German and French macroeconomic data. We therefore anticipate a period of instability including the adoption of more realistic (and lower) expectations. Since our previous monthly report the CMCI Commodity price index has decreased 1.8% e.g. due to headwinds from a stronger US dollar (1.2%) and weaker Asian equities (2.6%). All sub-indices declined. Energy traded sideways due to still positive US equity sentiment (S&P 500 +2.3%), widespread general supply issues, and continued support from the Iranian situation. Conversely, industrial metals fell furthest (-4.4%), impacted by ongoing uncertainty surrounding Chinese economic developments. In addition, precious metals were also badly hit (-4.0%) by the combination of a stronger US dollar and positive US economic sentiment raising the inevitable spectre of interest rate hikes, however far out. Agricultural products were decreased only 0.7%. OECD Composite Leading Indicators suggest improving, above-trend economic activity in both the US and Japan, and a reversal of current European economic deterioration with an upturn now likely, albeit still below trend in six months. Those for China indicate a continued deceleration and below trend activity.

Bloomberg 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 21 02

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 21 02

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 A S R fe n e re ce

20 07

20 08

20 09

21 00

21 01

Chart Sources: Bloomberg, SEB Commodity Research

3

21 02

Commodities Monthly

Crude oil
Brent crude is likely to face several headwinds over the next few months. Weak seasonal demand this spring together with fading hopes of a rapid global macroeconomic recovery may potentially interrupt the generally bullish momentum supporting the Brent crude rally so far this year. Nevertheless, we believe any short term weakness will merely mask a probable gradual tightening of the oil market as July 1 approaches when sanctions against Iran fully impact. Anecdotal evidence of widespread hoarding of oil by governments worldwide due to concerns regarding the situation in Iran is already offsetting some seasonal weakness. Iranian oil exports will be restricted in several ways, not only to Europe. In addition to far-reaching US sanctions, European insurance companies will be prevented from insuring shipments of Iranian oil from July 1, a restriction likely to impact that country’s oil shipments worldwide with Europe a global centre for shipping insurance. In conclusion, while we could see oil prices weaken in coming weeks, they will subsequently increase due to the projected full impact of Iranian sanctions and growing seasonal oil demand worldwide. As supplies of Iranian oil decrease they must be replaced by increased supply from Saudi Arabia, oil released from the Strategic Petroleum Reserves (SPR), and drawdowns from commercial stocks. Politicians in the US, UK and France have already provided verbal confirmation of future SPR releases as Iranian oil supplies are restricted. Saudi Arabia is making various preparations. Drilling activity stands at a post-2007 high while plans have already been announced to restart production at its Dammam field, mothballed in 1980. It is also filling its private oil storage facilities worldwide and has contracted 11 VLCCs to transport oil or provide temporary storage. In addition, its leaders have sought to reassure markets by announcing it has spare capacity totalling 2.5 mb/d available if required. Despite question marks over the hoped for global recovery, and particularly the European outlook, the worldwide economy overall still appears set on a gradual upturn over the next two years. Ab initio, European crude oil stocks are around 15-year lows and global stocks below their 5-year average; US oil demand is cyclically low; while the situation will be inevitably compounded by the full impact of the upcoming Iranian oil embargo. In addition, we estimate OPEC reserve capacity at 2.5-3.0 mb/d, a very low level for the start of a cyclical upturn, albeit a weak one. In conclusion, we believe both current and prospective macroeconomic and oil market conditions are likely to remain highly supportive for oil prices over the next few years.

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 21 01
n d

N EXW I YM T IC Bre t E n

US crude oil inventories
(DOE, mb, weekly data)
37 5 37 0 36 5 36 0 35 5 35 0 34 5 34 0 33 5 33 0 32 5 32 0 31 5 j f m a m j j a s o 200 011 av 7-2 g. 201 1 201 2

Chart Sources: Bloomberg, SEB Commodity Research

Current global crude oil demand estimates
2011 (mb/d) 89.1 87.90 87.77 Revision (kb/d) +10 -30 -40 2012 (mb/d) 89.9 88.96 88.63 Revision (kb/d) +10 -290 -130

IEA EIA OPEC

SEB average Brent crude oil price forecast
($/b) 2012 2013 Q1 120 Q2 115 Q3 115 Q4 120 Full Year 118 120

