energy & metals consensus forecasts by consensus economics inc

DECEMBER 2012

1© Copyright Consensus Economics Inc. 2012

Survey DateDecember 17, 2012

Energy & Metals Consensus Forecasts surveys more than 30 energy and metals analysts every othermonth for a range of commodity price forecasts. The results covering over 25 commodities – togetherwith reference data, analysis, special surveys, and the underlying global macroeconomic outlook –are sent to subscribers by express mail and e-mail.

Overview ................................................ 2

Macroeconomic Outlook ...................... 3

Commodity Price Indices ..................... 4

Long-Term Forecasts (2012-2022) .......... 5

Individual Commodity ForecastsCrude Oil .............................................. 6Gasoline & Heating Oil ......................... 7Gas Oil ................................................ 8Natural Gas .......................................... 9Coal ................................................... 10Uranium ............................................. 11

Aluminium .......................................... 12Alumina.............................................. 13Copper ............................................... 14Nickel ................................................ 15Lead ................................................... 16Zinc ................................................... 17

Steel .................................................. 18Iron Ore.............................................. 19Tin, Cobalt, Manganese ..................... 20Molybdenum, Rutile, Ilmenite, Zircon 21

Gold ................................................... 22Silver ................................................. 23Platinum ............................................ 24Palladium ........................................... 25

Real (Inflation-Adjusted) Price Trends:A Special Analysis .......................... 26-27

Chart of Commodity Forecasts........... 28

ContentsPage

(continued on page 2)

Publisher: Philip M. Hubbard Editor: Che-Wing PangAssistant Editors: Christoper J. McNiff

David M. Baker

Real (Inflation-Adjusted) Commodity PriceTrends and Forecasts: A Special Analysis

In this month’s special analysis on pages 26 and 27, we reviewhow major commodity prices have moved in recent years andconsider how inflation-adjusted price projections can alter senti-ment over the longer term horizon.

OverviewDespite lingering political-economic uncertainties in the US andEurope (page 3), commodity analysts, in general, appear morebullish about the energy and metal price outlook than some head-lines may suggest. True, high debt and a weak global economycould perpetuate financial sector fragility in 2013 and sustainvolality across asset classes. However, investment conditionsshould begin to normalise as the worst of the sovereign crisishas passed, while the slowdown in China seems to have bot-tomed out in Q3. Critically, most G-7 countries have embracedvery expansionary monetary policies, which adds to inflationrisks and the desire to search for real yields. The one hurdle thatcontinues to cause unease, though, is the US ‘fiscal cliff’, as itcould potentially drag America into recession, taking with it a

Energy & Metals Consensus Forecasts (ISSN: 1754-825X) is published by Consensus Economics Inc.,53 Upper Brook Street, London, W1K 2LT, United Kingdom [email protected]: (44 20) 7491 3211 Fax: (44 20) 7409 2331 www.consensuseconomics.com

© Copyright Consensus Economics Inc. 2012. All rights reserved. The contents of this publication, either in whole or in part, may not be reproduced, stored or transmitted in any form or by any means,electronic, photocopying, digitization or otherwise without the prior written permission of the publisher. The Editor and Consensus Economics Inc., do not guarantee or take any responsibility for theinformation set forth herein, including the accuracy, completeness or timeliness of the forecasts or written analysis.

Consensus Forecasts % Changes to December 2013

Our next bi-monthly issue of EMCF will beavailable on February 22, 2013.

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ENERGY & METALS CONSENSUS FORECASTS®

E-mail Edition: - © Consensus Economics Inc. All rights reserved. Under our agreement this publication may notbe reproduced (complete or partial), redistributed, stored in a public retrieval system or broad-cast to persons other than the email subscriber without the prior written permission of ConsensusEconomics Inc.

