SEB Commodities Monthly

$200/b crude oil back on the radar screen

15 NOVEMBER 2011

Commodities Monthly

$200/b crude oil back on the radar screen

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
YT (% D ) M (% /M ) C m ditie om o s

OECDs Composite Leading Indicators for November points more strongly to a slowdown with below trend growth for Brazil, China, India, Canada and Europe Key commodities like copper and oil are struggling to match demand even in the current weak demand environment calling for higher prices when macro economic conditions stabilize We see an increasing risk that Eurozone debt could spiral out of control and add volatility to commodity markets

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

ENERGY

0-3 M

4-6 M

7-12 M

We revise our average Q4-11 Brent price forecast $5/b higher to $115/b and, our 2012 forecast $4/b higher to $114/b and our 2013 forecast $5/b higher to $120/b Geopolitical risk in the crude oil market has increased further due to renewed focus on Iranian nuclear ambitions, a fullblown conflict could send oil prices above $200/b We expect volatility to remain high into 2012 due to the European sovereign debt crisis and the effects of Chinese monetary tightening The Brent-WTI spread is likely to continue to tighten towards a more fundamentally justifiable $10/b

80

Sector performance last month

(MSCI World, UBS Bloomberg CMCI price indices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 -18

INDUSTRIAL METALS

0-3 M

4-6 M

7-12 M

PRECIOUS METALS

0-3 M

4-6 M

7-12 M

The gold price has returned to the underlying trend after the strong rally and subsequent correction in Q3-11 The European sovereign debt crisis has now reached the core of the European economy as market confidence in Italy and Spain is faltering ECB throwing in the towel and cutting interest rates in combination and likely additional OECD quantitative easing is keeping the liquidity outlook supportive for gold With increasing focus on Iranian nuclear ambitions, geopolitical risk has become a supportive factor for gold again We forecast an average gold price of $1800/ozt in Q4-11 and $2088/ozt in 2012

month Winners & Losers last month

(%)
14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10

AGRICULTURE

0-3 M

4-6 M

7-12 M

We do not expect grain prices to rebound to earlier highs, instead we expect a primarily bearish development over the coming 12 months However, several supportive factors imply that it is too early to sound the all clear signal in the sector We do not expect prices to start falling back significantly until well into 2012 La Nia induced adverse weather over the winter is the main upside risk in the sector going forward

Chart Sources: Bloomberg, SEB Commodity Research

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

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

Agricu re ltu

Ind ustria l m ls eta

Eq uitie s

Pre ciou s m ls eta

Expect continued volatility in the industrial metal sector as the European crisis generates waves of risk aversion and the effects of Chinese monetary tightening peak In other scenarios than a Chinese hard landing, marginal production costs limit the downside risk in most metals We believe conditions will improve significantly in the sector during H2-12, after the worst part of the European slowdown behind and with a less strict Chinese monetary policy triggering a restocking wave

En y erg

Commodities Monthly

General
On the positive side US statistics are stronger than many had feared, supporting investor sentiment. China is probably moving towards the end of its monetary tightening cycle and may well move faster towards stimulation given on-going Eurozone troubles. Developments in Japan are also positive with industry activity increasing for the first time since February. However, OECDs Composite Leading Indicators (CLI) for November points even stronger to a slowdown with below trend growth for Brazil, China, India, Canada and Europe during the next 6 months. For Europe the future looks increasingly unstable. Either politicians produce a credible solution by establishing an appropriate buyer of last resort (potentially the ECB) or the euro may very well disintegrate. Still, the world can probably live with a stagnant, struggling Eurozone in which case the associated printing of high volumes of euros will drive gold prices even higher. However, if Eurozone politicians fail to get their act together we may well see a major, global credit disruption hitting global growth. The lesson of the Lehman Brothers bankruptcy was that a major credit disruption has an immediate global impact on all countries including China. The unrelenting Eurozone turmoil is strangling credit availability to European companies due to stressed banks deleveraging balance sheets. At the same time, European governments are implementing austerity measures. Consequently, lack of credit and budget cuts will depress Euro-zone growth going forward. At present, even Germany is edging closer to stagnation, French economic performance is deteriorating sharply while the rest of the Eurozone is experiencing an accelerating slowdown. Standard and Poors is probably preparing to downgrade French debt which could damage the EFSFs triple A rating. The German Christian Democratic party and Angela Merkel are demonstrating their considerable support for the euro suggesting the political willingness to reach a solution remains. However, the big question is whether markets are willing to allow politicians sufficient time to act. Since our last report the UBS Bloomberg CMCI energy price index (+3.6%) has remained well supported with US data better than some had feared, US and European oil stocks decreasing to an 8-year low and shipments to China increasing in order to alleviate the countrys tight diesel market. The industrial metals index (+1.0%) was very volatile in October showing greatest sensitivity to Asia/China. The agricultural index has also been weak (4.2%). Like the metals index it is also still off 13% since the beginning of September. The precious metals index was the best performer (+7.8%), driven higher by Eurozone turmoil.

