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World commodity prices2004 - 2005
AIECE Spring Meeting
Kiel, May 6 2004
AIECE Commodity Report - May 2004 2
Commodity markets are thriving and prices are soaring…
HWWA composite price index (in USD terms): energy*
40
50
60
70
80
90
100
110
120
130
jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04Source : HWWA
2000 = 100
* coal + crude oil
AIECE Commodity Report - May 2004 3
HWWA composite price index (in USD terms): industry*
80
85
90
95
100
105
110
115
120
125
130
jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04Source : HWWA
2000 = 100
* agricultural raw materials + ferrous & non-ferrous metals
AIECE Commodity Report - May 2004 4
HWWA composite price index (in USD terms): foodstuffs*
85
95
105
115
125
135
145
jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04Source : HWWA
2000 = 100
* cereals + oilseeds & vegetable oil + tropical beverages + sugar
AIECE Commodity Report - May 2004 5
…as activity and trade recover
AIECE Commodity Report - May 2004 6
Latest market developments
Surge in raw materials prices… HWWA overall index up 72% between December 2001 (latest trough) and April 2004 Industrial commodities and foodstuffs have surged more than energy prices
…due to the Chinese “heat wave”… China, the world’s workshop, was in 2003 the world’s largest consumer of
coal, absorbing 40% of total world productionsteel and nickel, absorbing 25% of total world production aluminium, absorbing 19% of total world production
as natural resources become scarcer or uncompetitive in China
…highlighting capacity constraints worldwide Lack of investment in basic industries: overinvestment in ICT to the expense of basic
industries Prices of raw materials were until recently quite low on an historical perspective, too
low to boost investment
AIECE Commodity Report - May 2004 7
Where China mattersExample of coal prices
Coal ARA (Amsterdam, Rotterdam, Antwerp)
24
29
34
39
44
49
54
59
64
69
74
jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04
Source : Datastream
$ per tonne
AIECE Commodity Report - May 2004 8
Where China mattersExample of nickel prices
Nickel: prices and stocks on the LME
3500
5500
7500
9500
11500
13500
15500
jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04Source: LME
0
10000
20000
30000
40000
50000
60000
70000$ per tonne stocks: metric tonne
AIECE Commodity Report - May 2004 9
Prices of raw industrial materials on a longer term perspective
60
70
80
90
100
110
120
130
140
91.Q1 92.Q1 93.Q1 94.Q1 95.Q1 96.Q1 97.Q1 98.Q1 99.Q1 00.Q1 01.Q1 02.Q1 03.Q1 04.Q1Source : HWWA
2000 = 100
HWWA composite price index: industry*
* agricultural raw materials + ferrous & non-ferrous metals
in USD
in euros
AIECE Commodity Report - May 2004 10
AIECE Commodity Group forecasts
Factors which could push raw material prices down In Europe: strong euro Seasonnal factors (agricultural commodities)
Factors sustaining raw material prices Strong growth expected in industrial demand in Asia, with China more and more
decisive for prices Supply deficit even on markets believed to be structurally in excess supply
(steel for example) Investment from pension funds away from bourses to commodity markets
(speculation on the London Metal Exchange)
The environment for European raw materials purchasers has deteriorated sensibly, despite a strong euro; no significant downturn is expected in
prices before 2006.
AIECE Commodity Report - May 2004 11
AIECE Commodity Group forecasts
HWWA overall composite price index
50
60
70
80
90
100
110
120
130
93.Q1 94.Q1 95.Q1 96.Q1 97.Q1 98.Q1 99.Q1 00.Q1 01.Q1 02.Q1 03.Q1 04.Q1 05.Q1
Sources : HWWA / AIECE forecasts
2000 = 100
in USD
in euros
AIECE Commodity Report - May 2004 12
AIECE Commodity Group forecasts
Aggregate price developments 2002-2005
HWWA commodity indices in US$ termsIndex values 2000=100 and % change
All commodities 90 103 119 116 1 14 15 -3
Total excl. energy 93 106 132 129 3 14 25 -2
Food total 104 112 140 134 12 8 25 -4
Industrial raw materials 88 103 128 126 -1 17 25 -2
Agricultural raw materials 85 104 118 121 -1 22 14 2
Non-ferrous metals 85 95 131 122 -4 12 38 -7
Ferrous raw materials 102 120 151 153 3 18 26 1
Energy raw materials 89 102 112 109 -1 14 10 -3
Crude oil 88 101 107 105 1 15 5 -2
Source: AIECE Commodity group
2003 2004 20052002
AIECE Commodity Report - May 2004 13
AIECE Commodity Group forecasts
Aggregate price developments 2002-2005
HWWA commodity indices in Euros termsIndex values 2000=100 and % change
All commodities 88 84 88 86 -5 -4 5 -3
Total excl. energy 90 86 97 95 -3 -5 13 -2
Food total 101 92 103 99 6 -9 13 -4
Industrial raw materials 86 84 95 93 -6 -2 13 -2
Agricultural raw materials 83 85 87 90 -6 2 3 2
Non-ferrous metals 83 77 97 90 -9 -7 26 -7
Ferrous raw materials 100 98 111 113 -3 -1 14 1
Energy raw materials 86 83 83 81 -6 -4 0 -3
Crude oil 85 83 79 77 -4 -3 -4 -2
Source: AIECE Commodity group
2003 2004 20052002
AIECE Commodity Report - May 2004 14
AIECE Commodity Group forecastsAggregate prices
AIECE Commodity Report - May 2004 15
AIECE Commodity Group forecastsEnergy prices
AIECE Commodity Report - May 2004 16
AIECE Commodity Group forecastsNon-ferrous metals prices
AIECE Commodity Report - May 2004 17
AIECE Commodity Group forecastsFerrous metals prices
AIECE Commodity Report - May 2004 18
AIECE Commodity Group forecastsAgricultural prices
AIECE Commodity Report - May 2004 19
AIECE Commodity Group forecastsFood and beverages prices
World commodity prices2004 - 2005
AIECE Spring Meeting
Kiel, May 6 2004