ANZ Commodity Daily 599 050412

8/2/2019 ANZ Commodity Daily 599 050412

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ANZ RESEARCH

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

Natalie Robertson +613 9273 3415 | [email protected]

MARKET HI GHLI GHTS OVERNI GHT WRAP

Oi l sl ipped a f t er US c rude s tocks rose by 9 .0m bbls Gold fe l l on reduced exp ec ta t ions o f QE3 in t he US Base m e t a l s p lunged on w or r i es ove r Eu rope Coa l dow n . Wor r i es ove r I ndones ia s po t en t i a l expo r t t ax

OVERNI GHT RANKED PRI CE MOVES (% )

(3.8)

(3.2)

(3.2)

(3.0)

(2.6)

(2.5)

(2.3)

(1.6)

(1.5)

(1.5)

(1.4)

(1.0)

(0.5)

0.3

(5.0) (4.0) (3.0) (2.0) (1.0) 0.0 1.0

Silver

Copper

Nickel

Lead

Platinum

WTI Oil

Zinc

Co al (NEWC)

Gold

Aluminium

Tin

S&P 500

Baltic F reight

USD (DXY)

WEEK-TO-DATE RANKED PRICE MOVES ( % )

(3.7)

(3.5)

(2.6)

(2.2)

(2.1)

(1.8)

(0.6)

(0.5)

(0.1)

0.4

0.8

1.0

1.2

1.7

(5.0) (4.0) (3.0) (2.0) (1.0) 0.0 1.0 2.0 3.0

WTI Oil

Aluminium

Gold

Platinum

Silver

Co al (NEWC)

Zinc

S&P 500

Copper

Baltic F reight

USD (DXY)

Lead

Tin

Nickel

Sources: Bloomberg, ANZ Commodity Strategy

Overn igh t Them es It was a risk-off session overnight withthe focus back on Europe following a poorly subscribed Spanish

government bond auction. Spain sold fewer government bonds

than hoped and following the auction yields in the secondary

market for Spanish government debt advanced by 20-30 bps

across the curve. Italian (+21bps) and Portuguese (+26bps)

government yields all increased. The European Central Bank

(ECB) kept its policy rate unchanged at 1.00%, as unanimously

expected by the market. The ECB appears to be reorienting

monetary policy back to a more traditional approach, with

policy focusing on maintaining price stability. Commodity

markets were hit, despite a positive employment read from the

US. ADP private sector employment rose by 209K (market:

206K) in March, whilst the previous months data was revised

up by 14K to 230K. Non-farm payrolls data are released on

Friday night, and we expect an increase of 220K (Market:

205K, Last: 227K). The unemployment rate will also be a focal

point given its importance for monetary policy we expect the

unemployment rate to remain around 8.3% near term.

Crude benchmarks s l ipped , following the negative tone inoutside markets. WTI was further pressured by the US DOE

data showing another sharp 9.0mbbls build in crude stockpiles

(Market: +2.5mbbls) to the highest level since late June 2011,despite just a 500kbbls increase in crude imports. Most of the

build came from higher production levels in the Gulf Coast of

6.0mbbls/day, potentially catching up after recent shipping

delays in the Houston channel. Brents premium to US crude

widened further to US$21.5/bbl, given the weakness in US oil

prices. Although we think the dip in prices could present buying

opportunities for investment funds going long oil, creating

some upside risk near term.

Go l d f e ll 1 . 5 % t o U S$ 1 , 6 2 1 / o z, with prices removing nearlyall the gains it had accumulated since the beginning of the

year. Prices remained under selling pressure after the FOMC

signalled it saw no need to add more easing unless growth

stalls, firming the US dollar in the process. Although the weakerthan expected service sector index in the US triggered a mild

recovery in prices.

Base meta ls p lunged , still under pressure as marketsreassess QE3 in the US and Europe crawled back into the

headlines after the disappointing Spanish bond auction. Copper

prices fell back towards the middle of the recent trading range,

but held above the 200-day moving average. Markets will likely

focus on US non-farm payrolls this Friday. With our house view

for US employment data to come in above consensus, we could

see room for potential upside in copper prices.

Newcas t l e coa l f u t u res decl i ned 1 . 6% t o US$107 / t in linewith other commodities. Indonesias consideration of a 25%coal export tax next year stirred some anxiety for local coal

producers who are increasingly more reliant on price-sensitive

buyers from India and China. Although we maintain that such a

tax would be controversial with implementation likely to be

delayed, as local miners seek compensation.

Apr i l 5 , 2012


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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 2,053 (1.5) (3.5) (5.2) (3.8) Aluminium 5,065 (0.1) (0.2) (0.5) 2.1

Copper 8,359 (3.2) (0.1) 0.8 7.6 Copper 260 (0.4) 1.4 (7.6) (28.7)

Nickel 17,785 (3.2) 1.7 (5.4) (8.4) Nickel 101 0.1 0.7 2.6 8.4

Zinc 1,976 (2.3) (0.6) (0.9) 2.5 Zinc 896 (0.1) (0.3) 3.3 9.3

Lead 2,007 (3.0) 1.0 (2.5) 2.1 Lead 374 (0.5) (0.7) 2.8 5.8

Tin 22,631 (1.4) 1.2 2.0 10.9 Tin 13 0.0 2.6 15.9 18.1

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

Gold 1,621 (1.5) (2.6) (3.8) (1.3)

Gold (A$/oz) 1,579 (0.6) (1.6) (0.9) (1.0) S&P 500 1,399 (1.0) (0.5) 3.4 8.2

Silver 31.4 (3.8) (2.1) (6.1) 4.7 VIX Volatility Index 16 5.0 6.3 (13.8) (21.9)

Platinum 1,600 (2.6) (2.2) (1.9) 7.1 CRB Index 305 (1.9) (2.1) (3.0) (2.8)

Palladium 636 (2.8) (1.9) (7.4) (0.8) LME Metals Index 3,540 (2.7) (0.6) (1.2) 3.4

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

WTI Oil* 101 (2.5) (3.7) (4.4) 0.6

Brent Oil* 123 (1.7) (1.2) (1.1) 9.3 Baltic Freight Rate 926 (0.5) 0.4 16.0 (22.4)

Sing Gasoil 0.5% 137 0.0 0.1 1.9 4.6 Baltic Capesize 1,475 1.3 8.4 (2.6) (26.0)

Sing Fuel Oil 180cst(US$/t) 747 (1.0) (0.5) 0.6 1.0 Baltic Panamax 1,043 (0.6) 0.3 21.6 (25.1)

OTHER (US$/t) Baltic Handysize 552 (0.7) (2.5) 21.1 0.7

China HR Coil (RmB/t) 4,375 0.0 0.1 1.9 3.5 Close 1 Day 1 W k 1 Mt h 3 Mt h

Richards Bay Coal API4 103 (0.7) (1.1) (1.1) (2.1)

Newcastle Coal*** 107 (1.6) (1.8) (2.0) (5.8) DXY - USD Index 79.7 0.3 0.8 0.0 (2.0)

Australia Coking Coal** 208 (0.4) (4.1) (9.6) AUD/USD - Aussie 1.026 (0.9) (1.0) (3.0) (0.3)

Iron Ore Spot 148 0.0 (0.1) 3.2 3.8 NZD/USD - Kiwi 0.815 (1.0) (0.1) (0.6) 2.5

% Ch a n g eCurrenc ies

% Ch a n g eK ey Ind ices

% Ch a n g eFre igh t

Com m od i t ies I n ven t o r ies% Chang e % Change

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

A pr Jun A ug Oct Dec Feb

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


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


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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 599 050412

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