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

Commodities Monthly

Crude oil
We revise our Q4-11 average Brent price forecast $5/b higher to $115/b. We also raise our 2012 estimate by $4/b to $114/b (Q1: $110/b, Q2: $110/b, Q3: $115/b, Q4: $120/b) and our 2013 projection by $5/b to $115/b. We do so due to high geopolitical risk, e.g. with the Iranian nuclear issue resurfacing once again, less likelihood of a US recession, en upcoming heating season with low oil product inventories in e.g. Europe and a tightening long term market balance outlook. In particular, the European diesel market is clearly a potential bull trigger. We expect a highly volatile market over at least the next six months with the European debt crisis continuing and further effects from Chinese monetary tightening. While we still acknowledge an upside risk to our forecasts we maintain a conservative stance due to lacklustre 2012 OECD growth forecasts and uncertainty regarding Chinas exit strategy. Since late 2010 geopolitical supply risk has been high due to low OPEC reserve capacity given potential disruptions due to the Arab spring. That risk has escalated following an IAEA report suggesting that Iran is continuing to develop nuclear weapons. If a pre-emptive strike is executed Iran could retaliate by closing off the Strait of Hormuz, an action which could easily send the oil price above $200/b, significantly impeding global growth. After bottoming out in mid-October the Brent-WTI spread narrowed rapidly as WTI began narrowing its discount to Brent. The spread began contract rapidly after it had reached $28/b, a level difficult to justify fundamentally. Road and rail transport costs from oversupplied Cushing to coastal refineries only merits a spread of approximately $10/b while a tighter European vs. US market warrants an additional $5/b spread. Improving US and deteriorating European growth prospects together with increasing Libyan production has begun eroding the spread, a process accelerated by long position closures. We expect the differential to continue to narrow towards $10/b in coming months. The European naphtha and diesel markets are particularly significant at present. While naphtha prices are weak due to low demand from the petrochemical industry, both in Europe and elsewhere, the diesel market is relatively tight as a result of continued solid demand. With low inventories and winter approaching we acknowledge the risk of a European low sulphur diesel induced oil market rally, a central issue in the 2008 oil price spike. In general, light and middle distillate stocks are low and are maintained so since backwardation make holding stocks unattractive.

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 EXW I YM T IC B n E re t

inventories 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 2 006-201 av 0 g. 2 010 2 011

Chart Sources: Bloomberg, SEB Commodity Research

Current global crude oil demand estimates

2011 (mb/d) 89.2 88.23 87.81 Revision (kb/d) -70 -170 +/-0 2012 (mb/d) 90.5 89.62 89.01 Revision (kb/d) -20 -220 +/-0

IEA EIA OPEC

21 01

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 m r-1 a 2 m r-1 a 3 m r-1 a 4 d c-1 e 1 se -1 p 2 d c-1 e 2 se -1 p 3 d c-1 e 3 se -1 p 4 ju -1 n 2 ju -1 n 3 ju -1 n 4

