ANZ Commodity Weekly
ANZ Commodity Weekly
What relief package?
Market drivers this week 11 November 2008 y Base metals should fall despite the release of the Chinese stimulus package over the weekend. The initial euphoria is giving way to caution that Inside: the large infrastructure-based initiatives will be lagged (into 2010) - and Market drivers...... 1 would have already been partly priced-in weeks earlier when major metal Wrap and outlook ...... 2 production cutbacks were announced. The timing of the package could also be flagging (trying to offset) potentially weak China data out this week. CFTC data ...... 4 Commodity news...... 5 y Gold could again be choppy, but the risks remain on the downside, with Price tables ...... 6 sentiment remaining generally weak. More influence will come from the oil Forward curves ...... 8 price after a more exceptional week last week with US elections and large European rate cuts influencing price. The equity market appears to be Moving averages ...... 9 giving mixed signals, but a slightly easing VIX index (option volatility on the Economic calendar...... 10 S&P500) could give a lower incentive for safe-haven buying. A rising trend Forecasts table ...... 11 in CFTC gold shorts could be repeated this week, triggering lower prices. Contacts ...... 12 y Oil price should fall as growing concerns about demand offsetting the
view that prices had fallen far enough. Falling OPEC supply is being largely ignored, while the more sensitive demand outlook has been further downgraded by the well-watched IEA. The Chinese stimulus package hardly registered, suggesting oil remains a US demand story. Accordingly, the weekly DOE numbers will be closely watched. Authors: y Coal prices should fall tracking lower oil prices. Buying interest appears Mark Pervan Senior Commodity Strategist to be picking up in Asian markets, but probably reflects a switch away from +61 3 9273 3716 higher price Chinese coal to lower price Indonesian and Australian coals. [email protected] Clouding that view is lower shipments and a smaller shipping queue at Newcastle, suggesting a drop in demand. Reports that European buyers are sidelined to see the impact that global recession will have on prices Natalie Robertson confirms this view. Graduate Analyst +61 3 9273 3716 [email protected] Figure 1: % price performance for the week ending 7 November 2008
10.4 Tin 3.8 Platinum 3.2 Coal 2.1 Silver 1.7 Gold (2.9) Zinc (4.2) Aluminium (9.0) Copper (9.4) Nickel (9.9) Lead (10.0) Oil
(15) (10) (5) 0 5 10 15 Weekly % change
Source: Bloomberg, globalCOAL
ANZ Commodity Weekly - 11 November 2008
Wrap and outlook
Base metals Base metals were mainly weaker last week with large increases in LME supply and weak Chinese data offsetting a choppy USD. The mood started on the back foot, with the release of disappointing China manufacturing data - measured by the CLSA Manufacturing Purchasing Managers Index – which fell further below 50 for the second month in a row signaling contracting commodity demand. A large jump in LME copper supply, mainly in European warehouses dragged copper prices 9% lower – offsetting the 8.5% gain the week before. Tin was the only positive performer, up 10.4% after LME supply fell a stunning 18.6% to a two and a half year low.
China’s stimulus package Base metals should fall despite the release of the significant US$586b Chinese loses its impact stimulus package over the weekend. The initial euphoria is giving way to caution that the large infrastructure-based initiatives will likely be lagged (into 2010) - and would have already been partly priced-in weeks earlier when major metal production cutbacks were being announced. The early timing of the stimulus package could also be flagging (trying to offset) potentially weak China economic data out this week. The sharp increases in LME (copper) supply are also a signal that global demand conditions will continue to disappoint. Prices over the coming months are likely to ease, with weakening demand conditions dictating sentiment. Major leading economic indicators are pointing downwards, metal consumers are slowing for summer holidays and Chinese demand may ease post the Olympics. The USD looks choppy, but has set an upward trend in the last three months. Limiting some of the downside will be the already sharp falls in prices over the last three months - and in nickel, lead and zinc - prices bumping along the top-end of the curve cost. Precious metals Precious metals rose last week in a choppy trading range. In fact it was a tough week to gauge sentiment with a number of drivers moving in opposite directions – not least a US election and soft US payroll data and European rate cuts. Underlying this, gold prices held up relatively well with another sharp drop in oil prices and a mildly firmer USD normally triggering gold selling. Platinum was the best performer, up 3.8% on, with the market increasingly looking for a bottom, after precipitous falls over the past three months.
Risks remain on the downside Gold could again be choppy this week, but the risks remain on the downside, with sentiment remaining generally weak. More influence will come from the oil price after a more exceptional week last week with US elections and large European rate cuts influencing price. The equity market appears to be giving mixed signals, but a slightly easing VIX index (option volatility on the S&P500) could give a lower incentive for safe-haven buying. A rising trend in CFTC gold shorts could also be repeated this week, triggering lower prices. We expect gold prices to be choppy to lower in the coming months although concerns of further financial fallouts could trigger some short term rallies. Falling oil prices and a firming USD will continue to weigh on prices, while the possibility of a recovery in equity markets should take a major support out of the gold price. However, the record high VIX index will continue to support safe-haven flows. Holding back further falls will be a seasonal pickup in Indian demand (for the fourth quarter wedding season).