4

21 02

Commodities Monthly

Energy
WTI futures curve
(NYMEX, $/b)
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 m j-1 a 2 ag 2 u -1 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3

Brent futures curve
(ICE, $/b)
16 2 14 2 12 2 10 2 18 1 16 1 14 1 12 1 10 1 18 0 16 0 14 0 12 0 10 0 9 8 9 6 9 4 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3

n v-1 o 2

n v-1 o 3

n v-1 o 4

n v-1 o 2

n v-1 o 3

n v-1 o 4

n v-1 o 5

n v-1 o 5

fe -1 b 3

fe -1 b 4

fe -1 b 5

fe -1 b 3

fe -1 b 4

fe -1 b 5

fe -1 b 6

m j-1 a 2

m j-1 a 3

m j-1 a 4

m j-1 a 5

fe -1 b 6 d

m j-1 a 3

m j-1 a 4

m j-1 a 5

oil Gasoline and heating o il 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 21 02 N EXG so e YM a lin N EXH a g o YM e tin il

ag 3 u -1

ag 4 u -1

ag 5 u -1

m j-1 a 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 7 0 1 v . G so e 2 1 a lin 0 2 D istilla fu l o 2 0 -2 1 a g te e il 0 7 0 1 v . D istilla fu l o 2 1 te e il 0 2

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 21 02

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 3 0 ,0 2 5 ,7 2 0 ,5 n v-1 o 2 n v-1 o 3 n v-1 o 4 m r-1 a 2 m r-1 a 3 m r-1 a 4 m r-1 a 5 n v-1 o 5 2 5 ,2 ju 2 l-1 m r-1 a 6 ju 3 l-1 ju 4 l-1 ju 5 l-1 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3

Chart Sources: Bloomberg, SEB Commodity Research

5

m j-1 a 6

ag 2 u -1

ag 3 u -1

ag 4 u -1

ag 5 u -1

Commodities Monthly

Nordic power
Nordic power price
Nordic power markets have moved dramatically in recent weeks with little sign of the sometimes bullish sentiment driving many other markets. Weather has been seasonably mild and precipitation fairly normal. Normalization of Swedish nuclear generation (currently 82% of capacity is running vs. 75% end of February) has exerted additional pressure. As a result, the hydro balance has improved slightly, sufficient to adversely affect the spot market. We expect hydrogenation pricing at several points during the next quarter as spring flooding exacerbates the situation even further. Finnish area prices significantly exceed both the system and those of other areas due to the Sweden-Finland interconnector problems and the fact that Finnish temperatures have been several degrees lower than in Swedish and Norwegian. The interconnector problem is expected to last well into May. With spring imminent and temperature driven price shocks over, the March system spot price averaged EUR 29.93/MWh (1-27 March). During the same period, and for the aforementioned reasons, the Helsinki price area averaged EUR 36.95/MWh, compared with Stockholm that delivered slightly below system price at EUR 29.80. While the short end of the forward curve has remained under severe pressure, its downside risk is becoming increasingly limited. The long end of the forward market has proved somewhat more resilient. On March 26, Q2-12 changed hand at 26.65/MWh and Cal-13 at EUR 38.70/MWh. We regard the short end of the curve as fairly priced but see a considerable risk given the possibility that prices may collapse when snow melts or whenever temperatures or rainfall are abnormally high or low. We regard Cal-14 and beyond attractive from an end user/consumer perspective and recommend buying while exercising care on timing during current bearish markets.
(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 02