Brent futures curve

(ICE, $/b)
15 1 14 1 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 m r-1 a 2 m r-1 a 3 m r-1 a 4 d c-1 e 1 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 2 ju -1 n 3 ju -1 n 4 1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

m r-1 a 5

se -1 p 5 d

m r-1 a 5

d c-1 e 4

se -1 p 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

d c-1 e 5

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 5 ,7 1 -0 -0 1 9 9 5 0 ,5 5 5 ,2 5 0 ,0 4 5 ,7 4 0 ,5 4 5 ,2 4 0 ,0 3 5 ,7 n v-1 o 1 n v-1 o 2 n v-1 o 3 m r-1 a 2 m r-1 a 3 m r-1 a 4 n v-1 o 4 3 0 ,5 m r-1 a 5 ju 2 l-1 ju 3 l-1 ju 4 l-1 ju 5 l-1 1 -1 -1 1 0 1 1 -1 -1 1 1 1

Chart Sources: Bloomberg, SEB Commodity Research

d c-1 e 5

ju -1 n 5

ju -1 n 5

Commodities Monthly

Nordic power
Nordic power price
Moving in to autumn both actual- and expected rainfall have decreased. Meanwhile temperatures have been well above normal resulting in unusually low consumption and a further increase in reservoir levels. Both Norway and Sweden have seasonally very well filled reservoirs. Still, negatively for hydro the very mild weather has resulted in very little snow. While normally at this time of year snow reservoirs would have begun accumulating, currently almost all precipitation even at higher altitudes has been as rain, instead filling water reservoirs. Meanwhile input from corresponding markets (coal, gas and emissions) has been mainly bearish. On October 1, the new Swedish price areas (Lule, Sundsvall, Stockholm and Malm) were introduced to the spot market. We are critical of the new system which we believe will reduce opportunities for participants to secure a full price area hedge as liquidity and interest in offering them are small. The recent system involving only a single Swedish price area was problematic enough with few players willing to trade. Although when temperatures are mild and there are few supply or grid disturbances differences are limited. Currently, approximately 55% of installed Swedish reactor capacity is running with a further 19 % expected back online this week following annual maintenance. The last two reactors to return following modifications will be Ringhals 2 and 3, both of which plan to reconnect to the grid in December. Overall therefore, the situation may not be as negative. Swedish nuclear energy production plays a key role, not just in helping determine the power price, but also the transmission system balance. Despite a fairly normal hydrological balance high prices are again likely this winter if nuclear availability underperforms when the cold weather begins. The differences between realised spot prices and the nearest monthly forward contracts have gradually disappeared. Since our last report, Q1-12 has remained range bound between EUR 45/MWh and EUR 49/MWh although a serious test of the upside was made when, for two days, the market settled above EUR 50/MWh. Similarly, Cal-12 has traded between EUR 42.50/MWh and EUR 46.50/MWh. Price areas Malm and Stockholm trades with substantial premiums, EUR 11.25/MWh and EUR 4.85/MWh for Q112, respectively. Going forward we still recommend Swedish consumers hedge consumption over the winter. Based on the winter months in 2009 and 2010, and uncertainties still surrounding the situation affecting the countrys nuclear power plants such a strategy offers inexpensive insurance at current prices. For the forward curve we hold a short term neutral view, regarding it as reasonable absent new price signals.
(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

Commodities Monthly

Industrial metals
We expect industrial metals prices to remain volatile for the rest of this year and well into 2012 as the European sovereign debt crisis generates waves of risk aversion and Chinese monetary tightening peaks. We still see no reason to believe Chinas hard landing scenario will occur as signs now suggest restrictions will be eased soon. Further, economic stability remains a key strategic priority during the countrys change of leadership next year. We also see little price downside for most metals as prices have fallen into line with marginal production costs. With the market apparently discounting some risk of a Chinese hard landing, we anticipate significant upside in industrial metals prices in H2-12 when the worst of the European growth slowdown has passed and a less strict Chinese monetary policy triggers a wave of restocking. While China is likely to remain the decisive factor for metals prices over the next year the extreme risk of a Euro-zone meltdown should not be disregarded, at least until the situation clearly stabilises. After the Chinese clampdown on the countrys shadow banking system in Q3-11 efforts to tighten monetary conditions appear to have peaked with evidence now suggesting that its stricter policy is proving increasingly effective. Currently, policymakers are even suggesting that monetary policy may soon be eased, mainly for small- and medium sized enterprises, infrastructure projects and public housing. Consequently, we would expect bank lending to increase in Q4. We believe easing will continue going forward, e.g. in the form of reserve requirement ratio reductions for banks, although we recommend careful monitoring of CPI and GDP growth data to determine expectations. However, with measures to tighten monetary policy normally requiring several months to take effect there is therefore still some risk of recurrent bouts of concern over the risk of a hard landing which may in turn exacerbate sector volatility. The iron ore market slump accelerated in October with no recovery occurring until prices had fallen by around 35%, i.e. to 2010 lows. The slump was driven by several factors. Buyers have been more wary with demand restricted by global slowdown concerns, tight Chinese credit conditions and a softer real estate sector. In addition, as spot prices began to fall vs. contract prices, buyers began refusing delivery of fixed price contracts. As a result, significant volumes needed to be dumped into the spot market exacerbating the existing slump. We regard the current sell-off as excessive and not an indication of further downside in the industrial metal sector. Instead, we expect a rebound as metal buyers return, attracted by low prices followed by restocking demand as Chinese credit conditions ease.

