Investment Research — General Market Conditions

03 August 2010

Commodities Daily
Commodities news
Today’s key points
 Overview: Risk appetite higher as S&P500 closes at highest level in two and a half
months on strong earnings and better-than-feared economic data. Oil prices broke  US factory orders

firmly through the USD80 mark yesterday. EUR/USD reaches highest level since  API oil inventories
early May on positive risk appetite. Xstrata Plc, the largest exporter of coal for power
generation, said in its quarterly report that first-half profit more than tripled as metal
prices jumped.

 US: The ISM index fell less than expected in July, but the details were softer than Commodities overview
suggested by the headline as new orders index dropped to 53.5 – the lowest since June Contract Last price %, d/d
2009. With the inventory rising to 50.2, the forward-looking implications of the detail WTI, NYMEX 1. pos 81.5 3.2
are for a further decline in the ISM during H2 according to our economists. We Brent, ICE 1. pos 80.9 3.5
continue to see a slow deceleration as the most likely scenario and a relatively low Heating Oil, NYMEX 1. pos 216.0 5.7
risk of a double-dip. Bottom line is thus that it is positive that the slowdown in the Gasoline, NYMEX 1. pos 217.0 3.0
manufacturing sector is taking place more slowly than feared, but there is little doubt
Aluminium, LME 3M 2217 1.9
that the ISM will be lower in six months’ time.
Copper, LME 3M 7424 1.7
 Oil: With oil prices breaking the psychologically important USD80 mark yesterday, Lead, LME 3M 2215 6.6
the way could be paved for a period with prices within the USD80-85 range. We do Nickel, LME 3M 21775 3.0
not think this band will become well-established however, and look for a downward Zinc, LME 3M 2078 2.6
correction late summer/early autumn as focus could quickly shift to the still rather Steel, LME 3M 480 0.5
bleak fundamentals in the oil market. Indeed, US stocks have continued to creep Hot Rol Coil, NYMEX 1. pos 580 -0.9
higher in recent weeks and, after a very strong May, US product demand growth has
Gold, spot 1183 0.2
fallen markedly. With the OECD forward demand cover – a key indicator of tightness
Silver, spot 18 1.3
in the market – rising to an elevated 61 days in May, the recent surge in prices does
not seem justified by fundamental factors. That said, we still look for a final leg Wheat, CBOT 1. pos 695.0 5.1
higher in prices towards the end of the year, provided that industrial activity continues Corn, CBOT 1. pos 392.8 0.0
to expand, driving not least distillate demand higher. Source: Bloomberg, Danske Markets.

ICE Brent crude oil (last

Commodities Research:

Chief Analyst
Arne Lohmann Rasmussen
+45 4521 8532
arr@danskebank.dk

Senior Analyst
Christin Tuxen
+45 45137867
tux@danskebank.dk

Commodities Sales:

Senior Dealer
Martin Vorgod
+45 4514 3286
mavo@danskebank.dk

Vice President
Source: Bloomberg, Danske Markets. Fredrik Åberg
+45 4514 3285
fredrik.aberg@danskebank.dk

Bloomberg: DRFX <GO>

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Commodities Daily

Commodity-price movements

03.08.2010 Yesterday Month ago Year ago This year

Last price %, today Close %, d/d Price %, m/m Price %, y/y %, YTD
Energy (1. pos):
NYMEX WTI ($/bbl) 81.5 0.2 81.3 3.0 72.1 13.0 71.6 13.9 2.7
ICE Brent ($/bbl) 80.9 0.1 80.8 3.4 71.7 12.9 73.5 10.0 3.8
NYMEX Heating Oil ($/gallon) 216.0 0.3 215.4 5.4 191.5 12.7 187.1 15.4 1.9
NYMEX RBOB Gasoline ($/gallon) 217.0 0.0 216.9 2.9 197.8 9.7 206.9 4.8 5.7
ICE Gasoil ($/ton) 679.5 -0.1 680.0 4.9 613.8 10.7 591.5 14.9 6.9
ICE NWE Jet Fuel, CIF ($/ton) 741.3 0.1 740.8 3.9 666.9 11.2 647.9 14.4 5.9
TTF NL Natural Gas (€/mwh) 19.1 4.4 18.3 0.0 20.7 -7.7 9.7 97.9 46.9
Henry Hub Natural Gas ($/MMBtu) 4.7 0.5 4.7 -4.5 4.7 0.8 4.0 17.2 -15.2
Nordpool electricity (€/mwh) 44.1 1.4 43.4 0.0 46.8 -5.8 - - -
Fuel oil, 1%, FOB NWE ($/ton) 481.3 4.8 459.0 - 446.5 3.8 301.3 53.8 81.3
Fuel oil, 3.5%, FOB ARA ($/ton) 451.3 4.2 433.0 - 433.0 3.7 227.0 97.8 98.2
API2 steam coal, CIF ARA ($/ton) 96.1 2.3 93.9 0.2 96.5 -0.5 72.0 33.4 15.5
ICE ECX Carbon Emission (€/tn) 14.5 0.1 14.5 2.4 15.4 -5.5 14.9 -2.3 15.8