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ANZ Commodity Weekly - 11 November 2008
Oil Oil dropped sharply again last week, the fourth time in 6 weeks that we have seen oil prices slide 10% or more. Weak US ISM data, with factory activity falling to a 26-year low and negative IMF global growth and oil predictions (2009 down to US$68/bbls from US$100/bbls) heightened energy demand concerns. Another bearish weekly DOE (Department of Energy) report fuelled selling, with US gasoline stocks climbing last week amidst falling demand. Global demand fears outweighed reports of OPEC countries complying with agreed monthly oil supply cuts. Oil price should fall this week as growing concerns about demand offsetting the Falling OPEC supply is being view that prices had fallen far enough. Falling OPEC supply is being largely ignored ignored, while the more sensitive demand outlook has been further downgraded by the well-watched IEA. The Chinese stimulus package hardly registered, suggesting oil remains a US demand story. Accordingly, the weekly DOE numbers will be closely watched. Prices over the coming months look vulnerable to a further weakness, as sentiment continues to plummet on a weakening demand backdrop. The latest US financial fallout has heightened concerns about US growth – which will affect oil the most – still being its’ largest end-user market (by far). We would expect OPEC to respond with production cutbacks in the near term. However, with prices still comfortably above the top end of the cost curve, and the focus clearly on demand conditions, tightening supply will unlikely create much price support. Coal Coal rose last week, despite weakening demand in Europe and China. Coal prices from Qinhuangdao underperformed, down 4.4% to US$129/t FOB on rising stockpiles (up 6% MoM to 8.8mt) and reports that power plants were amply supplied ahead of the winter season. News that Shanxi - China’s top coal producing province - is cutting coking coal production by 10%, also weighed on sentiment. On the flipside, thermal coal prices from Indonesia and Newcastle were buoyed on buying interest from Asian utilities. Indonesian prices were additionally supported on predictions by the national electricity firm that three new power plants would require 40mt of coal in 2009, up from 35mt this year. Coal prices should fall this week tracking lower oil prices. Buying interest Buying interest picks up in appears to be picking up in Asian markets, but probably reflects a switch away Asian markets from higher price Chinese coal to lower price Indonesian and Australian coals. Clouding that view is lower shipments and a smaller shipping queue at Newcastle, suggesting a drop in demand. Reports that European buyers are sidelined to see the impact that global recession will have on prices confirms this view. Increased Russian rail-car availability could also increase supply at a time when demand is waning. Prices over the coming months should ease, in line with our lower forecast oil price. Global demand conditions also appear to be faltering – more so in Europe than in Asia. However, ongoing infrastructure constraints in Australia, the likelihood of lower exports out of China (potentially Vietnam and South Africa), and seasonally wet weather in Indonesia, is likely slow the price decline. The switching of higher quality thermal coal into the higher priced semi-soft coal market should continue with price differentials widening further. Sharply falling freight rates are a warning sign that demand has fallen, although reports suggest that some of the weakness is due to tightened financing conditions.
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ANZ Commodity Weekly - 11 November 2008
CFTC data
y Copper longs and shorts covered on a negative global demand outlook as copper stocks continued to increase. The net short position rose 3kt to 184kt. y Gold shorts gained as a hedge against uncertainty ahead of the US elections. The net long position fell 31t to 212t, a 72-week low. y Silver longs rose and shorts covered on more positive sentiment. The net long position rose 379t to 2,723t. Open interest fell 8t to 6,302t. y Oil longs and shorts rose, with a more bearish tone. The net short position rose 2mbbls to 11mbbls, the lowest level since 6 February, 2007. Open interest rose 15mbbls to 393mbbls.
Figure 4: Weekly Non-Commercial Commitment of Traders Report
Position Unit Spot Chg 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth Copper
Long Kt 67 -9 76 66 182 316 198
Short Kt 251 -5 256 250 231 235 228
Net Long Kt -184 -3 -180 -184 -49 82 -30
Open interest Kt 318 -14 332 316 412 551 426
Gold
Long t 368 +2 366 439 599 599 724
Short t 155 +33 122 72 90 114 106
Net Long t 212 -31 244 366 509 485 618
Open interest t 523 +35 488 511 688 714 829
Silver
Long t 4,512 +186 4,327 4,729 7,286 7,586 6,877
Short t 1,790 -194 1,983 1,877 1,501 1,182 2,136
Net Long t 2,723 +379 2,343 2,852 5,785 6,404 4,742
Open interest t 6,302 -8 6,310 6,605 8,786 8,768 9,013
Oil
Long mbbl 191 +6 185 193 197 267 246
Short mbbl 202 +8 194 153 203 195 181
Net Long mbbl -11 -2 -8 40 -6 72 66
Open interest mbbl 393 +15 379 345 400 461 427
Note: for the week ending 4 November 2008 Source: Bloomberg
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ANZ Commodity Weekly - 11 November 2008
Commodity news
New South Wales raises coal royalties New South Wales, Australia's second largest coal producing state, will raise coal royalties from next year as it tries to improve its financial condition. The NSW government also said it would no longer allow coal-miners to deduct transport costs from the royalty calculation. From 1 January, royalties will rise 1.2% from current amounts. NSW’s imposition of higher coal royalties follows a decision by the QLD state government in June to raise the coal levy to 10% from 7%. The NSW government released the new measures after the global slowdown and falls in tax receipts forced it to revise its budget for the year to June 2009. Indonesia plans a coal buffer stock to meet domestic demand Indonesia, the world’s top exporter of thermal coal, reportedly plans to put in place a coal buffer stock funded by royalty payments from mining firms, according to the government. Coal for the buffer stock would be procured by revising a policy so that producers pay royalties using coal supplies. Under the current scheme, the government gets 13.5% of miners' total coal supplies. The energy minister said Indonesia may be able to get 30mt of coal for buffer stocks under the plan. Indonesian coal output is expected to rise to 240mt in 2009 from 235mt this year, according to the Indonesian Coal Mining Association. Chinese producer cuts 2009 coking coal prices Shanxi Coking Coal Group, China's largest producer of the commodity, will cut 2009 prices by around 30%, a government official said. The company will lower prices to 1,300 Yuan/t from about 1,800 Yuan/t in previous agreements. The government also plans to cut about 10% output to 700mt in Shanxi, China's biggest coal producing province, this year due to sharp falls in demand and prices. Shanxi will start to make adjustments to coal production capacity and control the amount of coal that is shipped out of the province.
India’s iron ore exports falls the fastest in October India's iron ore exports slumped at their fastest annual pace this year in October as demand from major buyer China dried up, and sales in 2008/09 could drop 45% to below 60mt, according to the government. Mines are closing and job losses are being discussed as a global slowdown in demand for iron ore amid the credit crisis and likely deep recessions in major economies hit Indian firms. Ore exports in October dropped nearly 60% YoY to 3.9mt. Falling interest for iron ore from China, which buys nearly 75% of India's normal annual exports of about 100mt, has hurt domestic miners. Rio Tinto and Fortescue cut iron ore shipments Facing a dramatic drop off in Chinese steel production, Rio Tinto will cut iron ore shipments by up to 20mt in 2008 in hopes that industrial activity in China will improve next year. Blaming China's hobbled steel sector, Rio said it was trimming its 190mt production target 10% to between 170 – 175mt, joining its bigger rival Vale, which announced a 30mt cut last month. In related news, Fortescue also announced it would bring forward maintenance work at port and processing facilities, cutting output by about 10% from 22mt. 20% Capesize vessels idle as Baltic freight rates collapse At least 20% of the vessels most commonly hired to haul coal and iron ore are sitting empty as steelmakers cut output and dwindling trade credit halts deliveries. 50-100 capesizes (the second-largest commodity transporters) have been unable to find cargoes or their owners won't accept rental rates that have plunged 98% in five months. Capesizes that were attracting rates of US$234k/day as recently as June are now available for US$5k, which is below the cost of paying for crew, insurance, maintenance and lubricants.