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 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

6 4 2 0 -2 -4 -6 -8 -1 0 -1 2 -1 4 -1 6 -1 8 -2 0 -2 2 -2 4 -2 6

Alu in m m iu

Cpe opr

N icke l

La ed

Zin c

Chart Sources: Bloomberg, SEB Commodity Research

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

Commodities Monthly

Industrial metals
Aluminium
Current aluminium prices are likely to remain well supported due to stable inventories, solid demand and unprofitable Chinese high cost producers. Chinese marginal production is likely to be cut relatively quickly in response to lower prices, limiting further decreases. We do not expect aluminium prices to fall below $2000/t unless the risk of a Chinese hard landing increases or the European situation deteriorates significantly. LME inventories remain high while their Chinese counterparts are stabilizing at low levels. Estimates suggest 25% of smelters worldwide are unprofitable.

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
Copper prices remain well above marginal production costs and are thus sensitive to changes in sentiment. With marginal production costs becoming material around $6500/t, we regard copper as an obvious medium- to long term buy around the same level. We forecast average copper prices of $7500/t in Q4-11, increasing to $9500/t in Q4-12. Copper supply continues to suffer from strikes, bad weather and other production disturbances, resulting in almost no output growth year-on-year. The third largest mine in the world, Grassberg, is almost at a standstill due to infrastructure disruptions which may last until the end of this year. We expect the copper market to remain in substantial deficit in 2012 with a potentially looser market balance in 2013.

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 01 600 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 01 400 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
Strong Q3-11 production growth, mainly from conventional sources, is probably a significant factor behind recent price weakness. With Chinese nickel pig iron (NPI) production under pressure at current prices we see little further downside in nickel, particularly with prices having fallen alongside inventories for most of this year. Lower prices also risk the further postponement of High Pressure Acid Leach (HPAL) projects, negatively impacting the supply growth outlook. Most likely, nickel will trade around $20000/t next year with HPAL and NPI supply major uncertainties.

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

Commodities Monthly

Industrial metals
Zinc Zin c
The zinc market shows positive signs though a bullish stance would be premature. LME zinc inventories have finally begun to decline after increasing since 2007, the first indication that the market balance is beginning to tighten. Our main scenario is that the zinc market will tighten further during 2012 and be in balance by the end of the year. We still regard zinc as a weak industrial metal and mainly regard rallies as good selling opportunities.

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

Steel
After a weak September iron ore fell sharply to $117/t in October before recovering to $138/t. European HRC has fallen 6.7% in the last 30 days and 21% since peaking in March. The decline in the SBB World HRC index since September is accelerating. LME billets have fallen 10% since the beginning of September but have been largely unaffected by the past months iron ore sell-off. Ferrous prices are likely to continue to grind lower due to continued effects over the next six months of Chinas monetary tightening in the past year. Also, OECD composite leading indicators signal below trend growth in Brazil, China, India and the Eurozone.