DECEMBER 2012

2 © Copyright Consensus Economics Inc. 2012

See% change since end

Spot Price Dec. 17

page Dec. 2011 2012 Mar. 2013 Jun. 2013 Sep. 2013

Crude Oil - WTI (US$/bbl) 6 -12.2% 86.73 90.87 92.34 95.00 +9.5%

- Brent (US$/bbl) 6 +0.9% 109.1 106.4 106.7 108.0 -1.0%

Natural Gas (US, US$/MMBtu) 9 +8.4% 3.213 3.443 3.420 3.665 +14.1%

Coal (Steaming, US$/tonne) 10 +7.9% 97.73 101.2 98.2 99.8 +2.1%

Uranium (US$/lb) 11 -15.9% 43.50 50.39 51.80 53.25 +22.4%

Aluminium (US$/tonne) 12 +6.6% 2106 2091 2139 2176 +3.3%

Alumina (US$/tonne) 13 +0.6% 315.4 323.9 326.9 332.5 +5.4%

Copper (US$/tonne) 14 +6.4% 8063 8103 8185 8148 +1.0%

Nickel (US$/tonne) 15 -1.9% 17605 17807 18236 18565 +5.5%

Lead (US$/tonne) 16 +16.7% 2270 2211 2237 2283 +0.6%

Zinc (US$/tonne) 17 +12.1% 2050 2040 2086 2136 +4.2%

Tin (US$/tonne) 20 +24.7% 23325 21899 22503 22469 -3.7%

Steel (HRC, Europe, US$/tonne) 18 -2.8% 631.5 666.6 675.8 648.6 +2.7%

Iron Ore (Aust. Fine, US$/tonne) 19 -32.9% 111.2 114.6 117.9 113.1 +1.8%

Gold (US$/oz.) 22 +7.7% 1696 1787 1798 1787 +5.4%

Silver (US$/oz.) 23 +14.3% 32.21 34.20 34.20 33.91 +5.3%

Platinum (US$/oz.) 24 +16.3% 1606 1644 1679 1707 +6.3%

Palladium (US$/oz.) 25 +9.6% 697.0 680.0 709.8 737.0 +5.7%

Consensus ForecastsForecast %

change to Sep. 2013

NOTES, ABBREVIATIONS, WEIGHTS AND MEASURES

OVERVIEW

❒ All individual commodity forecasts on pages 6-25 are listed in descending order of their approximate 1-year percentage changeestimates. Consensus forecasts are mean averages of individual quarterly average forecasts.

❒ Historical price data in this publication has been provided by Commodity Research Bureau and other sources.

❒ Gross Domestic Product (GDP) is expressed in real (i.e. inflation-adjusted) terms. GDP and Industrial Production are expressedas average percentage changes over the previous calendar year unless otherwise indicated.

❒ 1 kilogram = 32.1507 troy ounces

❒ 1kilogram (kg) = 2.2046 pounds

❒ 1,000 kilograms = 1 metric tonne = 2204.6 pounds

❒ 1 long tonne = 1.016 metric tonnes = 2240 pounds

SUMMARY OF SELECT ENERGY & METALS CONSENSUS FORECASTS

❒ WTI – West Texas IntermediateEIA – Energy Information Agency (USA)LME – London Metal ExchangeLBMA – London Bullion Market AssociationLPPM – London Platinum and Palladium MarketNYMEX – New York Mercantile ExchangeCOMEX – New York Commodities ExchangeICE – Intercontinental Exchange

❒ e – Estimatena – Not Availablefob – Free On Boardbbl – Barreldltu – Dry long tonne unit (1/100 of a dry long tonne)dmtu – Dry metric tonne unit (1/100 of a dry metric tonne)MMBtu – Millions of British Thermal Units (Btu)rhs/lhs – right-hand scale/left-hand scale

❒ 1 short ton = 0.907 metric tonnes = 2000 pounds

❒ 1 barrel = 42 US gallons

❒ 10 Therms of Natural Gas = 1 million Btu = 1MMBtu

❒ 1 metric/long tonne unit (MTU/LTU) = 1/100 of a metric/long tonne

DECEMBER 2012

(continued from front page)

(Nominal, Quarterly Averages)1

1 Consensus price estimate of the current quarter for alumina, coal, steel and iron ore.

large portion of global commodity demand. Yet some of theanxiety associated with any correction may be overdone. Inaddition, the US Fed acted pre-emptively in mid-Decemberto head off a potential disaster with an extension to its bondbuying program, a practice that tends to debase the US dol-lar (FX forecasts, page 3). In the event that the White Houseand Congress reach a compromise to avert ‘broad’ tax hikesand spending cuts, a new sense of momentum may be in-jected into cyclically-led commodities. Other factors that are

likely to be supportive of energy and metals values in 2013and 2014 include earlier cutbacks in production by minersand factories to match lower demand expectations. If globalconsumption fares well, as has been the case in China, whichrebounded during much of Q4, price pressures may build asinventories diminish and supply conditions tighten.

On page 5 we feature Long-Term Forecasts for over 30commodities, covering the years 2012 to 2022.


specifications

DECEMBER 2012


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Consensus Forecasts From Surveys Of:

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2013 REAL GDP GROWTH

MACROECONOMIC OUTLOOK

Economic growth rates provide a valuable insight into the behaviour of energy and metals prices, with industrial produc-tion growth forecasts in particular giving an overview of the likely demand for many commodities. The forecasts below aretaken from the current issues of our publications Consensus Forecasts, Asia Pacific Consensus Forecasts,Eastern Europe Consensus Forecasts and Latin American Consensus Forecasts.