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 01 21 02

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 21 00 21 01 21 02

Chart Sources: Bloomberg, SEB Commodity Research

6

Commodities Monthly

Industrial metals
While we already regarded the industrial metal rally earlier this year as premature, it now also appears to have lost momentum with prices generally developing bearishly. The upturn was triggered and fuelled by several factors including Chinese authorities starting to ease monetary policy, more stable European government debt markets, and further positive US economic indicators. However, we still think it too early to become outright bullish on industrial metals with current prices set against present macroeconomic risks offering an uncertain trade-off between risk and potential return. In China, the world’s largest metal market, authorities remain reluctant to loosen monetary policy much in spite of slowing growth. Further, we doubt European stabilization would significantly increase metal demand in the short- to medium-term. The risk of macroeconomic setbacks in general remains elevated. Also, current low market volatility generally may be temporary with markets lacking specific issues on which to focus. In the short-term, we still regard risk as skewed to the downside although, with our long-term view more positive, sharp reductions in marginal production cost curves could represent attractive long-term buying opportunities. Differences between OECD leading indicators remain substantial. While the US metric currently stands at a post-2007 high, China languishes at a 3-year low. However, Europe has stabilized after falling during 2011 and appears to be starting to rebound. Regarding industrial production the outlook differs with increases in both the US and China remaining relatively stable for several months at around 4% and 13%, respectively. Europe has bottomed at just below 0% after enjoying growth similar to that of the US in late 2011. Consequently, the overall position remains stable to positive apart from negative developments in China’s leading indicator. Although the Chinese bank reserve requirement ratio (RRR) has been lowered twice monetary easing has so far remained limited. At least officially, authorities are signalling a willingness to allow growth to slow towards 7.5% y/y, its lowest rate in a decade which produced an average increase of 11% y/y. However, consensus remains strong that China should be able to engineer a controlled slowdown in its economy including a soft landing. Officials have also stated that real estate prices remain unreasonably high and must fall further, effectively signalling that sector stimulus is unlikely. Unsurprisingly, the domestic real estate climate index continues to deteriorate rapidly, as it has since early 2011. Meanwhile hundreds of millions of public housing units are to be built in 2012, possibly a record high, potentially marking the peak of the current housing construction cycle.

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 21 01 21 02

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

P rice and inventory changes over the last month
(LME)
3 0 2 5 2 0 1 5 1 0 5 0 -5 -1 0 -1 5 -2 0 -2 5 Alu in m m iu Cpe opr N icke l La ed Zin c Tin Ste l e -3 0 Price (% ) In e to s (% v n rie )

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 ja -1 n 2 fe -1 b 2 m r-1 a 2

7

Commodities Monthly

Industrial metals
Aluminium
• • After rebounding from a deep dive into the marginal production cost curve the aluminium market has lost steam, trading largely sideways since mid January. LME inventories have reached new record highs, although due to financial transactions most are being held off market, supporting both prices and overproduction. SHFE inventories also continue to rise due to stronger than expected domestic supply. Meanwhile capacity is being closed down worldwide as a significant percentage remains unprofitable. In the long-term, structural factors including energy and labour cost inflation and increasing use in vehicle production are supportive with downside potentially among the most limited in the sector.

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 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 25 20 20 00 15 70 10 50 15 20 10 00 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

• • •

Copper
• • • Copper has levelled out around the $8400/t level while seeking direction. Industry data show copper production at record highs in early 2012 with demand retreating. LME inventories continue to decrease sharply, with physical copper becoming more scarce in both the US and Europe, increasing futures curve backwardation. The metal continues to show up in SHFE inventories, however, while anecdotal evidence suggests bonded warehouses and end user inventories are also continuing to rise. Both imports and strong domestic copper production explain the build-up in Chinese inventories. We wonder however whether this increase merely reflects lower domestic demand or perhaps also stock building at what are regarded as long-term attractive prices, a situation which has previously occurred.

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 21 02 600 00 500 50 500 00 100 400 100 200 100 000 800 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 21 02 400 50 400 00 300 50 300 00 200 50 200 00 100 50 100 00 50 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) 100 10 100 00 90 00 80 00 70 00 60 00 50 00 40 00 30 00 20 00 10 00

Nickel
• • After trading as high as $22,000/t in February, nickel prices have fallen sharply while the current four month rising trend in LME inventories has continued. Slowing stainless steel production appears to be the main driver behind weaker demand, with both output and consumption probably flat in 2012. Anecdotal evidence suggests Chinese stainless steel mills are cutting production while nickel ore output remains strong. Barring the risk of HPAL project delays the nickel market appears well supplied in coming years. Indonesia is pre-empting its export ban on unprocessed nickel ore (and bauxite) originally scheduled to take effect in 2014 in a move which could reduce Chinese NPI production. The extent of exemptions remains to be clarified.