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ANZ Commodity Weekly - 11 November 2008
Commodity data
Spot 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth Spot 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth PRICES INVENTORIES % Change % Change BASE METALS BASE METALS London Metals Exchange (US$/t) London Metals Exchange (kt) Aluminium 1,906 (4.2) (15.1) (33.5) (33.7) (25.9) Aluminium 1,537 0.9 10.8 36.6 47.9 68.9 Copper 3,732 (9.0) (34.9) (52.2) (56.5) (48.9) Copper 255 10.5 22.3 68.6 133.7 50.6 Nickel 10,812 (9.4) (22.8) (42.3) (61.9) (66.0) Nickel 58 0.6 4.6 27.7 12.8 44.6 Zinc 1,064 (2.9) (30.4) (38.6) (52.2) (61.5) Zinc 181 (0.6) 12.3 9.7 44.3 122.8 Lead 1,351 (9.9) (16.2) (36.8) (43.8) (62.8) Lead 45 (8.1)(31.4)(51.3)(24.1) 7.7 Tin 15,065 10.4 (7.1) (26.7) (37.4) (10.2) Tin 3 (18.6) (44.8) (47.2) (60.4) (77.1) Shanghai Shanghai Copper 4,702 (4.1) (30.6) (47.3) (50.8) (52.5) Copper 25 (0.6) 52.7 (33.1) (47.0) (58.4) Aluminium 2,015 (1.4) 3.7 (26.1) (27.2) (30.5) Aluminium 204 (1.1) 7.4 5.5 12.9 110.2 Zinc 1,370 1.3 (19.6) (36.4) (49.0) (62.8) Zinc 72 (0.8) 0.9 0.9 2.4 91.3 Comex Comex Copper 3,731 (8.2) (33.5) (51.1) (56.2) (47.9) Copper 0----- Aluminium 1,992 (3.4) (13.3) (31.8) (31.4) (22.3) Aluminium 9 (20.1) (20.1) (20.1) (20.1) (49.6) PRECIOUS METALS (US$/oz) PRECIOUS METALS Gold 737 1.7 (17.0) (14.0) (16.7) (11.5) Comex Gold (A$/oz) 1,097 0.3 (11.6) 14.1 16.7 21.2 Gold (koz) 7,638 (10.8) (11.1) (9.4) (0.6) 5.4 Silver 10.1 2.1 (13.1) (34.4) (40.2) (35.0) Silver (moz) 135 3.5 (0.7) (2.4) 0.6 1.1 Platinum 855 3.8 (15.8) (45.1) (59.1) (40.4) OIL & GAS (mbbl) Palladium 225 12.8 13.1 (32.2) (49.2) (39.7) DOE Rhodium 1,550 (3.1) (55.1) (80.1) (83.2) (76.1) Crude 312 0.0 5.9 5.7 (2.5) 0.0 OIL & GAS (US$bbl) Gasoline 196 0.6 9.2 (8.2) (7.1) 0.9 WTI Cushing (US) 61.0 (10.0) (32.2) (49.1) (50.6) (36.7) Distillate 128 1.0 3.9 (2.1) 20.8 (5.6) Brent Crude (UK) 59.5 (1.1) (21.9) (47.1) (52.2) (36.2) Natural Gas (bcf) 3.4 0.4 9.5 38.4 148.4 (4.0) Tapis (Asia) 58.4 (2.9) (32.6) (53.9) (54.4) (42.5) Crude oil imports 10.0 (3.5) 10.9 (0.3) (2.4) 3.3 Dubai Fateh (Middle East) 54.9 (9.4) (30.9) (52.9) (52.2) (38.4) Refinery utilisation (%) 85.3 (0.1) 18.0 (2.2) (0.1) (1.1) Henry Hub (US$/mmbtu) 6.6 5.9 (2.2) (24.7) (40.4) (10.7) STEEL (US$/t) CFTC Spot 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth HRC US (Short ton) 790 0.0 (16.0) (29.8) (25.8) 51.9 Actual HRC Russia 710 0.0 (37.2) (37.2) (26.8) 20.9 Copper (kt) (183.2) (180.1) (183.4) (25.4) 74.4 (35.4) HRC China 575 (3.4) (30.3) (43.6) (36.8) 0.0 Gold (t) 212 244 366 567 500 629 THERMAL COAL (FOB US$/t) Silver (t) 2,723 2,343 2,852 6,196 6,618 5,300 Newcastle 104.0 3.2 (14.2) (33.4) (22.2) 24.6 Platinum (t) 10.9 11.5 9.8 5.5 12.2 14.5 Richards Bay 105.7 4.7 (20.0) (30.6) (6.7) 25.8 Palladium (t) 17.7 19.1 19.8 13.6 25.5 25.9 Qinhuangdao 129.0 (4.4) (14.0) (7.9) 41.8 61.3 Oil (mbbl) (10.5) (8.4) 40.1 (0.7) 70.3 88.6 EMISSIONS Natural Gas (mboe) (276.4) (286.3) (306.2) (206.2) (124.1) (94.1) RECs (A$) 46.1 0.0 0.7 (7.8) (12.9) 10.3 GACs (A$) 4.4 (3.3) (7.4) (36.5) (36.0) (32.0) KEY INDICES Spot 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth EUAs (€) 18.7 5.1 (19.6) (17.3) (25.8) (14.4) % Change OTHER COMMODITIES S&P 500 931 (3.9) 3.5 (28.2) (32.9) (36.0) Uranium (US$/lb) 46 2.2 (16.4) (28.7) (29.2) (50.5) CRB Index 257 (4.3) (11.4) (33.7) (39.9) (27.6) Cobalt (US$/lb) 26 (13.3) (26.8) (16.1) (46.4) (15.3) GS Comdty Index 420 (6.5) (24.1) (42.4) (45.1) (30.7) Alumina (US$/t) 265 (7.0) (26.4) (39.1) (35.4) (22.1) Rogers Int. Comdty 2,973 (5.3) (20.7) (40.1) (43.4) (32.0) Magnesium (US$/t) 3,150 (16.0) (21.7) (31.5) (40.0) (6.7) Dow Jones Comdty 128 (3.2) (10.2) (32.5) (41.0) (30.8) Molybdenum (US$/lb) 12.5 (51.9) (60.3) (63.2) (62.5) (62.4) LME Metals Index 2,055 (6.2) (16.6) (41.6) (47.8) (45.6) Iron Ore Spot (US$t) 65 (3.7) (45.6) (65.3) (65.8) (63.9) World Mining 166 (1.6) (6.0) (52.1) (65.4) (63.1) Coke (US$/t) 420 (16.0) (33.3) (41.3) (23.6) 27.3 FREIGHT LEAD INDICATORS Spot 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth Baltic Freight Rate Real Time (2.6) (71.6) (89.0) (91.8) (92.2) % Change Baltic Capesize Real Time (11.5) (73.8) (90.2) (92.8) (92.4) US LI 101 --- 0.3 (1.3) (1.3) (3.0) Baltic Panamax Real Time 23.5 (63.8) (87.8) (91.4) (92.5) Euro LI 80 --- (8.1) (10.2) (17.2) (23.7) Baltic Supramax Real Time (9.1) (75.1) (88.3) (90.6) (92.2) China LI 100 --- (0.7) (1.9) (3.0) (4.0) Baltic Handysize Real Time (10.0) (72.7) (87.8) (90.1) (90.5) US IP 108 --- (2.5) (3.9) (4.2) (4.9) COMMODITY CURRENCIES Euro IP 109 --- 0.0 (0.4) (1.4) (0.9) EUR/USD - Euro 1.280 0.4 (5.7) (15.3) (17.2) (13.0) China IP 794 --- 4.4 7.9 12.4 20.4 USD/JPY - Yen 99.0 0.3 0.0 10.9 5.0 11.2 US ISM Manuf. 39 --- (10.6) (22.2) (20.0) (22.8) AUD/USD - Aussie 0.6716 1.4 (6.1) (24.6) (28.6) (27.0) US Housing Starts 817 --- (6.3) (25.0) (17.3) (31.1) USD/CAD - Canadian 1.193 1.5 (1.8) (9.5) (14.6) (19.0) US Retail Sales 375 --- (1.2) (2.2) (1.2) (1.0) USD/ZAR - Rand 10.100 (1.3) (5.4) (22.3) (22.5) (32.2) Japan Machine Orders (B¥) 113.5 --- 1.6 (11.6) (20.0) (20.1) USD/RMB - Yuan 6.825 0.2 0.2 0.5 2.4 8.6 China Steel Output (Mt/m) 39.6 --- (6.9) (15.6) (11.7) (7.3) NZD/USD - Kiwi 0.5896 1.6 (6.3) (16.0) (23.5) (23.5) China Copper Imports (Kt/m) 116.2 --- 27.3 44.3 (11.6) 7.5
Note: closing prices at 7 November, 2008. Sources: Bloomberg, globalCOAL, AFMA
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ANZ Commodity Weekly - 11 November 2008
Company share prices
COMPANY Curr Spot 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth COMPANY Curr Spot 1 Wk 1 Mth 3 Mth 6 Mth 12 Mth % Change % Change DIVERSIFIED PRECIOUS METALS Anglo America GBP 13.50 (11.9) (12.0) (49.9) (60.1) (61.3) Anglogold Ashanti ZAR 184 (2.4) 12.8 (19.7) (35.1) (37.0) Aneka Tambang IDR 11.30 8.7 7.6 (46.2) (69.5) (74.7) Aquarius Platinum AUD 3.37 18.2 (13.1) (66.0) (80.9) (74.7) BHP Billiton AUD 27.93 (2.3) 0.7 (24.8) (39.9) (34.2) Austindo AUD 0.02 0.0 (41.2) (67.2) (94.3) (96.2) CVRD BRL 24.30 (4.3) (1.0) (32.9) (55.3) (54.4) Barrick USD 23.96 5.4 (31.5) (31.9) (39.2) (47.3) Ivanhoe Mines USD 2.59 (3.0) (27.9) (75.4) (71.6) (81.9) Dominion Mining AUD 2.45 11.4 (5.4) 15.0 (42.2) (61.4) Lonmin GBP 10.91 (4.9) (32.1) (68.1) (67.8) (66.6) Harmony ZAR 6,800 (7.7) (21.8) 4.6 (28.8) (6.8) Mitsui Mining JPY 181 (8.6) 8.4 (41.4) (48.4) (63.2) Highlands Pacific AUD 0.05 (8.6) (5.4) (33.8) (59.2) (66.9) Mitsubishi Corp JPY 1,527 (15.4) (11.2) (49.4) (57.0) (54.0) Kingsgate Consol AUD 3.25 32.1 (17.5) (39.1) (40.1) (37.3) Norilsk Nickel USD 99 15.1 62.3 (47.9) (64.2) (68.0) Kinross CAD 15.09 20.2 (16.2) (9.3) (24.9) (14.8) Outokumpu EUR 7.53 (7.0) (11.1) (52.6) (75.4) (69.4) Lihir Gold AUD 2.07 1.0 (16.9) (14.1) (33.0) (51.5) Rio Tinto AUD 72.27 (6.5) (1.0) (37.7) (50.7) (44.8) Newcrest AUD 21.69 5.7 (15.4) (17.8) (29.5) (39.5) Sumitomo MM JPY 725 (5.2) (7.5) (43.0) (60.7) (69.9) Newmont USD 26.02 (1.2) (23.5) (40.3) (43.1) (51.9) Teck Cominco CAD 11.28 (6.0) (40.9) (72.6) (76.5) (74.7) OceanaGold AUD 0.35 32.1 