(%) (%)

1US $ percurrency unit

US$ perEuro

Global Growth OutlookWhile the sluggish economic performances that character-ised much of 2012 are likely to remain a feature of 2013, theoutlook does not seem as dim as it was a few months ago.Sovereign debt risks have been partly absorbed by Euro-pean Central Bank intervention and a currency union exit forGreece is looking less likely, following its recent rescue pack-age from Brussels. The shape of a deal to avert the US fiscalcliff has also started to emerge in recent days, even thoughnegotiations between the Democrats and the Republicans willprobably go down to the wire. Clearly, political paralysis doesnot augur well for investor sentiment and critics warn of leg-islative shackles to the reform agenda of the Obama admin-istration further down the line as efforts are made to trim the

2013 INDUSTRIAL PRODUCTION GROWTH

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Japaneseyen per US$

Source: Foreign Exchange Consensus

Forecasts, December 10, 2012

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Japan (lhs) China (rhs)

Euro Zone (lhs)

Dec. 10

ConsensusForecasts

1 Country weights available to qualified subscribers upon request.

REAL GDP GROWTH(% change on previous year)

2009 2010 2011 2012 2013United States -3.1 2.4 1.8 2.2 1.9China 9.2 10.4 9.3 7.7 8.1Japan -5.5 4.7 -0.5 1.8 0.6Euro zone -4.3 1.9 1.5 -0.5 -0.1

World 2.0 4.0 3.1 2.5 2.6

ForecastsConsensus INDUSTRIAL PRODUCTION GROWTH

(% change on previous year)

2009 2010 2011 2012 2013United States -11.4 5.4 4.1 3.6 1.9China 11.0 15.7 13.9 10.1 11.1Japan -21.8 16.6 -2.4 -0.6 -0.5Euro zone -14.9 7.3 3.4 -2.1 -0.1

World -7.4 9.3 5.0 2.4 3.2

ConsensusForecasts

1

ConsensusForecasts

EXCHANGE RATES vs. US$

End Mar 2013

End Dec 2013

% change from spot

End Dec 2014

Euro¹ 1.293 1.276 1.258 -2.7 1.255

Japanese yen 82.34 81.79 83.49 -1.4 85.47

Australian dollar¹ 1.050 1.023 1.000 -4.7 0.968

Chinese renminbi 6.235 6.249 6.158 +1.2 6.068Canadian dollar 0.987 0.989 0.985 +0.2 1.008Brazilian real 2.080 2.077 2.057 +1.1 2.061Indian rupee 54.52 53.51 52.71 +3.4 51.15

Consensus ForecastsSpot Rate

Government Policy Stance Affects Yen OutlookThe yen suffered a sharp correction in October as the economyslid back into recession in Q3, while tensions between Tokyoand Beijing were exacerbated by a territorial dispute. In addi-tion, an early election (lower house) just before our Decem-ber survey date and subsequent landslide victory for the op-

mountain of US debt. Assuming that an abrupt contraction inAmerican demand can be avoided next year, the consensusis predicting that the US will expand 1.9%, compared with anestimated 2.2% in 2012. In Asia, a September collapse inindustrial production in Japan caused forecasts for itseconomy to plummet (charts above). October and Novem-ber proved to be better months and the new government(formed just after our survey date) looks likely to bolster publicspending to prevent another return to recession. The recov-ery, though, will continue to be constrained by a dependenceon exports and significant demographic issues. In contrast,growth forecasts for China appear to have past a trough,largely reflecting stimulus measures from Beijing and a re-cent rebound in manufacturing output.

position Liberal Democratic party (which secured a two-thirdssuper majority) has opened the door to a significant changein monetary policy. The Bank of Japan is under intense politi-cal pressure to raise its inflation target (currently 1%) andreduce the value of the yen, which is forecasted to depreci-ate 4.2% over the next twelve months (consensus).

DECEMBER 2012


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The RBA Non-Rural Commodity Price Index is asub-index of the RBA’s Headline Index of CommodityPrices. The index uses an Australian fiscal base year (July‘08-June ‘09). The RBA Non-Rural Commodity Price Indexweights major minerals (list above) according to their shareof Australian export values. Oil is excluded while liquifiednatural gas (LNG) is included (it is some 7% of the index,but is not included in Energy & Metals Consensus Fore-casts calculations, as we do not survey for LNG forecasts).

COMMODITY PRICE INDICES

Commodity price indices are useful aggregates of individual commodity price trends. We focus here on two commodity priceindices: The Economist Base Metals Index (which weights the prices of major base metals according to their share ofworld trade in 2005) and the Reserve Bank of Australia (RBA) Non-Rural Commodity Price Index (which weights theprices of major minerals according to their share of Australian exports in 2008/2009). Both indices are expressed as US$prices in a given base year and track the performance of their particular subset of commodities. In addition to showinghistorical data from the two indices, we also show consensus forecasts for both over the next ten quarters. These arecalculated from weighting consensus commodity price forecasts from this edition’s survey. In the first two charts below, wealso show the highest and lowest projections over the forecast horizon in order to illustrate the range of forecasts.

