Perspectivas sobre el oro, cobre y plata
38
Commodities Review and Outlook Gold, Silver and Copper Latin Exploration 2011 Argentina October 2011 Carlos Sanchez Director, Commodities Management [email protected] 30 Broad Street, 37 th Floor New York, NY 10004 www.cpmgroup.com
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Carlos Sanchez. Director de Commodities Management. CPM Group. Día 1.
Transcript of Perspectivas sobre el oro, cobre y plata
Commodities Review and OutlookGold, Silver and Copper
Latin Exploration 2011ArgentinaOctober 2011
Carlos Sanchez Director, Commodities [email protected]
30 Broad Street, 37th FloorNew York, NY 10004www.cpmgroup.com
Overview of CPM Group
ConsultingInvestment Banking
Asset Management
Commodities Management
CommoditiesResearch
Market
Intelligence
AnalysisM
arket
Intel
ligen
ce
Analysis
Market
Intelligence
Analys
isMark
et
Intel
ligen
ce
Analys
is
• Mergers & Acquisitions
• Debt and equity fund raising services
• Corporate financial advisory
• Short to long term advisory services
• Independent market consulting services
• Open consulting access to analysts on exchange traded commodities and specialty metals.
• Managed Accounts
• Non-Exchange Traded Metals Management
• Risk management
• Principal advisor and hedging manager
• Advisor to help management teams choose or execute their actions
• A strategic advisor, managing hedging on an ongoing basis
• Weekly Reports
• Monthly Advisories
• Annual Precious Metals Yearbooks
• Annual Precious Metals Long-Term Studies
• Base Metals Long-Term Outlook
• Economic Research
• Currency Research
• Country Risk Analysis
• Special Studies
• Client Specific Research
Producers
Consumers
Producers
Development Stage Companies
International Organizations
Governments
Refiners
Institutional Investors
Producers
Consumers
Hedge Funds
Refiners
Private Clients
Hedge Funds
Institutional Investors
Private Clients
Smelters
Financial Institutions
Institutional Investors
International Organizations
Governments
2
3
Outline
• Gold Market Supply and Demand Review
• Silver Market Supply and Demand Review
• Copper Market Supply and Demand Review
• Macro Economic Environment and Influences
• Gold, Silver and Copper Outlook
Outlook for Gold, Silver and Copper
Gold, Silver and Copper Prices
4
757677787980818283848586878889909192939495969798990001020304050607080910110
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The Price of Silver Monthly Average, Through September 2011
$/Ounce $/Ounce
757677787980818283848586878889909192939495969798990001020304050607080910110
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The Price Copper Monthly Average LME, Through September 2011
US$/mt US$/mt
75767778798067581828384675858687888990919293949596979899000102255.80304050607080910110
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2,000
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200
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800
1,000
1,200
1,400
1,600
1,800
2,000
$/Ounce $/Ounce
The Price of Gold Monthly Average, Through September 2011
5
Latin America’s Contribution to Supply & Demand
2001 20100%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%Mine Production
Reserve Base
Gold - % of World
2001 20100%
10%
20%
30%
40%
50%
60%Mine ProductionReserve Base
Silver - % of World
2001 20100%
10%
20%
30%
40%
50%
60%Mine ProductionReserve Base
Copper - % of World
• ~1% of world gold fabrication demand comes from Latin America
• ~2.5% of world silver fabrication demand comes from Latin America
• ~5.2% of world copper demand comes from Latin America, although a large amount of copper bearing end-products are for export
Gold
6
Gold Supply and Demand Balance
• Total available supply was 110.7 million ounces in 2010, up from 103.5 million ounces in 2009.
• This year total available supply could rise to 115.8 million ounces and to 120.8 million ounces in 2012 as mine production rises
• Investment demand has surged from 15.5 million ounces in 2000 to more than 25 million ounces over the past several years.