16.7 (40.7) (84.4) - Xstrata GBP 10.68 1.2 (23.0) (64.3) (74.5) (69.3) Sino Gold AUD 3.17 (13.2) (30.8) (30.8) (31.7) (54.1) COAL Tanami Gold AUD 0.01 0.0 (14.3) (77.8) (85.4) (90.8) Arch Coal USD 18.03 (15.8) (20.0) (63.0) (72.4) (52.7) Tribune Resources AUD 1.20 0.0 35.6 (7.3) (25.0) (44.2) Centennial AUD 3.16 (5.4) 0.0 (32.5) (33.9) 16.5 Troy Resources AUD 0.99 (4.8) (7.5) (36.5) (58.2) (69.5) China Shenhua HKD 14.26 1.9 4.9 (42.7) (56.9) (69.2) ALUMINIUM Coal & Allied AUD 96.50 1.6 7.2 (8.1) (3.5) 28.0 Alcoa USD 11.19 (2.7) (10.2) (64.8) (71.3) (69.8) Consol Energy USD 27.74 (11.6) (16.2) (55.9) (69.6) (50.4) Alumina Ltd AUD 2.23 2.8 (10.1) (50.6) (62.1) (64.8) Felix Resources AUD 11.33 6.3 25.9 (41.7) (28.3) 45.1 Aluminium Corp HKD 2.90 1.8 (11.9) (55.3) (76.7) (84.0) MacArthur Coal AUD 6.13 (1.3) 5.7 (56.2) (63.9) (23.3) Capral AUD 0.10 (16.5) (31.4) (52.0) (70.9) (75.4) Massey Energy USD 19.20 (16.8) (12.2) (67.5) (67.4) (39.2) Hindalco INR 60.30 (0.3) (25.4) (54.1) (61.7) (67.2) New Hope Coal AUD 3.30 (2.9) 0.6 (25.2) (17.5) 42.2 COPPER Peabody USD 29.28 (15.2) (1.0) (50.0) (57.3) (47.6) Antofagasta GBP 372 (2.0) 12.0 (30.8) (52.0) (48.7) Yanzhou Coal HKD 3.98 (16.2) (23.5) (68.5) (73.3) (71.9) Cudeco AUD 1.42 10.9 1.4 (43.9) (67.4) (64.2) IRON ORE & STEEL Freeport USD 27.07 (6.8) (29.5) (68.3) (76.3) (75.3) BlueScope Steel AUD 4.29 (2.3) (24.1) (58.5) (61.0) (54.7) GrupoMexico MXN 9.50 (13.2) 19.5 (41.5) (63.3) (63.1) Baoshan Iron CNY 4.58 0.2 (20.8) (35.1) (66.8) (69.1) Havilah Resources AUD 0.40 8.1 2.6 (59.0) (74.2) (78.8) China Steel TWD 23.45 (2.5) (18.6) (41.4) (51.5) (45.0) Jabiru Metals AUD 0.18 29.6 25.0 (48.5) (78.1) (88.3) Fortescue Metals AUD 2.60 (17.2) (3.0) (66.8) (71.7) (48.6) OZ Minerals AUD 0.95 (8.7) (6.9) (48.5) (72.8) (77.9) JFE Holdings JPY 2,375 (7.8) 12.0 (48.3) (57.1) (61.1) Pan Australian AUD 0.23 (8.0) (23.3) (66.9) (80.8) (78.5) Kumba Iron Ore ZAR 128.00 0.0 (8.6) (44.8) (61.5) (53.0) Straits Resources AUD 1.45 22.9 38.1 (71.6) (80.2) (78.3) Mt Gibson Iron AUD 0.38 (6.2) (46.5) (82.2) (88.6) (85.9) NICKEL Murchison Metals AUD 0.71 (22.0) 1.4 (74.3) (83.5) (85.3) Eramet EUR 141 (10.3) (33.3) (61.9) (78.0) (55.6) Nippon Steel JPY 303 (9.6) 3.1 (43.7) (50.2) (55.4) Independence AUD 1.64 28.1 0.0 (44.4) (79.3) (78.4) Nucor Corp USD 34.79 (14.1) 16.9 (32.6) (55.6) (36.5) Minara Resources AUD 0.62 104.1 42.4 (34.2) (81.9) (82.7) Portman AUD 21.20 (1.4) 1.0 16.5 28.5 109.3 Mincor Resources AUD 0.84 21.9 (4.6) (51.2) (77.4) (82.4) POSCO KRW 331,000 (8.6) (7.5) (32.9) (38.6) (43.5) Mirabela Nickel AUD 1.70 5.6 (9.1) (65.3) (76.2) (71.0) Territory Resources AUD 0.22 (12.0) 18.9 (54.6) (78.4) (85.9) Norilsk Nickel USD 99 15.1 62.3 (47.9) (64.2) (68.0) OIL & GAS Panoramic ResourcesAUD 1.20 32.6 20.0 (47.8) (78.1) (79.0) AWE AUD 2.60 7.4 36.8 (21.7) (35.8) (12.8) PT Inco IDR 1,970 16.6 (12.4) (51.7) (69.5) (81.4) BP GBP 5.15 1.5 25.8 (0.9) (16.0) (14.0) Western Areas AUD 4.00 2.0 6.1 (44.4) (61.7) (32.2) Caltex AUD 9.98 9.7 0.6 (17.9) (21.0) (51.0) LEAD & ZINC CNOOC HKD 5.95 (5.6) 0.8 (43.7) (57.7) (57.5) AIM Resources AUD 0.02 83.3 57.1 (21.4) (73.8) (90.2) ENI EUR 17.80 (4.0) 19.7 (15.6) (30.0) (25.6) Boliden CAD 2.72 0.0 (32.0) (55.4) (76.3) (81.8) Exxon Mobil USD 73.95 (0.2) 8.8 (6.1) (16.7) (14.9) CBH Resources AUD 0.05 2.0 (20.0) (58.4) (84.7) (90.8) Horizon Oil AUD 0.16 0.0 (23.8) (50.8) (51.5) (59.0) Herald Resources AUD 1.00 (3.4) (2.9) (47.6) (65.3) (36.7) Imperial Oil AUD 38.71 (9.2) 19.6 (19.9) (33.8) (26.5) Ivernia CAD 0.06 (31.3) (72.5) (91.5) (96.2) (96.0) Oilex AUD 0.65 19.4 57.3 (25.9) (41.9) (63.6) Kagara Zinc AUD 0.64 9.4 (60.5) (78.3) (87.9) (89.7) Oil Search AUD 4.60 7.0 35.3 (12.4) (19.9) (0.6) Korea Zinc KRW 68,500 8.0 1.0 (50.5) (50.5) (57.2) Origin Energy AUD 17.07 8.7 23.7 5.7 17.2 86.4 Perilya AUD 0.20 29.0 (2.4) (55.6) (79.8) (94.4) PetroChina HKD 5.72 0.4 (4.7) (43.6) (47.8) (64.6) INDUSTRIAL MINERALS & DIAMONDS Queensland Gas AUD 5.75 0.0 144.7 33.4 5.5 96.9 Aber Diamond CAD 10.51 (10.6) (1.5) (47.5) (65.3) (73.8) ROC Oil AUD 0.71 16.4 15.4 (42.0) (68.6) (76.8) Aus.Magnesium AUD 0.03 28.6 (3.6) (46.0) (38.6) (82.0) Royal Dutch Shell GBP 16.93 2.0 19.9 (0.7) (16.2) (14.6) Blina Diamonds AUD 0.02 (52.5) (55.8) (78.9) (78.7) (90.5) Santos AUD 13.81 (1.0) 11.9 (19.8) (23.9) (0.1) Consolidated Rutile AUD 0.33 4.8 (1.5) (15.6) (19.8) (39.3) Sinopec HKD 4.55 (9.5) (5.4) (45.2) (40.2) (58.4) Industrial Minerals AUD 0.25 13.6 (28.6) (3.8) (27.5) (35.9) Tap Oil AUD 0.64 13.4 6.7 (55.9) (67.1) (73.0) Iluka Resources AUD 3.85 4.1 12.6 (18.9) 0.8 5.5 Tokyo Gas JPY 428 1.2 25.1 (5.5) 7.5 (13.7) Lynas Corp AUD 0.42 38.3 18.6 (66.0) (70.8) (64.2) Woodside Petroleum AUD 39.80 (7.8) 7.0 (22.7) (33.0) (28.1) Tahera Diam CAD 0.01 0.0 0.0 (66.7) (77.8) (95.2)
Note: closing prices at 7 November, 2008. AUD – Australian Dollar, BRL – Brazilian Real, CAD – Canadian Dollar, CNY – Chinese Yuan, EUR – Euro, GBP – British Pound, HKD – Hong Kong dollar, IDR – Indonesian Rupiah, INR – Indian Rupee, JPY – Japanese Yen, KRW – Korean Won, MXN – Mexican Peso, TWD – Taiwan dollar, USD – US Dollar, South African Rand – ZAR. Source: Bloomberg
Page 7
ANZ Commodity Weekly - 11 November 2008
Forward Curves
(US$/t) ALUMINIUM (US$/t) COPPER (US$/t) NICKEL 3,400 8,000 22,000
7,500 3,200 20,000 7,000 3,000 18,000 6,500 2,800 6,000 16,000 2,600 5,500 14,000 2,400 5,000 12,000 2,200 4,500 10,000 2,000 4,000
1,800 3,500 8,000 1M3M 6M 1Y 2Y 3Y 1M 3M 6M 1Y 2Y 3Y 1M 3M 6M 1Y 2Y
Current Last week Last quarter Current Last week Last quarter Current Last week Last quarter
(US$/t) (US$/t) ZINC (US$/t) LEAD NEWCASTLE THERMAL COAL 2,100 2,200 170 2,000 160
1,900 2,000 150 1,800 140 1,700 1,800 130 1,600 120 1,500 1,600 110 1,400 100 1,300 90 1,200 1,400 1,100 80
1,000 1,200 70 1M 3M 6M 1Y 2Y 1M 3M 6M 1Y 1M 6M 1Y 2Y 3Y
Current Last week Last quarter Current Last week Last quarter Current Last week Last quarter
(US$/oz) GOLD (US$/oz) SILVER (US$/bb OIL 1,000 20.00 140
130 950 18.00 120 900 16.00 110
850 14.00 100
800 12.00 90 80 750 10.00 70 700 8.00 60
650 6.00 50 1M3M 6M 1Y 2Y 3Y 1M 3M 6M 1Y 2Y 3Y 1M 3M 6M 1Y 2Y
Current Last week Last quarter Current Last week Last quarter Current Last week Last quarter
(A$) RENEWABLE ENERGY CERTIFICATES (€) EUROPEAN UNION ALLOWANCES (A$/US$) AUSTRALIAN DOLLAR 68 26 1.00
64 0.95 24 0.90 60 0.85 22 56 0.80
52 0.75 20 0.70 48 18 0.65 44 0.60
40 16 0.55 1M 3M 6M 1Y 2Y 3Y 1M 3M 6M 1Y 2Y 3Y 1M3M 6M 1Y 2Y 3Y
Current Last week Last quarter Current Last week Last quarter Current Last week Last quarter
Note: forward curves at 7 November, 2008…Sources: Bloomberg, TFS Energy, AFMA
Page 8
ANZ Commodity Weekly - 11 November 2008
Moving Averages
(US$/t) ALUMINIUM (US$/t) COPPER (US$/t) NICKEL 3,500 10,000 61,500
3,300 9,000 51,500 3,100 8,000 2,900 7,000 41,500 2,700 6,000 2,500 31,500 2,300 5,000 21,500 2,100 4,000 1,900 3,000 11,500 1,700 2,000 1,500 Nov- May- Nov- May- Nov- May- Nov- 1,500 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 05 06 06 07 07 08 08 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08