Base metals:
Aluminium, LME 3M, $/ton 2217 0.0 2217 1.9 1937 14.5 1970 12.5 -0.6
Copper, LME 3M, $/ton 7424 -1.1 7510 2.9 6410 15.8 6000 23.7 0.7
Lead, LME 3M, $/ton 2215 0.0 2214 6.6 1753 26.4 1950 13.6 -8.9
Nickel, LME 3M, $/ton 21775 -0.8 21950 3.8 18800 15.8 18830 15.6 17.5
Zinc, LME 3M, $/ton 2078 -2.1 2122 4.8 1780 16.7 1844 12.7 -18.8
Steel, LME 3M, $/ton 480 -3.9 500 4.6 425 12.9 385 24.7 17.2
Hot Rolled Coil, NYMEX, 1. pos, $/ton 580 0.0 580 -0.9 610 -4.9 480 20.8 5.5

Precious Metals (spot, $/t oz.):

Gold 1183 0.0 1183 0.2 1209.4 -2.2 960.2 23.2 7.6
Silver 18 0.0 18 1.3 17.7 3.4 14.4 27.6 8.3

Agriculturals (1. pos):

CBOT Wheat ($/bu.) 695.0 0.3 693.3 4.8 487.8 42.5 549.3 26.5 28.3
Matif Mill Wheat (€/ton) 198.5 6.7 186.0 4.1 141.8 40.0 127.5 55.7 51.2
CBOT Corn ($/bu.) 392.8 0.6 390.5 -0.6 364.0 7.9 358.0 9.7 -5.2
CBOT Soybeans ($/bu.) 1054.0 0.1 1053.3 0.1 962.8 9.5 1173.5 -10.2 1.4
NYBOT Sugar ($/lb.) 19.4 -0.9 19.6 0.4 16.7 16.2 18.6 4.2 -28.0

Commodity indices (total return):

DJ-UBS 272 1.0 270 1.8 249 9.4 263 3.4 -2.5
S&P GSCI 4351 2.3 4253 1.2 3905 11.4 4415 -1.5 -4.0
Reuters CRB 277 0.9 274 1.5 254 8.8 266 4.1 -2.2
Rogers commodity index 3251 0.0 3252 2.1 2898 12.2 3078 5.6 -0.7
DJ-AIG 136 1.0 134 1.8 124 9.4 131 3.3 -2.6
S&P GSCI Energy 957 2.7 932 0.8 862 11.0 979 -2.2 -5.8
S&P GSCI Industrial Metals 1676 3.0 1627 2.1 1435 16.9 1399 19.8 -1.8
S&P GSCI Precious Metals 1532 0.4 1527 1.2 1556 -1.5 1236 23.9 7.6
S&P GSCI Agriculture 600 1.2 593 3.1 515 16.4 563 6.5 -2.6
Source: Bloomberg, Danske Markets.

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Commodities Daily

Energy
Oil prices US crude oil stocks, EIA

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

WTI (NYMEX) forward curve Brent (ICE) curve

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Jet fuel and gasoil crack spreads Gasoline crack spread, RBOB, NYMEX 1. pos

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

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Heating oil crack spread, NYMEX 1. pos Fuel oil, NWE, crack spreads

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

CO2 emission rights, ICE 1. pos Electricity, Nordpool quarterly, 1. pos

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Natural gas, 1. pos API2 coal, 1. pos

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

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Metals
Aluminium Aluminium forward curve

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Copper Copper forward curve

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Nickel Nickel forward curve

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

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Zinc Zinc forward curve

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Copper SHFE-LME spread Steel

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Gold and silver Gold forward curve

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

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Grains
Wheat Milling wheat forward curve, NYSE LIffe

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Corn, CBOT 1. pos Corn forward curve, CBOT

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

Soybeans, CBOT 1. pos Soybeans forward curve, CBOT

Source: EcoWin, Danske Markets. Source: EcoWin, Danske Markets.

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Disclosure
This research report has been prepared by Danske Research, which is part of Danske Markets, a division of
Danske Bank. Danske Bank is under supervision by the Danish Financial Supervisory Authority. The authors of
this research report are Arne Lohmann Rasmussen, Chief Analyst and Christin Tuxen, Senior Analyst.

Danske Bank has established procedures to prevent conflicts of interest and to ensure the provision of high
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Financial models and/or methodology used in this research report

Calculations and presentations in this research report are based on standard econometric tools and methodology
as well as publicly available statistics for each individual security, issuer and/or country. Documentation can be
obtained from the authors upon request.

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Major risks connected with recommendations or opinions in this research report, including as sensitivity analysis
of relevant assumptions, are stated throughout the text.

Expected updates
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First date of publication

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using the closing price from the day before publication.

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