LME nickel price and inventories
(weekly data)
100 800 100 600 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

8

Commodities Monthly

Industrial metals
Zinc Zin c
• • The zinc market is still surprisingly strong despite current weak fundamentals. LME inventories have returned to post early-1990 highs having trended lower in H2-11. Zinc is mainly supported by various financial deals and an expectation that the market will tighten over the next few years. Negatively however, prices remain too high to significantly reduce overproduction. According to latest ILZSG data, refined zinc production exceeded demand by 23 kt in January. Refined production increased 6% y/y to 1130 kt while consumption rose by 10% y/y to 1107 kt, although mine production was 19% y/y higher at 1160 kt. Growth in both refined and mine production was strong in late 2011 and early 2012.

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 21 02 10 30 10 20 10 10 10 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 ja -0 n 9 ja -1 n 0 ja -1 n 1 a r-0 p 9 a r-1 p 0 a r-1 p 1 ja -1 n 2 300 60 300 30 300 00 30 00 20 50 20 00 10 50 10 00 50 0 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 300 00 200 50 200 00 100 50 100 00 50 00 0 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 200 70 200 40 200 10 100 80 100 50 100 20 90 00 60 00 30 00 90 0 80 0 70 0 60 0 50 0 40 0 30 0 20 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) 50 00 40 50 40 00 30 50 30 00 20 50 20 00 10 50 10 00 50 0

Ferrous metals
• • • • In February and March, iron ore traded around $140/t, with a slight increase to currently $145/t during the past two weeks due to solid Chinese demand. During the same period, scrap and billets have been more volatile. New Chinese production data show crude steel output increased in February by 3% y/y. According to CISA (China Iron and Steel Association) the Chinese steel industry outlook is bearish; CISA forecasts crude steel output of around 680-700m tonnes this year, compared with 683m tonnes in 2011. Still, the iron ore market remains tight at current steel output levels and will enjoy support around $140/t. Eventual demand growth above the present level will require support from Chinese domestic ore production, driving prices even higher.

steel LME st eel billet price and inventories
(weekly data)
900 00 800 00 700 00 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 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 30 50

LME tin price and inventories
(weekly data)
400 00 300 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)

Chart Sources: Bloomberg, SEB Commodity Research

9

Commodities Monthly

Industrial metals
Aluminium futures curve
(LME, $/t)
25 60 20 60 25 50 20 50 25 40 20 40 25 30 20 30 25 20 20 20 25 10 20 10 o 2 kt-1 o 3 kt-1 o 4 kt-1 o 5 kt-1 a r-1 p 2 a r-1 p 3 a r-1 p 4 a r-1 p 5 a r-1 p 6 ja -1 n 3 ja -1 n 4 ja -1 n 5 ja -1 n 6 ju 2 l-1 ju 3 l-1 ju 4 l-1 ju 5 l-1 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3 80 10 85 00 o 2 kt-1 o 3 kt-1 o 4 kt-1 o 5 kt-1 a r-1 p 2 a r-1 p 3 a r-1 p 4 a r-1 p 5 a r-1 p 6 ju -1 n 3 a r-1 p 6 ja -1 n 3 ja -1 n 4 ja -1 n 5 ja -1 n 6 m j-1 a 3 ja -1 n 6 ju 2 l-1 ju 3 l-1 ju 4 l-1 ju 5 l-1 ju 5 l-1 80 20 85 10 85 30 80 30 85 20 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3

curve Copper futures curve
(LME, $/t)
85 40 80 40

Nickel futures curve
(LME, $/t)
260 00 240 00 220 00 200 00 180 90 160 90 140 90 120 90 100 90 180 80 160 80 140 80 120 80 100 80 180 70 ju 2 l-1 ju 3 l-1 o 2 kt-1 o 3 kt-1 ja -1 n 3 ja -1 n 4 a r-1 p 2 a r-1 p 3 a r-1 p 4

Zinc futures curve
(LME, $/t)
27 15 25 10 22 15 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3 27 05 25 00 22 05 20 00 17 95 ju 4 l-1 ju 5 l-1 ju 2 l-1 ju 3 l-1 o 4 kt-1 o 5 kt-1 o 2 kt-1 o 3 kt-1 ju 4 l-1 o 4 kt-1 o 5 kt-1 ja -1 n 5 ja -1 n 6 ja -1 n 3 ja -1 n 4 a r-1 p 5 a r-1 p 6 a r-1 p 2 a r-1 p 3 a r-1 p 4 ja -1 n 5 fe -1 b 3 a r-1 p 5 m r-1 a 3 1 -0 -2 2 1 3 20 10 1 -0 -2 2 2 3 1 -0 -2 2 3 3