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 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 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

(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)

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)

Chart Sources: Bloomberg, SEB Commodity Research

Commodities Monthly

Industrial metals
Aluminium futures curve
(LME, $/t)
22 65 20 60 27 55 25 50 22 55 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

Copper futures curve

(LME, $/t)
80 90 80 80 80 70 80 60 80 50 80 40 80 30 80 20 80 10 80 00 70 90 70 80 70 70 70 60 70 50 70 40 70 30 70 20 70 10

1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

n v-1 o 1

n v-1 o 2

n v-1 o 3

n v-1 o 4

n v-1 o 5

n v-1 o 1

n v-1 o 2

n v-1 o 3

n v-1 o 4

m j-1 a 2

m j-1 a 3

m j-1 a 4

m j-1 a 5

m j-1 a 2

m j-1 a 3

m j-1 a 4

m j-1 a 5

Nickel futures curve

(LME, $/t)
250 10 220 15 200 10 270 05 250 00 220 05 200 00 170 95 150 90 120 95 100 90 170 85 150 80 120 85 100 80 170 75 150 70 120 75

ag 2 u -1

ag 3 u -1

ag 4 u -1

ag 5 u -1

Zinc futures curve

(LME, $/t)
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 12 95 10 90 17 85

1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

ag 2 u -1

ag 3 u -1

1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

n v-1 o 5

ag 4 u -1

ag 5 u -1 d c-1 e 2 ag 5 u -1

n v-1 o 4

n v-1 o 3

n v-1 o 2

n v-1 o 1

n v-1 o 1

n v-1 o 2

n v-1 o 3

n v-1 o 4

m j-1 a 5

m j-1 a 4

m j-1 a 3

m j-1 a 2

m j-1 a 2

m j-1 a 3

m j-1 a 4

ag 4 u -1

ag 3 u -1

ag 2 u -1

Lead futures curve

(LME, $/t)
25 50 22 55 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 22 05 20 00 17 95 15 90

Tin futures curve

(LME, $/t)
280 30 260 30 240 30 1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1 220 30 200 30 280 20 260 20 240 20 220 20 200 20 280 10 1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