Spot price 50-day moving average Spot price 50-day moving average Spot price 50-day moving average 200-day moving average 200-day moving average 200-day moving average
(US$/t) ZINC (US$/t) LEAD (US$/t) NEWCASTLE THERMAL COAL 5,000 4,500 210
190 4,500 4,000 4,000 170 3,500 150 3,500 3,000 130 3,000 2,500 110 2,500 2,000 90 2,000 70 1,500 1,500 50 1,000 1,000 30 500 500 Nov- May- Nov- May- Nov- May- Nov- Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 05 06 06 07 07 08 08
Spot price 50-day moving average Spot price 50-day moving average Spot price 50-day moving average 200-day moving average 200-day moving average 200-day moving average
(US$/oz) GOLD (US$/oz) SILVER (US$/bbl) OIL 1,050 23 150
950 21 130 19 850 17 110 750 15 90 650 13 70 550 11
9 450 50 7 350 30 Nov- May- Nov- May- Nov- May- Nov- 5 Nov- May- Nov- May- Nov- May- Nov- 05 06 06 07 07 08 08 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 05 06 06 07 07 08 08
Spot price 50-day moving average Spot price 50-day moving average Spot price 50-day moving average 200-day moving average 200-day moving average 200-day moving average
(A$) RENEWABLE ENERGY CERTIFICATES (€) EUROPEAN UNION (US$) AUSTRALIAN DOLLAR 60 32 1.00 55 0.95 50 28 0.90 45 0.85 40 24 35 0.80
30 20 0.75
25 0.70
20 16 0.65 15 0.60 10 12 Nov- May- Nov- May- Nov- May- Nov- Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 05 06 06 07 07 08 08
Spot price 50-day moving average Spot price 50-day moving average Spot price 50-day moving average 200-day moving average 200-day moving average 200-day moving average
Note: closing prices at 7 November, 2008. Sources: Bloomberg, globalCOAL, AFMA
Page 9
ANZ Commodity Weekly - 11 November 2008
Events Calendar Week Beginning 10 November
Date Country Data/Event ANZ Mkt. Last Time (GMT)
10 Nov JP Machine Orders (Sep) nf 5.0% -14.5% 23:50
JP Machine Tool Orders (Oct P) - yoy nf na -20.1% 06:00
CH PPI (Oct) - yoy nf 8.0% 9.1% 02:00
EU Sentix Investor Confidence (Dec) nf -33.0 -27.8 09:30
EU ECB Governor Trichet speaks - - - 14:30
11 Nov JP Current Account (Sep) nf ¥1400.0B ¥988.8B 23:50
JP Trade Balance (Sep) nf ¥236.3B -¥236.0B 23:50
EU ZEW Economic Sentiment Survey (Nov) nf -60.5 -62.7 10:00
GE ZEW Economic Sentiment Survey (Nov) nf -63.0 -63.0 10:00
11-14 Nov CH Trade Balance (Oct) - USD nf $30.0B $29.30B -
12 Nov JP Consumer Confidence – Households (Oct) nf 30.1 31.4 05:00
CH Retail Sales (Oct) - yoy nf 22.0% 23.2% 02:00
EU Euro-Zone Industrial Production (Sep) nf -1.5% 1.1% 10:00
13 Nov CH Industrial Production (Oct) nf 11.2% 11.4% 02:00
JP Domestic CGPI (Oct) nf -0.9% -0.4% 23:50
JP Industrial Production (Sep F) nf na 1.2% 04:30
GE GDP (Q3 P) nf -0.2% -0.5% 07:00
US Trade Balance (Sep) nf -$57.0B -$59.1B 13:30
14 Nov CH Fixed Asset Investments (Oct) – yoy nf 27.5% 27.6% 02:00
EU Euro-Zone CPI (Oct) nf 0.1% 0.2% 10:00
EU Euro-Zone GDP (Q3 A) nf -0.1% -0.2% 10:00
EU ECB President Trichet speaks - - - 08:00
GE CPI (Oct F) nf -0.2% -0.2% 07:00
US Import Price Index (Oct) nf -4.4% -3.0% 13:30
US Retail Sales (Oct) nf -2.1% -1.2% 13:30
US - less autos nf -1.2% -0.6% 13:30
US Fed Chairman Bernanke and ECB Trichet to speak - - - 13:30
US University of Michigan Confidence (Nov P) nf 56.3 57.6 15:00
15-16 Nov G20 Heads of State meeting in Washington - - - -
Key: AU: Australia, CH: China, EU: European Union, GE: Germany, JP: Japan, US: United States. Sources: Dow Jones, Reuters, Bloomberg, ANZ. All $ values in local currency. na= not available, nf= no ANZ forecasts. (Note: all surveys are preliminary and subject to change).