Lead futures curve
(LME, $/t)
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 22 05 20 00 17 95 15 90 ju 2 l-1 ju 3 l-1 o 2 kt-1 o 3 kt-1 a r-1 p 2 a r-1 p 3 a r-1 p 4 ja -1 n 3 ja -1 n 4

Tin futures curve
(LME, $/t)
250 40

200 40 250 30

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

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

200 30 250 20

200 20 250 10 ju 4 l-1 ju 5 l-1 m j-1 a 2 o 4 kt-1 o 5 kt-1 ju 2 l-1 o 2 kt-1 a r-1 p 5 a r-1 p 6 a r-1 p 2 ja -1 n 5 ja -1 n 6 se -1 p 2 ju -1 n 2 ag 2 u -1

n v-1 o 2

d c-1 e 2

ja -1 n 3

Chart Sources: Bloomberg, SEB Commodity Research

a r-1 p 3

10

Commodities Monthly

Precious metals
After rising alongside equities in early 2012, gold fell back while shares continued higher. Improving macroeconomic sentiment has been the latest bearish development holding gold in a consolidation pattern, one that has dominated the market since the end of last summer. In spite off this, the post2008 trend remains relatively intact In our opinion, current loose monetary policy may potentially lift gold to new highs in 2012, especially if inflation expectations accelerate before exit policy signals become more apparent. So far, however, the impact of liquidity injections has been relatively limited, with no clear indications central banks are losing control. The longer term upside tail risk in the gold market has moderated substantially in recent months as many macroeconomic indicators have trended higher or stabilized, OECD central banks begun formulating exit plans, and systemic risks decreased significantly. If macroeconomic sentiment were to deteriorate again gold might initially turn down before moving higher once again as markets increasingly expect further measures to stimulate growth. In addition, tail risk regarding the Iranian geopolitical situation should not be disregarded, with any extreme deterioration in the current situation also likely to be supportive for gold. Increasing optimism concerning potential improvements in global growth should signal the beginning of the end of the decade long gold market rally. For this in fact to happen however would require real interest rates to begin trending higher. Substantially increased production after several years of high prices could also contribute to breaking the back of the gold bull. Currently, there are many more new gold mining projects planned than for any other metal. Gold ore production growth increased sharply in early 2012, rising by almost 10% in both January and February before slowing slightly once again. Before the recent acceleration, output increases had slowed from around 10% in early 2009 to negative in late 2011. Developments in ore production should be monitored very closely for early warning signs that gold supply is increasing. While demand from emerging markets is likely to remain strong, gold prices may potentially fall very sharply if its key drivers cease, especially given its extreme price development over the past decade. Holding gold if prices break sharply lower, hoping for a swift recovery, is not recommended. With few tangible price references apart from marginal production costs being far below current prices gold has a long way to fall if several bearish factors impact simultaneously.

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 21 01 N K O 21 02 C F H

Gold and currencies vs. USD
1 0 YT (% D ) 8 6 4 2 0 -2 -4 -6 -8 G L OD EU R JPY G BP SEK R B U 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 ja -1 n 2 fe -1 b 2 m r-1 a 2

11

Commodities Monthly

Precious metals
Gold
• Physical gold ETF holdings printed new highs in March before falling back to 2390 tonnes. Underlying increases in physical investment products (which began when they were introduced) remain intact. Net long speculative positions have tracked gold prices in Q1-12, increasing in January and February and decreasing in March, reflecting changes in long rather than short positions. US mint gold coin sales were extremely weak in February (21 kozt) following seasonally strong demand in January (127 kozt). Demand appears to have improved in March.