n v-1 o 1

n v-1 o 2

n v-1 o 3

n v-1 o 4

n v-1 o 5

n v-1 o 1

m j-1 a 2

m j-1 a 3

m j-1 a 4

m j-1 a 5

m r-1 a 2

m j-1 a 2

ag 5 u -1

d c-1 e 1

ag 3 u -1

ag 4 u -1

ag 2 u -1

n v-1 o 2

fe -1 b 2

fe -1 b 3

fe -1 b 4

fe -1 b 5

fe -1 b 2

260 10

ja -1 n 2

ag 2 u -1

ag 3 u -1

ju 2 l-1

ag 4 u -1

o 2 kt-1

a r-1 p 2

m j-1 a 5

ag 5 u -1

Chart Sources: Bloomberg, SEB Commodity Research

se -1 p 2

ju -1 n 2

ag 2 u -1

10

ja -1 n 3

n v-1 o 5

fe -1 b 5

fe -1 b 4

fe -1 b 3

fe -1 b 2

fe -1 b 2

fe -1 b 3

fe -1 b 4

fe -1 b 5

n v-1 o 5

fe -1 b 2

fe -1 b 3

fe -1 b 4

fe -1 b 5

fe -1 b 2

fe -1 b 3

fe -1 b 4

fe -1 b 5

Commodities Monthly

Precious metals
The gold market has continued to develop in line with our expectations, returning to its long term price trend following a September correction, driven mainly by the continuing European sovereign debt crisis. We remain bullish concerning prospects for the next 12 months (average price forecasts: Q4-11 $1800/ozt, 2012 $2088/ozt). We still regard the break-up of the Euro-zone as a real possibility, even though the probability is low. In addition, we see further stimulus measures and easier monetary policies ahead, with liquidity injections to avoid a deep OECD recession. Geopolitical risk has also become gold supportive due to the Iranian nuclear issue and possible military action. If strong risk aversion were to impact the gold market, e.g. in a race for liquidity, we would expect it to find solid support around $1550-1600/ozt before quickly rebounding. The European sovereign debt crisis has entered a new stage with authorities refocusing away from the problematic but relatively manageable Greek crisis to Italy, the Euro-zones third largest economy. With Italy too big to bail out the risk that the Euro-zone may breakup completely has increased substantially. It was the slow and disorderly reaction to the Greek crisis that paved the way for the rapid loss of confidence in the ability of Italys leaders to handle the situation. While Italian problems are manageable the market is sceptical that politicians will be able to do what is needed, i.e. negotiate and implement a credible austerity package. Meanwhile the ECB is buying Italian bonds in order to hold the situation together and give politicians time to devise the necessary response. However, the central bank has repeatedly stated it will not finance government debt by printing money. So far they have had little choice but to do so and it is difficult to see any attractive alternatives going forward. European money printing and fears the Euro-zone may break-up are both strongly supportive factors for gold. We note also that a disorderly sell-off of Italian gold reserves to raise cash is unlikely. Such transactions are improbable and even if they were necessary would be carried out off market. With the ECB somewhat unexpectedly cutting interest rates in early November, from 1.50% to 1.25%, and with further potential cuts likely as the economic outlook deteriorates and inflation concerns recede the liquidity conditions best for gold continue to improve. We expect further monetary and fiscal support efforts within the OECD which also help gold. While actual US and Eurozone inflation data remain on an uptrend, inflation itself decreased in China during October, paving the way for a relaxation of monetary policy. At the same time, we see little likelihood that the countrys appetite for gold will ease anytime soon.

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 S e ilv r P tin m la u G ld o P lla iu a d m

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 6 2 4 2 2 2 0 1 8 1 6 1 4 1 2 1 0 8 6 4 2 0 -2 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

11

Commodities Monthly

Precious metals
Gold
Physical gold ETF holdings survived the market consolidation almost unscathed and currently stand at 2313 tonnes, 17 tonnes below the all-time high. Net speculative long positions at COMEX however remain around two year lows, signalling significant risk of a bullish accumulation in speculative positions going forward. According to local sources Chinese gold demand is expected to increase by approximately 50% in 2011, supporting our view that rising Asian demand is one of several major fundamental gold market drivers. Recently, mine supply of gold has come under pressure with the Grassberg copper mine in Indonesia, also accounting for around 5% of global gold mine supply, at a standstill due to an equipment failure which may last until the year-end.

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) Pla u (rig t a tin m h xis) 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 01 50 5 30 0 15 50 10 30 15 00

Silver
After falling sharply earlier this year physical silver ETF holdings have recover to 17451 tonnes, 1236 tonnes below their all-time high. Net long speculative positions in COMEX silver are at their lowest level since early 2009 with, like gold, bullish implications in current market conditions. Once again, the gold/silver ratio has edged above 50, supporting our interest in silver. Still, we prefer exposure to gold which possesses those properties likely to be most bullish going forward. US mint silver coin production in October decreased to a relatively normal level for the current year (3,064,000 coins).

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

Palladium holdings are now showing signs of bottoming out after having fallen back since the beginning of the year while platinum holdings remain stable. While net long speculative positions in platinum are still relatively high, those for palladium remain depressed. While Thai flooding hurt auto production the general demand situation from this key source is positive despite the adverse effect of Chinese tightening. Platinum remains firm vs. palladium on supportive long term supply fundamentals. Russian state inventories remain the decisive factor for the palladium market. Sharply lower supply from this source is a risk in 2012 and 2013. The fact that the palladium market has managed to absorb EFT outflows suggests demand is sound.

Platinum and palladium prices

(NYMEX, $/ozt, front month, weekly closing)
10 10 10 00 90 0

Chart Sources: Bloomberg, SEB Commodity Research

12

Commodities Monthly

Precious metals
Gold futures curve
(COMEX, $/ozt)
22 05 20 00 17 95 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 1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

Silver Silver futures curve

(COMEX, $/ozt)
4 2 4 1 4 0 3 9 3 8 3 7 3 6 3 5 3 4 3 3 3 2 3 1 3 0 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 1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

Palladium futures curve

(NYMEX, $/ozt)
70 5 70 4 70 3 70 2 70 1 70 0 60 9 60 8 60 7 60 6 60 5 60 4 60 3 60 2 60 1 60 0 50 9 m r-1 a 2 d c-1 e 1

