ANZ Commodity Daily 598 040412

8/2/2019 ANZ Commodity Daily 598 040412

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ANZ RESEARCH

COMMODITY DAILY Contacts: Mark Pervan +613 9273 3716 | [email protected]

Natalie Robertson +613 9273 3415 | [email protected]

MARKET HI GHLI GHTS OVERNI GHT WRAP

• Oi l fe l l a f te r US FOMC Minut es reduced QE3 ex pec ta t ion s

• Gold dec l ined on reduced QE3 pr ospec ts & f i rm er USD

• Base m e t a l s m ixed , coppe r dow n , bu t o u t l ook pos i t i ve

• Coa l down , desp i t e news o f ~$1 15 / t annua l se t t l em en t

OVERNI GHT RANKED PRI CE MOVES (% )

(1.9)

(1.0)

(1.0)

(1.0)

(0.8)

(0.5)

(0.4)

(0.4)

(0.3)

(0.3)

0.4

0.7

1.0

1.3

(2.5) (2.0) (1.5) (1.0) (0.5) 0.0 0.5 1.0 1.5

Gold

Silver

WTI Oil

Tin

Co al (NEWC)

Platinum

Copper

S&P 500

Baltic F reight

Aluminium

Lead

USD (DXY)

Zinc

Nickel

WEEK-TO-DATE RANKED PRICE MOVES ( % )

(3.3)

(3.1)

(2.1)

(0.7)

(0.1)

0.1

0.1

0.4

0.9

1.5

1.8

2.0

3.8

4.3

(5.0) (3.0) (1.0) 1.0 3.0 5.0

Aluminium

WTI Oil

Gold

Platinum

Zinc

S&P 500

Silver

USD (DXY)

Copper

Baltic F reight

Co al (NEWC)

Tin

Nickel

Lead

Sources: Bloomberg, ANZ Commodity Strategy

Overn igh t Them es – Commodity markets were steady ahead

of the US FOMC Minutes, but fell after the release. After a week

of Bernanke highlighting the risks to US growth and hope for

further stimulus was reignited, it seems that there is little

support for QE3, unless conditions in the economy are to

significantly deteriorate. Several members continued to

anticipate that the unemployment rate would still be well above

their estimates of its longer-term normal level, and inflation

would be at or below the Committee's longer-run objective, in

late 2014. The market appeared to be disappointed and the

stronger US dollar also pressured. Gold and silver were the

worst performers, while oil and base metals continued to be

supported by a tighter supply context.

Crude benchmarks dec l ined , but WTI was under greater

pressure after the EIA released bearish US demand readings

and after the FOMC minutes implied reduced prospects of QE3.

The EIA said total crude demand in January was nearly 4.5%

below last year’s levels to 18.27mbbls/day. Still, crude markets

are being influenced more by supply-side disruptions, especially

Brent, with ongoing reports of crude oil loading delays in the

North Sea and tighter supplies from Iran. The Brent/WTI

spread widened further to US$21/bbl.

Gold f el l 1 . 9% a round US$1 , 646 / oz, on market

disappointment over reduced prospects of QE3 in the US and a

firmer US dollar. Physical gold interest was also quiet – Indian

buyers kept out of the market as the Rupee weakened further.

Base m e t a l s w e re m ixed aga in , with copper down mildly as

disappointment after the US FOMC minutes offset the positive

US manufacturing and factory orders data over the last couple

of days. Positively, Chile’s central bank increased its forecast

for this year’s average copper price to US$3.7/lb, which is still

lower than our average forecasts of US$3.88/lb for 2012 –

although there still appears to be mixed views over the

strength of copper consumption in China.

Newcas t l e coa l f u t u res f e l l t o US$109 / t , despite reports

earlier in the week suggesting the JPY annual contract between

Xstrata and Tohuko Electric Power was settled around

US$115/t. Activity still appears to be quiet, with Chinese

buyers on a 3-day holiday and Indian buyers sitting on the

sidelines. Perhaps market participants are waiting for China’s

response when they re-enter the market tomorrow. Coking coal

markets appear to be supported by BMA’s force majeure

announcement on Monday – although weak demand conditions

continue to pressure prices.