Page 10
ANZ Commodity Weekly - 11 November 2008
ANZ Commodity Price Forecasts
Unit Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10
BASE METALS
Aluminium US$/lb 1.39 1.08 1.01 0.94 0.90 0.91 0.93 0.95 0.97 0.98
Copper US$/lb 3.94 2.90 2.55 2.35 2.20 2.25 2.35 2.40 2.50 2.50
Nickel US$/lb 9.89 7.08 6.20 5.80 5.90 6.30 6.75 7.00 7.10 7.20
Zinc US$/lb 0.86 0.75 0.69 0.68 0.70 0.74 0.78 0.82 0.86 0.90
Lead US$/lb 0.80 0.82 0.75 0.72 0.72 0.74 0.78 0.82 0.84 0.84
Tin US$/lb 10.63 7.83 7.60 7.50 7.60 7.50 7.40 7.30 7.20 7.05
Aluminium US$/t 3,070 2,380 2,230 2,070 1,980 2,010 2,050 2,090 2,140 2,160
Copper US$/t 8,690 6,390 5,620 5,180 4,850 4,960 5,180 5,290 5,510 5,510
Nickel US$/t 21,790 15,600 13,670 12,790 13,010 13,890 14,880 15,430 15,650 15,870
Zinc US$/t 1,900 1,650 1,520 1,500 1,540 1,630 1,720 1,810 1,900 1,980
Lead US$/t 1,760 1,810 1,650 1,590 1,590 1,630 1,720 1,810 1,850 1,850
Tin US$/t 23,430 17,270 16,750 16,530 16,750 16,530 16,310 16,090 15,870 15,540
PRECIOUS METALS
Gold US$/oz 925 871 800 750 730 740 760 780 800 820
Platinum US$/oz 2069 1011 960 880 800 820 850 850 900 930
Palladium US$/oz 463 200 200 220 210 220 235 245 265 280
Silver US$/oz 17.41 12.03 11.50 10.80 10.60 10.90 11.20 11.65 11.95 12.20
ENERGY
WTI NYMEX US$/bbl 140.0 100.6 82.0 78.0 75.0 75.0 77.0 80.0 82.0 85.0
Brent IPE US$/bbl 139.3 97.4 79.0 75.5 72.5 73.0 75.0 78.0 80.0 83.0
Uranium US$/lb 57.0 60.0 50.0 45.0 45.0 50.0 55.0 60.0 62.0 65.0
ANNUAL BULKS1
Thermal coal US$/t 125.0 125.0 125.0 125.0 100.0 100.0 100.0 100.0 100.0 100.0
Premium hard coking US$/t 305.0 305.0 305.0 305.0 230.0 230.0 230.0 230.0 190.0 190.0
Hard coking US$/t 270.0 270.0 270.0 270.0 170.0 170.0 170.0 170.0 155.0 155.0
Semi-soft coking coal US$/t 240.0 240.0 240.0 240.0 150.0 150.0 150.0 150.0 135.0 135.0
Iron ore lump US$/dltu 201.7 201.7 201.7 201.7 161.4 161.4 161.4 161.4 161.4 161.4
Iron ore fines US$/dltu 144.7 144.7 144.7 144.7 115.7 115.7 115.7 115.7 115.7 115.7
Thermal coal % YoY 125 - - - (20) - - - 0 -
Premium hard coking % YoY 211 - - - (25) - - - (17) -
Hard coking % YoY 218 - - - (37) - - - (9) -
Semi-soft coking coal % YoY 269 - - - (38) - - - (10) -
Iron ore lump % YoY 97 - - - (20) - - - 0 -
Iron ore fines % YoY 80 - - - (20) - - - 0 -
OTHER
Alumina US$/t 435 360 323 300 288 281 287 293 293 293
Molybdenum US$/lb 33.5 32.2 30.0 26.0 25.0 24.0 23.0 23.0 23.0 23.0
Cobalt US$/lb 42.8 36.8 32.0 30.0 29.0 28.0 27.0 26.0 26.0 26.0
EXCHANGE RATES
AUD/USD US$ 0.96 0.79 0.80 0.75 0.73 0.70 0.68 0.66 0.63 0.61
NZD/USD US$ 0.76 0.67 0.65 0.68 0.65 0.63 0.61 0.59 0.58 0.58
EUR/USD US$ 1.58 1.41 1.38 1.36 1.33 1.30 1.26 1.23 1.18 1.16
USD/JPY ¥ 106.2 106.1 106.0 108.0 110.0 112.0 114.0 115.0 118.0 115.0
USD/CAD C$ 1.02 1.06 1.08 1.10 1.15 1.17 1.20 1.20 1.22 1.24
1 - Annual contract prices for year starting April 1 – *Downward revisions to be made later this week. Source: ANZ
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ANZ Commodity Weekly - 11 November 2008
ANZ Contacts
ANZ Commodity Research Mark Pervan Doug Whitehead Natalie Robertson Head of Commodity Research Agricultural Strategist Commodity Research Analyst Metals/Energy Strategist +61 3 9273 3716 +61 3 9273 6684 +61 3 9273 3716 [email protected] [email protected] [email protected]
ANZ Commodity Sales
Geoff Clear Paul Thomas Katharine Tapley David Jordan Executive Director Head of Metals & Energy Head of Inventory Finance Precious/Energy/Base Sales +65 6539 6037 +61 3 9095 0101 +61 3 9095 0101 +61 3 9095 0101 [email protected] [email protected] [email protected] [email protected]
Chris Lambourn Peter Hillyard Astarini Suyono Francisca Araneda Precious/Coal/Base Sales Commodity Sales – Europe & Electricity/Emissions Sales Inventory Finance America +61 3 9095 0101 +1 212 801 9173 +61 3 9095 0014 +61 3 9095 0101 [email protected] [email protected] [email protected] [email protected]
ANZ Commodity Trading
Christophe Renaud Cedric Bernadac Simon Roberts Andrew Zhao Executive Director Head of Metals Trading Head of Agriculture Trading Metals Trading +61 2 9227 1930 +61 2 9227 1930 +61 2 9226 1753 +61 2 9226 6825 [email protected] [email protected] [email protected] [email protected]
Andrew Arthur Matthew Jones Frank Howard Alan Tang Physical Coal Trading Energy Trading Agriculture Trading Commodities Trading +61 2 9227 1930 +61 2 9227 1930 +44 20 3229 2039 +61 2 9226 1753 [email protected] [email protected] [email protected] [email protected]
ANZ Investor Products
John Rusjan John Buckland Head of Structured Products Quantitative Structurer (Asia) +65 6419 9377 +65 6539 8003 [email protected] [email protected]
Natural Resources Group (NRG) Andrew Wright Scott Merrillees Jonathan Bloch Paul Jackson Head of Natural Resources Head of Natural Resources Head of Natural Resources Executive Director, Victoria & South East Asia Western Australia South Australia +61 3 9273 1769 +62 21 575 0315 +61 8 9323 8417 +61 3 9273 3093 [email protected] [email protected] [email protected] [email protected]
Aaron Ross Executive Director, New South Wales +61 2 9227 1390 [email protected]
ANZ Economics & Market Research Warren Hogan Amy Auster Tony Pearson Paul Braddick Head of Australia Macro Head of FX/International Macro Head of Industry & Strategy Head of Property +61 2 9227 1562 +61 3 9273 5417 +61 3 9273 5083 +61 3 9273 5987 [email protected] [email protected] [email protected] [email protected]
Page 12
ANZ Commodity Weekly - 11 November 2008
Important Notice Australia and New Zealand Banking Group Limited is represented in: AUSTRALIA by: Australia and New Zealand Banking Group Limited ABN 11 005 357 522 10th Floor 100 Queen Street, Melbourne 3000, Australia Telephone +61 3 9273 6224 Fax +61 3 9273 5711
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