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 m r-1 a 7 ju -1 n 7

Platinum futures curve

(NYMEX, $/ozt)
16 80 14 80 12 80 10 80 18 70 16 70 14 70 12 70 10 70 18 60 16 60 14 60 12 60 10 60 18 50 16 50 14 50 12 50 10 50 a r-1 p 2 ja -1 n 2

1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

1 -0 -0 1 9 9 1 -1 -1 1 0 1 1 -1 -1 1 1 1

se -1 p 2

d c-1 e 2

ju -1 n 2

ju 2 l-1

o 2 kt-1

m r-1 a 5

silver Physical silver and gold ETP holdings

(weekly data, tonnes)
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 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 2 0 Pa d lla ium Pla m tinu

Chart Sources: Bloomberg, SEB Commodity Research

13

ja -1 n 3

d c-1 e 5

Commodities Monthly

Agriculture
The grain market rebound following the general commodity market slump in September has been mitigated by pressure from the northern hemisphere harvest. We do not expect grain prices or agricultural commodity prices in general, to rebound to highs hit earlier this year. Instead we forecast a mainly bearish development over the next 12 months. However, during the next six months we see several factors which could drive grain prices higher once again or at least support them at an elevated level. It is therefore premature to sound the all clear signal in the agricultural sector. The combination of low inventories and high weatherrelated risks are of primary concern. As in most other commodity markets, high volatility should also be expected in the agricultural sector due to the potential impact of both the European sovereign debt crisis and the impact of tight Chinese credit conditions. Current factors supporting the agricultural commodity market include high energy prices, US ethanol producers moving quickly to take advantage of the blending subsidy before it ends by new year, elevated US cattle prices, strong Chinese feed demand and Thai flooding sharply reducing rice production estimates. Adverse weather due to a stronger La Nina effect is the most obvious upside risk for the rest of this year and early next. An oil price rally, possibly induced by the Iranian nuclear issue or European product market tightness, would also send agricultural prices higher. For obvious reasons meteorological conditions are generally the main driver of agricultural commodity prices. Particularly in recent years the weather has been in focus due to the El Nio and La Nia weather anomalies, both of which have inflicted heavy losses. Forecasts still suggest another La Nia which could peak between November and January. Both computer models and historical precedent suggest a weaker recurrence than in 2010-2011. If La Nia weakens in H1-12 as forecast, growing conditions will probably begin to normalize, inventory level expectations will be revised higher and agricultural prices could begin moving sharply lower. However, going forward we should expect above average rainfall in Southeast Asia and Australia, which could be beneficial unless it causes flooding or interferes with harvests, such as the Australian. In addition, there is a risk that drought conditions in the southern US states could continue with a potential adverse effect on wheat planting. Another possible risk is drought in South America, which could impact corn and soybean production.

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 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 So e n yb a s C rn o

Year end grain inventories (days of supply)

(USDA, 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

Chart Sources: Bloomberg, USDA, SEB Commodity Research

14

Commodities Monthly

Agriculture
Corn
The November World Agricultural Supply and Demand Estimates (WASDE) published by the USDA revealed a 1.10 mt downward revision of global 2011/2012 production to 858.99 mt and a 1.62 mt downgrade in ending stocks to 121.57 mt. While weather conditions have been mixed the US harvest is well ahead of its five year average and almost completed. Although China appears likely to post record crop demand growth continues to outstrip increases in supply due to strong demand for feed caused by rapidly rising meat consumption. Naturally this has bullish implications for import demand in coming years. Corn is likely to be supported by strong ethanol demand for the rest of this year while substitution with low quality wheat could limit upside potential.

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
Global 2011/2012 wheat production estimates increased 2.1 mt to 683.30 mt according to the WASDE while ending stocks only rose 0.23 mt to 202.60 mt due to higher consumption estimates. US winter wheat planting is nearing completion despite dry conditions in southern growing regions and consequent poor crop development. The market is currently refocusing on the Australian harvest which is expected to be highly satisfactory. The strengthening La Nia could however interfere with the harvest. Plentiful lower quality wheat supplies, particularly from the Black Sea region, are easing pressure in grains while the tight corn supply is having the opposite effect.