Apr i l 4 , 2012



COMMODITY DATA

Close 1 Day 1 W k 1 Mt h 3 Mt h Close 1 Day 1 W k 1 Mt h 3 Mt h

LME BASE METALS (US$/t) LME BASE METALS (kt)

Aluminium 2,084 (0.3) (3.3) (4.9) (2.5) Aluminium 5,071 (0.1) (0.1) (0.3) 2.1

Copper 8,639 (0.4) 0.9 4.3 11.7 Copper 261 1.2 1.2 (8.1) (28.7)

Nickel 18,381 1.3 3.8 (1.4) (5.7) Nickel 101 0.0 1.3 2.3 8.6

Zinc 2,023 1.0 (0.1) 1.6 5.3 Zinc 896 (0.1) 0.8 3.3 9.2

Lead 2,068 0.4 4.3 1.5 5.1 Lead 376 (0.1) (0.2) 3.4 6.3

Tin 22,959 (1.0) 2.0 3.1 13.6 Tin 13 1.5 3.7 17.4 17.9

PRECI OUS METALS (US$/oz) Close 1 Day 1 W k 1 Mt h 3 Mt h

Gold 1,646 (1.9) (2.1) (1.7) 0.8

Gold (A$/oz) 1,589 (1.2) (0.9) (0.0) 0.4 S&P 500 1,413 (0.4) 0.1 5.2 9.4

Silver 32.6 (1.0) 0.1 (1.0) 8.9 VIX Volatility Index 16 0.1 0.4 (25.0) (24.3)

Platinum 1,642 (0.5) (0.7) 1.7 12.1 CRB Index 311 (0.5) (1.5) (1.2) (1.5)

Palladium 654 (0.3) (0.8) (2.0) 3.2 LME Metals Index 3,638 (0.1) 0.4 1.4 6.5

ENERGY (US$/bbl) Close 1 Day 1 W k 1 Mt h 3 Mt h

WTI Oil* 104 (1.0) (3.1) (0.7) 1.7

Brent Oil* 125 (0.4) (0.5) 2.4 10.2 Baltic Freight Rate 931 (0.3) 1.5 18.3 (26.0)

Sing Gasoil 0.5% 137 0.0 (0.5) 1.5 4.9 Baltic Capesize 1,456 2.0 7.5 (4.0) (31.2)

Sing Fuel Oil 180cst (US$/t) 750 0.0 (0.8) (0.2) 3.2 Baltic Panamax 1,049 (0.2) 1.4 23.1 (27.9)

OTHER (US$/t) Baltic Handysize 556 (1.1) (1.4) 24.1 0.7

China HR Coil (RmB/t) 4,376 0.0 0.3 1.9 3.7 Close 1 Day 1 W k 1 Mt h 3 Mt h

Richards Bay Coal API4 103 (0.8) 0.3 0.0 (1.8)

Newcastle Coal*** 109 (0.8) 1.8 (0.4) (3.6) DXY - USD Index 79.4 0.7 0.4 (0.6) (1.8)

Australia Coking Coal** 208 … (0.4) (4.1) (9.6) AUD/USD - Aussie 1.036 (0.7) (1.2) (1.7) 0.4

Iron Ore Spot 148 0.0 0.3 3.2 3.7 NZD/USD - Kiwi 0.823 (0.2) 0.1 1.5 3.7

Com m od i t ies I n ven t or ies% Chang e % Ch ange

% Ch a n g eCurrenc ies

% Ch a n g eK ey Ind ices

% Ch a n g eFre igh t

105

110

115

120

125

130

Apr Jun A ug Oct Dec Feb

NEWCASTLE COALUS$/t

1,300

1,400

1,500

1,600

1,7001,800

1,900

2,000

Apr Jun Aug Oct Dec Feb

GOLDUS$/oz

70

80

90

100

110

120

Apr Jun Aug Oct Dec Feb A pr

W T I OI LUS$/bbl

0.94

0.97

1.00

1.03

1.06

1.09

1.12

A pr Jun Aug Oct Dec Feb

A UDA$

16,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000

A pr Jun A ug Oct Dec Feb

NI CKELUS$/t

6,500

7,500

8,500

9,500

10,500


COPPERUS$/t

1,900

2,100

2,300

2,500

2,700

2,900


A L UM I N I U MUS$/t

1,600

1,800

2,000

2,200

2,400

2,600


Z I N CUS$/tUS$/t

25.0

30.0

35.0

40.0

45.0

50.0


SI LVERUS$/oz

Notes: * Front-month futures ** Weekly prices ***Newcastle ICE coal futures contract