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 01 21 01 21 01 21 02 20 30 25 00 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 02 50 5 30 0 15 50 10 30 15 00 21 02

Silver
• • Physical silver ETF holdings continue to recover slowly following a sharp sell-off in H1-11 to currently 17,733 tonnes vs. record 18,639 tonnes. The sharp increase in net long positions in COMEX silver earlier this year was driven both by a reduction in short and build-up in long positions. Over the last month long positions have fallen back slightly. Following the seasonal January peak in silver coin sales (6.1 mozt) demand for US mint coins fell sharply in February to 1.5 mozt, around the 2011 low of 1.4 mozt, although it appears to have accelerated once again during March. With economic sentiment somewhat better silver has good potential to perform well relative to gold, subject to its usual higher volatility.

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 21 00

Platinum & Palladium
• The build-up in physical platinum ETF holdings stalled near record highs in February (43 tonnes vs. a record 46 tonnes) while palladium continued higher (59 tonnes vs. a record 73 tonnes). Net speculative long positions in NYMEX platinum and palladium have been relatively stable over the last month after rising in early 2012, attributable to reduced short and increased long positions. So far this year, both platinum and palladium have strengthened relative to gold. Due to strong demand and supply concerns as macroeconomic conditions stabilize, platinum is positioned to perform well relative to gold. Palladium is also probably well situated provided weak Chinese passenger car sales in early 2012 are temporary.

Platinum and palladium prices
(NYMEX, $/ozt, front month, weekly closing)
10 10 10 00 90 0 Pa d m (le a lla iu ft xis) Pla u (rig t a tin m h xis)

• •

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 a r-1 p 2 ju 2 l-1 o 2 kt-1 ja -1 n 3 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 3 ,0 2 3 ,5 1 ju -1 n 2 ju -1 n 3 ju -1 n 4 se -1 p 2 d c-1 e 2 ju -1 n 5 se -1 p 3 d c-1 e 3 se -1 p 4 d c-1 e 4 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 m r-1 a 6 ju -1 n 6 a r-1 p 3 3 ,5 3 3 ,0 3 3 ,5 2 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3 3 ,5 5 3 ,0 5 3 ,5 4 1 -0 -2 2 1 3 3 ,0 4 1 -0 -2 2 2 3 1 -0 -2 2 3 3

Silver futures curve
(COMEX, $/ozt)
3 ,0 6

Palladium futures curve
(NYMEX, $/ozt)
75 2 70 2 75 1 70 1 75 0 70 0 65 9 60 9 65 8 60 8 65 7 60 7 65 6 60 6 65 5 60 5 m r-1 a 2 se -1 p 2 ju -1 n 2

Platinum futures curve
(NYMEX, $/ozt)
15 70 13 70 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3 17 60 15 60 13 60 11 60 19 50 17 50 m r-1 a 3 d c-1 e 2 15 50 ju 2 l-1 o 2 kt-1 a r-1 p 2 ja -1 n 3 11 70 19 60 1 -0 -2 2 1 3 1 -0 -2 2 2 3 1 -0 -2 2 3 3

silver Physical silver and gold ETP holdings
(weekly data, tonnes)
20 50 20 40 20 30 20 20 20 10 20 00 10 90 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 ja -1 n 2 fe -1 b 2 m r-1 a 2 10 40 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 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 ja -1 n 2 fe b-12 m r-1 a 2 2 0 Pa d lla ium Pla m tinu

Chart Sources: Bloomberg, SEB Commodity Research

13

Commodities Monthly

Agriculture
Grain sector sentiment remained neutral to bullish in March with the weather-related risk premium still refusing to dissipate. However, the only bullish component in the grains complex was soybeans with both corn and wheat prices largely flat since the end of last year. Despite several examples of abnormal weather at present, not all these issues need necessarily develop bullishly, with others more likely to be bearish. Our medium- to long term view remains rock solid bearish with only a new round of extreme weather or a rally in energy prices (probably temporary anyway) able to alter our view. Though the short-term development is less predictable, prices remain high, bullish issues are fully discounted, and bearish factors becoming increasingly apparent (e.g. mild weather which may enable an early start to planting, yields possibly normalizing after several years of bad weather, and high global prices boosting incentives to plant large acreages and stimulate crop development). The grain market seems almost to have forgotten that the situation prevailing before most recent ENSO cyclicality was normal and clearly the most likely development going forward. Overall, grain stocks are certainly not critically low. Latest la Niña forecasts still predict that the phenomenon will finish before the summer, possibly as early as the end of April. Weather is mild or abnormally warm in most agricultural areas of the world. In the US extreme drought conditions have continued to ease although the Great Plains remain relatively dry with temperatures elevated. As winter wheat becomes active more moisture is essential. Temperatures are also very high in the Midwest, which has so far been a bearish factor as it may enable an early start to planting with positive yield implications. Anecdotal evidence suggests that planting is imminent. In Europe weather conditions are also mild with wheat also becoming active after the winter. However, with conditions slightly dry more moisture is needed to support crop development. Conditions in the FSU are more favourable. Meteorologically, South America is mixed. Positively, it is raining in several areas although too late to support corn and soybean yields. In Argentina moisture is relatively high once again while temperatures are elevated which could help crops planted late. Conditions in central Brazil are similar to those in Argentina while southern regions remain seasonally warm and dry.