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11p
2012p
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130
140
0
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100
110
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130
140
Million Ounces Million Ounces
Available Supply
Fabrication Demand
Investment Demand
Supply and Demand Balance, Annual, Projected Through 2012
Total Gold Supply and Fabrication Demand
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130
140
Million Ounces
Secondary Supply
South African Mine ProductionMillion Ounces
Transitional Economies
Other Mine Production
Total Gold Supply
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82.0
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0
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80
90
100
110
120Million Ounces
Jewelry, Developing Countries
Dental
Jewelry, Developed Countries
Million Ounces
Annual Total Demand
Electronics
Other
World Mine Production and Scrap Supply
9
73
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80
81
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91
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00
01
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10p
11p
12p
0
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90
0
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50
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70
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90Million Ounces Million Ounces
South Africa
Other Market Economies
Total World Mine Production
Transitional Economies
ChinaRussia
United States
Australia
PeruCanada
Indonesia
77
78
79
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10p
11p
0
5,000
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15,000
20,000
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30,000
35,000
40,000
45,000
50,000
0
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30
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40
45
50
Other
Japan
United States
Latin America
Europe
China
Middle East
Far East (Excluding Japan & China)
Indian Subcontinent
Annual Gold RecoveryProjected Through 2011
Million Ounces Million Ounces
Investment Demand & Official Transactions (Central Bank Activity)
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12p
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-40
-20
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20
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120Percent ChangeMillion Ounces
Investment Demand's Effect on Gold Prices Price Change Through September 2011
Net Investment Demand (left scale)
Percent Change in Price
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0001020304050607080910
11p
12p
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-20
-10
0
10
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30
-50
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-30
-20
-10
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10
20
30Million Ounces Million Ounces
Net Additions
Net Reductions
Official Gold TransactionsProjected Through 2011
Gold’s Low Correlation to Other Indicators and Six Broad Sets of Factors Drive Investment Demand for Gold
Correlations
Monthly
Gold Inflation TWD DJIA S&P T-Bill T-Bond
1970 - 1990 0.08 -0.31 0.03 -0.03 -0.12 -0.19
1978 - 1982 0.06 0.06 0.32 0.13 -0.32 -0.32
1970 - 2010 0.08 -0.27 -0.04 -0.05 -0.07 -0.11
1990 - 2010 -0.08 -0.25 -0.17 -0.11 -0.18 -0.20
2000 - 2010 -0.08 -0.38 -0.17 -0.13 -0.07 -0.17
2006 - 2010 -0.06 -0.39 -0.14 -0.13 0.02 -0.09
Note: TWD - JP Morgan Trade Weighted Dollar.
Source: CPM Group
• Portfolio Diversifier
• Currency Hedge
• Inflation Hedge
• Safe Haven
• Commodity
• Form of Savings
11
Gold Price Drivers
• Gold prices are determined through the interplay of a complex set of fundamental factors within the gold market, and economic, financial and political trends outside of the market.
• Gold is both a financial asset and a commodity. It trades more like a financial asset than an industrial commodity, and its price embodies an investment premium.
• Fabrication demand, mine production, secondary supply, and central bank gold market activity all affect gold prices, but in the case of the first three market segments the gold price has more influence on them than they do on the gold price.
• Investment demand tends to have the greatest influence in determining gold prices.
12
Silver
13
Silver Supply and Demand Balance
• Fabrication demand has risen overall since the 1980s
• Supply has lagged until recently, but investors are buying the excess supplies
• From the early 1990s through 2005, silver from investor holdings filled the demand and supply gap
• In 2006, investors became net buyers of silver
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2011p
2012p
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800
900
1,000
1,100
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100
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300
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1,000
1,100
Million Ounces Million Ounces
Supply
Fabrication Demand
Supply and Demand Balance
Annual Silver Supply and Demand
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11p
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1,000
1,100
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100
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1,000
1,100
Secondary
Mine Production
Million Ounces Million Ounces
Net Exports from Tran. Econ.
Government Disposals
Annual Total Supply
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1,000
1,100
SuperconductorsBiocidesOther UsesOther CountriesImports into Trans. Econ.Solar Technology
Million Ounces Million Ounces
Annual Fabrication Demand for Silver
Photography
Electronics
Jewelry, Silverware
Silver Market Surplus/Deficit (Also Known as Investment Demand)
• Investment demand has been a main force behind rising and sustained silver prices.