Sources: Bloomberg, McCloskey, ANZ Commodity Strategy



ANZ FORECASTS

ANZ For ecast Table 1

COMMODI TY Un i t Ju n - 11 Sep -11 Dec- 11 Mar - 12 Ju n - 12 Sep - 12 Dec- 12 Mar - 13 Ju n -1 3 Sep - 13 Dec- 13

BASE METALS

Aluminium US$/lb 1.18 1.09 0.95 0.96 1.01 1.02 1.05 1.06 1.05 1.05 1.06

Copper US$/lb 4.16 4.07 3.41 3.62 3.85 3.98 4.08 4.08 4.13 4.15 3.95

Nickel US$/lb 11.05 9.98 8.34 8.70 9.15 9.70 10.15 10.25 10.40 10.45 10.15

Zinc US$/lb 1.02 1.01 0.86 0.87 0.90 0.91 0.95 0.98 1.01 1.03 1.04

Lead US$/lb 1.16 1.11 0.90 0.94 0.96 0.96 0.99 1.02 1.05 1.06 1.07

Tin US$/lb 13.08 11.16 9.45 9.09 9.45 9.75 10.30 10.55 10.80 10.95 10.80

PRECI OUS METALS

Gold US$/oz 1,508 1,706 1,683 1,632 1,740 1,790 1,815 1,855 1,870 1,830 1,770

Platinum US$/oz 1,785 1,771 1,531 1,526 1,685 1,700 1,700 1,765 1,795 1,765 1,725

Palladium US$/oz 760 752 630 673 700 730 775 820 850 850 838

Silver US$/oz 38.5 38.9 31.8 31.2 34.8 35.3 36.2 37.4 37.5 36.9 36.3

ENERGY

WTI NYMEX US$/bbl 102.5 89.5 94.1 102.4 107.0 108.5 111.0 114.5 116.5 116.0 114.5

Dated Brent US$/bbl 117.0 112.9 109.3 115.8 123.5 122.5 123.0 124.5 125.0 123.5 121.0

Uranium US$/lb 56.4 51.8 52.6 53.1 56.0 60.5 65.0 68.5 71.5 74.0 76.0

BULKS

Thermal coal2 US$/t 130.0 130.0 130.0 130.0 115.0 115.0 115.0 115.0 125.0 125.0 125.0

Premium hard coking US$/t 330.0 315.0 285.0 235.0 206.0 215.0 220.0 220.0 225.0 225.0 220.0

Hard coking US$/t 300.0 290.0 265.0 225.0 196.0 195.0 200.0 200.0 200.0 200.0 195.0

Semi-soft coking coal US$/t 275.0 230.0 208.0 171.0 151.0 170.0 175.0 175.0 175.0 175.0 170.0

Iron ore lump US$/t 206.1 202.0 177.6 168.0 175.2 180.0 183.9 183.9 181.5 176.7 173.2

Iron ore fines US$/t 171.8 168.3 148.0 140.0 146.0 150.0 152.0 152.0 150.0 146.0 142.0

OTHER METALS

Alumina US$/t 326 300 262 265 278 280 288 291 288 288 291

Molybdenum US$/lb 16.7 14.6 13.4 13.8 14.8 15.8 16.3 16.5 16.8 16.9 16.7

Cobalt US$/lb 18.3 17.1 15.1 14.8 15.3 16.2 16.8 17.0 17.5 18.0 18.0

EXCHANGE RATES

AUD/USD US$ 1.08 1.05 1.04 1.06 1.05 1.09 1.10 1.10 1.10 1.10 1.10

NZD/USD US$ 0.82 0.83 0.79 0.83 0.84 0.86 0.88 0.90 0.90 0.90 0.90

EUR/USD US$ 1.46 1.41 1.35 1.33 1.35 1.36 1.37 1.37 1.37 1.36 1.34

USD/JPY ¥ 81.03 76.78 77.48 80.06 78.96 75.67 73.00 70.67 70.00 70.00 70.00

USD/CAD C$ 0.96 0.99 1.01 1.00 0.99 1.00 1.02 1.04 1.06 1.08 1.10

Note 1: Average prices Note 2: Thermal coal prices are for JPY year starting April 1 Note 3: Historical data are actuals

Sources: Bloomberg, ANZ Commodity Strategy, ANZ FX Strategy



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ANZ Commodity Daily 598 040412