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
Global 2011/2012 soybean production estimates increased slightly, by 0.31 mt to 258.91 mt according to the WASDE while ending stocks only rose 0.55 mt to 63.56 mt. While weather conditions have been mixed the US harvest is ahead of its five year average and close to completion. As the northern hemisphere harvest comes to an end the market is refocusing on South American growing conditions and potential La Nia-related drought. The harvest begins in Q2-12. The entire soybean complex has moved lower in recent months, with relatively stable ratios between beans, meal and oil.

pric ice 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)
77 5 75 0 72 5 70 0 67 5 65 0 700 62 5 60 0 57 5 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 -14 675 650 625 600 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 11-09-09 11-10-11 11-11-11 11-09-09 11-10-11 11-11-11

Wheat futures curve

(CBOT, /bu)
850 825 800 775 750 725

Soybean futures curve

(CBOT, /bu)
1450 1425 1400 1375 1350 1325 1300 1275 1250 1225 1200 1175 nov-11 nov-12 nov-13 nov-14 feb-12 feb-13 feb-14 1150 aug-12 aug-13 aug-14 m aj-12 m aj-13 m aj-14 11-09-09 11-10-11 11-11-11

Sugar
(NYBOT, /lb)
4 0 3 5 3 0 2 5 2 0 1 5 1 0 5 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 47,1 1,6 0,2 3,0 0,8 -19,9 3,2 0,2 77,4 50,8 1,6 2,5 3,9 0,3 103,4 64,2 80 -3,3 -3,3 85,8 50,6 0,0 1,5 -0,5 0,0 104,9 38,5 13,2 50,4 9,1 5,5 102,3 103,4 15,8 25,6 103,2 50,0

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

Previous
6,0 1,4 80,8 48,5 2,4 0,8 2,5 0,2 -19,1 3,3 0,1 77,3 51,6 1,6 1,3 3,8 0,4 103,1 60,9 158 0,4 0,6 89,0 49,3 -1,1 -0,3 -0,3 0,2 104,2 38,5 13,8 51,2 9,5 6,1 102,1 110,4 15,9 25,0 103,0 49,8

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

Next
2011-11-14 2011-11-14 2011-11-23 2011-11-15 2011-11-15 2011-11-16 2011-11-16 2011-11-22

2011-11-16 2011-11-16 2011-12-01 2011-11-22 2011-11-16 2011-11-16 2011-11-23 2011-12-02 2011-11-14 2011-11-14 2011-11-30 2011-11-14 2011-11-25

2011-12-09 2011-12-01 2011-12-09

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 (%)
-3,9 -3,9 -3,3 7,2 -17,0 23,6 -9,9 2,2 8,3 20,5 -12,5 -20,4 -27,0 -21,8 -7,0 25,8 1,5 -22,3 -16,3

1m (%)
2,0 1,9 2,2 6,3 1,7 7,9 -3,1 -12,9 15,4 3,1 -3,1 4,8 -4,2 0,5 -3,6 7,7 -1,0 -6,7 -5,6

1q (%)
-4,9 -5,0 -4,5 3,6 -12,4 0,4 -9,1 43,7 15,5 5,7 -10,4 -14,0 -16,3 -12,2 -7,0 2,2 -9,1 -12,0 -12,6

1y (%)
0,7 0,6 1,4 12,8 -14,2 26,9 -5,2 -22,4 12,7 28,5 -12,0 -13,5 -24,7 -24,5 2,4 27,4 13,2 -12,4 -12,3

5y (%)
24,7 16,0 49,1 40,1 -2,2 172,8 80,1 -56,4 66,1 91,2 -19,8 10,4 -38,5 -55,3 N/A 183,8 86,0 28,4 79,0

1309,54 1231,73 1567,25 1544,77 1070,94 2672,76 1771,28 1835,00 98,99 114,16 2162,00 7639,00 18075,00 1920,00 530,00 1788,10 638,50 616,75 1166,00

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 December 13 December 13 December 6 December 9 November 24 December 14

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

Position
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 banks 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 Brse, 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

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www.seb.se/mb