• It has been net buying or selling by investors that has played a major force behind price increases and decreases over the past years
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11p
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-250
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150
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100
Million Ounces $/Ounce
Nominal Price
09pActual
Real Price
Annual Investment Demand, Base Case Scenario
Silver Market Balance
Surplus/Net Additions to Inventories
Deficit/Net Subtractions to Inventories
Growing Investment Demand
Note: CEF-Central Fund of Canada traded on the Toronto Stock Exchange. SLV-iShares Silver Trust traded on the American Stock Exchange. ZKB-Zurich Cantonal traded on the Swiss Exchange. ETF-ETF Securities traded on the London Stock Exchange and Australian Securities Exchange, and New York Stock Exchange. Julius Baer traded on the Swiss Exchange. SIVR-ETF Securities traded on the New York Stock Exchange. ETF Australia-ETF Securities traded on the Australian Stock Exchange. GLTR—ETF Securities traded on NYSE. WITE—ETF Securities traded on NYSE. Data as of 30 September 2011.
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100
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WITE
GLTR
PSLV
SVR.UN
SBT.U
JB
SIVR
MSL
ZKB
PHAG
SLV
CEF
Exchange Traded Funds' Physical Silver HoldingsMonth End, Through September 2011
Million Ounces Million Ounces
70
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10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000Million Ounces Million Ounces
Trading Volume in the Futures Market
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0
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80Transitional EconomiesOther CountriesMexicoGermanyFranceAustria
Million Ounces Million Ounces
Coinage Demand
Silver Price Drivers
• Silver has a more dualistic nature than gold: It is both an alternative asset and safe haven investment, and an industrial commodity.
• Investors are buying silver at present because they see both of its attributes – as a financial asset and an industrial commodity – as being positive for the metal’s price in the future.
• Industrial demand is rising in some uses, strongly, even as it continues to decline in other markets.
• Investor buying and selling of silver is the key price determinant.
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Copper
Copper Supply and Demand Balance
• High capital expenditures, low ore grades, and more challenging exploration and development environments have led to more than a decade of under of investment in this sector.
• Increased technical and labor-related supply disruptions also have curtailed growth in copper supplies since 2006.
• Chinese demand for copper increased over three fold during last decade tightening the global market balance.
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8,000
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16,000
18,000
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-1,000
-750
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0
250
500
750Thousand Metric Tonnes Thousand Metric Tonnes
World Demand World Supply
Deficit (RHS) Surplus (RHS)
Supply and Demand Balance
Annual Copper Mine Supply and Demand
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97 98 99 00 01 02 03 04 05 06 07 08 09 100
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4
6
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20Taiwan ItalySouth Korea JapanGermany U.S.A.
Global Refined Copper ConsumptionAnnual, Through 2010
Million Mt
Source: ICSG, WBMS, CPM Group
ChinaU.S.A
Germany
Other
Japan
97 98 99 00 01 02 03 04 05 06 07 08 09 100
2
4
6
8
10
12
14
16
18
20Zambia Australia
Indonesia U.S.A.
China Peru
Global Copper Mine ProductionAnnual, Through 2010
Million mt
Source: ICSG, WBMS, CPM Group
Chile
Peru
Other
U.S.A.China
What is Modernization?
22
6% 1%1%
1%
24%
11%
3%12%
7%
4%
8%
6%
3%
11%
Plumbing
Building Plant
Architecture
Communications
Electrical Power
Power Utility
Telecom.
Industrial
Automotive
Other Transportation
Consumer & General Products
Cooling
Electronic
Diverse
Equipment Manufacture
Infrastructure
Building Construction
23
Population Growth
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 300
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Brazil
Pakistan
Indonesia
United States
Europe
China
World PopulationProjected Through 2030
Million People Million People
Source: U.S. Census Bureau, U.N., CPM Group
India
Rest of World
Europe
China
Actual Projections
January 13, 2011
% o
f P
opu
lati
on L
ivin
g in
Urb
an A
reas
Source: CIA World Factbook, IMF
Urbanization and Industrialization to Support Demand
Higher levels of income often translate into a greater percentage of the population living in or near cities, requiring greater quantities of raw materials to support construction efforts.
Of China’s 1.3 billion citizens, roughly 43% of China’s population lived in urban areas in 2008.
- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
31023286300.0%
39586807400.0%
12680443300.0%
20110333000.0%
13939020500.0%
133014129500.0%
4863606800.0%
4910910700.0%
11246885500.0%
9990017700.0%7780412200.0%
India
Indonesia
Note: Size of bubble reflects total population
Per Capita GDP (PPP)
The World is ChangingMajor World Economies: Share of Global Gross Domestic Product
2008 2030
RankPercent of
Total RankPercent of
Total
United States 1 26.7% 1 22.8%China 3 6.3% 2 15.5%Japan 2 9.1% 3 5.2%Germany 4 6.1% 4 4.3%India 11 2.0% 5 4.2%United Kingdom 5 4.8% 6 3.7%France 6 4.6% 7 3.3%Brazil 10 2.3% 8 2.6%Russia 12 1.9% 9 2.4%Italy 7 3.6% 10 2.3%Canada 8 2.6% 11 2.2%Spain 9 2.5% 12 1.8%Other 27.5% 29.7%Subtotal top economies 72.5% 70.3%
Notes: Adjusted for purchasing power parity.
Source: The Economic Research Service of the U.S. Department of Agriculture
26.7%
6.3%
9.1%
6.1%
2.0%4.8%4.6%
2.3%1.9%
3.6%
2.6%2.5%
27.5%
United StatesChinaJapanGermanyIndiaUnited KingdomFranceBrazilRussiaItalyCanadaSpainOther
2008 Percent of Total
22.8%
15.5%
5.2%4.3%4.2%3.7%3.3%
2.6%2.4%
2.3%2.2%1.8%
29.7%
United StatesChinaJapanGermanyIndiaUnited KingdomFranceBrazilRussiaItalyCanadaSpainOther
2030 Percent of Total
25
Copper Price Drivers
• Growth in demand, mainly from developing economies, in particular China, is expected to outpace growth in supply in copper.
• The majority of demand for copper goes toward construction, manufacturing, infrastructure, and transportation.
• The launch of physically backed exchange traded funds (ETFs) for copper could still have a significant influence on prices.
• Supply and demand matter, investors also have a role.
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The Macroeconomic Environment
The Economic Environment
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World Emerging Economies Advanced Economies
Average Global GDP = 3.6%
Percent
Average Global GDP = 3.0%
Average Global GDP =4.6%
Real Gross Domestic ProductAnnual, Projected Through 2016
Percent
Source: IMF World Economic Outlook, September 2011
00 01 02 03 04 05 06 07 08 09 10 11p 12p-6
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World Emerging Economies Advanced Economies
Real Gross Domestic ProductQuarterly, Projected Through 2012
Percent Percent
Stock Markets Have Become Increasingly Vulnerable to Sharp Declines
• The MCSI all country world index (ACWI) is compromised of 48 country indices, which include 23 developed and 25 developing market country indices, and is designed to gauge the equity performance.
• The MCSI developing market index tracks the performance of 25 emerging markets.
• The MSCI developed world index meanwhile gauges the performance of 23 developed nations.
29
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World
Developing
Developed
MSCI International Equity Indices Month-end, Through 30 September 2011
IndexIndex
Industrial Production has Picked up, Although…
30
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-30%
-20%
-10%
0%
10%
20%
30%
40%
Euro zone
United States
United Kingdom
Japan
Industrial Production in Developed Economies
Monthly, Year-over-Year Percentage Change
05 06 07 08 09 10 11-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Brazil
China
India
Industrial Production in Developing Economies
Monthly, Year-over-Year Percentage Change
Low Capacity Utilization and High Unemployment
31
05 06 07 08 09 10 1150
55
60
65
70
75
80
85
90
95
100
Japan
United States
Euro zone
Capacity Utilization
Quarterly, Projected Through September 2011 (2005 indexed to 80)
05 06 07 08 09 10 112%
3%
4%
5%
6%
7%
8%
9%
10%
11%
Euro zoneUnited StatesUnited KingdomJapan
Unemployment Rates
Percent
Official or Targeted Interest Rates
32
05 06 07 08 09 10 110
1
2
3
4
5
6
7
Official or Targeted Interest Rates in Select Developed Economies
United States United Kingdom
Canada
Euro area
Japan
Percent
05 06 07 08 09 10 110
2
4
6
8
10
12
14
16
18
20
Official or Targeted Interest Rates in Select Developing Economies
India
Brazil
China
Percent
Inflation is a Concern, disinflation was and could be too
33
05 06 07 08 09 10 11-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Euro zone
United States
United Kingdom
Japan
Canada
Inflation in Developed Economies
Monthly CPI, Year-over-Year Percentage Change