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 ja -1 n 2 fe -1 b 2 m r-1 a 2 Wet ha S yb a s o en 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 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 1 2

Production and inventory estimate revisions
(WASDE, monthly data, %)
6 5 4 3 2 1 0 -1 -2 -3 -4 n v-1 o 1 d c-1 e 1 fe -1 b 2 ja -1 n 2 m r-1 a 2 se -1 p 1 o 1 kt-1 -5 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

Chart Sources: Bloomberg, USDA, SEB Commodity Research

14

Commodities Monthly

Agriculture
Corn
• • • • Net speculative long positions in CBOT corn have continued to rise over the last month, as a result of both increasing long- and decreasing short positions. US planting start is imminent due to an early spring. US corn exports are well below their 5-year range. It is possible that export demand will recover due to record high domestic Chinese prices. US ethanol production continues on fall sharply from record highs in late 2011 following the removal of blending subsidies and import tariffs. Over the same period the gasoline-to-ethanol ratio has returned to record highs, approaching 1.5, potentially stimulating demand going forward.

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 21 01
2 011 2 011

Wheat
• • • Net speculative positions in CBOT wheat remain negative although fairly volatile due to significant fluctuations in both short- and long positions. US wheat exports are relatively normal for the season after decreasing earlier this year as a result of large export flows from the Black Sea region. Spring wheat planting in the northern hemisphere is imminent with several areas of drought in both Europe and the US. Dry conditions also raise question marks concerning potential winter wheat crop developments as dormant fields become active. Fundamentally, wheat retains the most bearish outlook of all grains.

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 2 010 2 012 2 012

Soybeans
• • • With long positions increasing rapidly and short positions decreasing sharply net speculative length is once again near record highs. Seasonally, US soybean exports have slightly disappointed, quickly approaching a traditional low over the summer. In the US, soybean planting starts after corn. Current high corn prices and a potential early start to the planting season in the Midwest could exert pressure on soybean acreage. This factor, combined with recent adverse weather conditions, means soybeans are the most bullish grain at present, supporting the entire complex. Despite a very tight vegetable oil market, the oil-to-bean ratio has been decreasing while the meal-to-bean ratio has risen.

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 2 010

Chart Sources: Bloomberg, SEB Commodity Research

15

21 02

Commodities Monthly

Agriculture
Corn futures curve
(CBOT, ¢/bu)
65 0 64 0 63 0 62 0 61 0 60 0 59 0 58 0 57 0 56 0 55 0 no 2 v-1 no 3 v-1 feb-13 aug -12 aug -13 feb-14 54 0 m aj-12 aug -14 m aj-13 m aj-14 625 600 aug-1 2 m 2 aj-1 650 700 675 1 1-23 2-0 1 2-23 2-0 1 3-23 2-0 725 750

Wheat futures curve
(CBOT, ¢/bu)
775 12-01-23 12-02-23 12-03-23

nov-12

nov-13

fe b-13

Soybean futures curve
(CBOT, ¢/bu)
1375 1350 1325 1300 1275 1250 1225 1200 nov-12 nov-13 1175 aug-12 m aj-12 12-01-23 12-02-23 12-03-23

Sugar
(NYBOT, ¢/lb)
4 0 3 5 3 0 2 5 2 0 1 5 1 0 5

feb-13

feb-14

aug-13

m aj-13

m aj-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 2 12 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 2 2 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 2 2 01