05 06 07 08 09 10 11-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Brazil
China
India
Indonesia
Inflation in Developing Economies
Monthly CPI, Year-over-Year Percentage Change
Yields on Benchmark Government Bonds
34
05 06 07 08 09 10 110
1
2
3
4
5
6
7
Germany
United States
Britain
Japan
Percent
Yields on 10-Year Government BondsDaily, Through 4 October 2011
05 06 07 08 09 10 110
2
4
6
8
10
12
14
16
18
20
22
24
26
28
Portugal
Ireland
Greece
Spain
Italy
Percent
Yields on 10-Year Government BondsDaily, Through 4 October 2011
Confidence is Low and Savings Rates are Rising in the United States
35
90 92 94 96 98 00 02 04 06 08 100
20
40
60
80
100
120
140
160
U. of Mich. Survey of Consumer Confidence
Conference Board Consumer Confidence
Consumer Confidence
Index, Monthly Through September 2011
90 92 94 96 98 00 02 04 06 08 100
1
2
3
4
5
6
7
8
9
10
Personal Savings in the United States as a % of Disposable Income
Percent, Monthly Through August 2011
Monetary and Fiscal Problems
36
Jan-07 Aug-07 Mar-08 Oct-08 May-09 Dec-09 Jul-10 Feb-11 Sep-110.0
500,000.0
1,000,000.0
1,500,000.0
2,000,000.0
2,500,000.0
3,000,000.0
0.0
500,000.0
1,000,000.0
1,500,000.0
2,000,000.0
2,500,000.0
3,000,000.0Central Bank Liquidity Swaps
Term Auction Credit
MBS
Federal Agency Debt Securities
U.S. Treasury Securities
Major Assets of the Federal Reserve System
U.S. Treasury Securities
Mortgage Backed Securities
US$ Trillion US$ Trillion
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
-1,600,000
-1,400,000
-1,200,000
-1,000,000
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
-1,600,000
-1,400,000
-1,200,000
-1,000,000
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
Red = Republican Blue = DemocratGrey = Party N/A
$US Billion $US Billion
ActualProjec-tions
U.S. Budget Surplus & Deficit, CBO Projections
• Economic growth is uneven around the world• Developed economies are facing sluggish economic conditions• Monetary tools in developed economies are not fully working• Stock markets are vulnerable to further declines and further volatility• Spare capacity in developed economies is of growing concern• Unemployment remains a large problem in developed economies• Currency volatility has increased• Demand for safe haven assets, such as gold and developed economy bonds, remains firm • High consumer debt in developed economies remains problematic• Government debt in several euro zone nations is causing increased stresses• High inflation in developing nations are causing concern• An increase in the supply of U.S. dollars is adding to anxieties over fiat currency• In the United States confidence is low, in Europe too• Consumer spending is low, and savings rates are rising from very low levels in the U.S.• World governments have coped but many problems remain• In this environment, investors have been moving to safe haven assets, including treasury
securities, cash, and gold and silver
Financial and Economic Conditions
37
Overview of CPM Group
ConsultingInvestment Banking
Asset Management
Commodities Management
CommoditiesResearch
Market
Intelligence
AnalysisM
arket
Intel
ligen
ce
Analysis
Market
Intelligence
Analys
isMark
et
Intel
ligen
ce
Analys
is
• Mergers & Acquisitions
• Debt and equity fund raising services
• Corporate financial advisory
• Short to long term advisory services
• Independent market consulting services
• Open consulting access to analysts on exchange traded commodities and specialty metals.
• Managed Accounts
• Non-Exchange Traded Metals Management
• Risk management
• Principal advisor and hedging manager
• Advisor to help management teams choose or execute their actions
• A strategic advisor, managing hedging on an ongoing basis
• Weekly Reports
• Monthly Advisories
• Annual Precious Metals Yearbooks
• Annual Precious Metals Long-Term Studies
• Base Metals Long-Term Outlook
• Economic Research
• Currency Research
• Country Risk Analysis
• Special Studies
• Client Specific Research
Producers
Consumers
Producers
Development Stage Companies
International Organizations
Governments
Refiners
Institutional Investors
Producers
Consumers
Hedge Funds
Refiners
Private Clients
Hedge Funds
Institutional Investors
Private Clients
Smelters
Financial Institutions
Institutional Investors
International Organizations
Governments
38