Chart Sources: Bloomberg, SEB Commodity Research

aug-1 3

m 3 aj-1

16

fe b-14

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
-1,2 0,1 80,0 47,7 0,7 -0,3 2,7 0,5 -19,0 4,0 0,0 78,7 52,4 1,6 3,0 2,9 0,4 103,4 74,3 227 -1,3 1,9 92,4 50,5 -0,6 -0,2 -0,2 0,2 104,9 39,1 12,8 51,0 8,9 3,2 102,3 103,9 15,2 24,9 103,2 51,1

Date
2012-01-31 2012-01-31 2012-03-31 2012-03-31 2011-12-31 2011-12-31 2012-02-29 2012-02-29 2012-03-31 2012-02-29 2012-02-29 2012-02-29 2012-02-29 2011-12-31 2011-12-31 2012-02-29 2012-02-29 2011-03-31 2012-03-31 2012-02-29 2012-01-31 2012-01-31 2012-01-31 2012-02-29 2011-12-31 2011-12-31 2012-02-29 2012-01-31 2011-02-28 2012-02-29 2011-12-31 2012-02-29 2011-12-31 2012-02-29 2011-03-31 2012-01-31 2012-02-29 2011-09-30 2011-03-31 2012-02-29

Previous
-1,7 -1,0 79,6 49,0 1,3 0,1 2,7 -0,8 -20,3 3,6 0,4 78,8 54,1 1,5 1,8 2,9 0,2 103,1 75,3 284 -4,3 3,8 89,4 50,7 -0,4 1,7 -0,2 0,0 104,2 39,4 12,4 50,5 9,1 4,5 102,1 100,5 15,0 25,6 103,0 51,3

Date
2011-12-31 2011-12-31 2011-12-31 2012-02-29 2011-09-30 2011-09-30 2012-01-31 2012-01-31 2012-02-29 2012-01-31 2012-01-31 2012-01-31 2012-01-31 2011-09-30 2011-09-30 2012-01-31 2012-01-31 2011-02-28 2012-02-29 2012-01-31 2011-12-31 2011-12-31 2011-12-31 2012-01-31 2011-09-30 2011-09-30 2012-01-31 2011-12-31 2011-01-31 2012-01-31 2011-11-30 2012-01-31 2011-09-30 2012-01-31 2011-02-28 2011-12-31 2012-01-31 2011-06-30 2011-02-28 2012-01-31

Next
2012-04-12 2012-04-12 2012-04-02 2012-05-15 2012-05-15 2012-04-17 2012-04-17 2012-03-29

2012-04-17 2012-04-17 2012-04-02 2012-03-29 2012-04-13 2012-04-13 2012-03-30 2012-04-06 2012-03-30 2012-03-30 2012-03-30 2012-05-17 2012-03-30

2012-04-13 2012-04-01 2012-04-13 2012-04-09

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 (%)
6,2 6,2 6,6 8,4 7,9 7,6 3,1 -49,4 8,1 16,5 7,6 10,3 -2,9 8,7 -3,8 6,1 0,0 0,2 14,0

1m (%)
-5,0 -5,0 -4,0 2,7 -14,6 14,8 -8,4 -27,5 8,9 12,5 -14,1 -11,1 -36,6 -19,6 -8,1 17,6 -6,5 -14,3 3,5

1q (%)
6,4 6,4 6,7 7,7 7,5 4,7 5,5 -47,8 7,2 15,9 7,8 9,7 -1,8 8,1 -6,4 3,6 4,4 5,2 17,4

1y (%)
-7,1 -7,1 -6,1 -2,8 -16,5 11,6 -6,9 -42,0 1,1 8,3 -17,4 -13,8 -32,2 -17,3 -9,9 15,6 -5,1 -8,4 1,1

5y (%)
24,4 17,9 50,4 44,2 2,4 144,7 75,7 -83,0 71,6 98,1 -21,3 24,7 -56,9 -36,5 N/A 152,9 60,3 41,8 77,5

1346,72 1266,49 1620,67 1617,86 1127,52 2488,01 1800,25 908,00 106,87 125,13 2174,00 8380,00 18175,00 2005,00 510,00 1662,40 646,50 654,25 1365,75

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 (season) April 12 April 12 April 10 April 10 March 29 June 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 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 +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

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