RBA Non-Rural Commodity Price Index(US$ price index, Fiscal Year 2008/09 = 100)

The Economist Base Metals Index(US$ price index, 2005=100)

The Economist Base Metals Index is a sub-index ofthe headline Economist Commodity Price Index, containingsix base metals: Aluminium, Copper, Lead, Nickel, Tin andZinc. The index base year is 2005 =100, and the headlineindex is available in sterling and euros, as well as US dol-lars. It is published on a weekly basis. Energy & MetalsConsensus Forecasts then converts this week-by-week datainto quarterly averages and calculates the index forecastsby using our panellists’ projections for the individual metals.

Changes in the Consensus:RBA Non-Rural Commodity Price Index

Weights By Share of World Trade:Aluminium (47%) Zinc (7%)Copper (32%) Lead (3%)Nickel (8%) Tin (3%)

Weights By Share of Aust. Export Values:Coking Coal (21%) Copper (4%)Steaming Coal (14%) Nickel (4%)Gold (13%) Zinc (2%)Iron Ore Lump (13%) Lead (1%)Aluminium (11%)Alumina (10%)[LNG (7%)]

Recent Historical Data and Projections Using Consensus Forecasts

Changes in the Consensus:The Economist Base Metals Index

ConsensusForecasts

2012 2013 2014 2015

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Economist Base Metals Index 165.5 153.9 149.7 147.7 153.0 155.9 157.5 158.8 163.7 164.4 164.5 165.4 168.2

RBA Non-Rural Commodity 137.6 132.7 125.9 126.4 130.7 132.4 133.8 134.3 137.0 137.2 136.8 136.8 137.3

Price Index

ConsensusForecasts

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Dec2012 Survey

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Historical Data

Aug 2012 Survey

Oct 2012 Survey

Dec 2012 Survey

(all index values are quarterly averages)

DECEMBER 2012


2011 2012 2013 2014 2015 2016 2017 Nominal Real

Crude Oil - WTI 94.92 94.62 93.82 99.43 99.8 102.7 103.7 106.1 95.38

- Brent 111.3 111.4 107.6 110.1 109.2 108.3 109.8 115.5 101.4

RBOB Gas (US) 2.843 2.940 2.676 2.763 3.020 3.280 3.315 na 3.530

Gas Oil (Europe) 938.8 954.7 899.0 891.3 1046 1100 1155 na 1300

Natural Gas - US 3.992 2.745 3.605 3.940 4.442 4.794 4.925 5.166 4.725

- UK, UK£ 0.589 0.590 0.628 0.638 0.677 0.629 0.656 0.707 0.632

Coking Coal 289.0 209.2 181.3 190.6 191.5 185.8 182.8 182.8 157.8

Steaming Coal 129.9 104.4 100.1 103.7 107.2 107.3 108.3 107.3 93.47

Uranium 57.23 50.03 52.49 62.49 68.46 70.41 71.57 70.45 60.84

Aluminium 2397 2039 2155 2320 2432 2495 2623 2525 2350

Alumina 377.8 315.6 329.9 354.5 372.7 387.7 390.7 400.8 363.8

Copper 8805 7952 8122 8055 7696 7396 7170 6433 5875

Nickel 22879 17588 18363 20556 21929 23040 23152 22110 20377

Lead 2400 2059 2265 2383 2556 2434 2359 2217 1924

Zinc 2188 1957 2109 2339 2529 2519 2471 2353 2027

Cobalt 17.56 14.14 13.86 14.73 14.88 15.02 15.10 15.11 13.19

Tin 26028 20952 22398 22623 22706 22176 22023 21462 17397

Manganese 6.046 4.922 5.371 5.744 5.983 6.036 5.945 6.424 4.896

Molybdenum 15.58 12.85 12.68 14.35 13.99 14.23 15.10 15.98 14.08

Rutile 901.5 2127 1985 1675 1347 1231 1133 1183 946.2

Ilmenite 128.9 290.1 258.2 222.8 208.5 198.4 191.3 202.2 161.2

Zircon 1977 2539 1944 1863 1752 1732 1719 1692 1483

Steel - HRC, Europe 791.3 669.3 658.3 661.9 655.9 653.9 656.8 767.3 652.2

- HRC, USA 775.7 675.3 681.3 708.4 658.3 654.4 648.3 701.8 596.5

- HRC, Asia 734.9 649.0 646.0 692.9 693.2 685.3 682.8 748.3 630.0

Iron Ore - Lump (Aust) 183.1 144.5 126.7 123.1 117.8 112.4 106.1 117.2 95.93

- Fine (Aust) 153.0 128.9 114.8 114.7 107.0 101.7 95.68 104.9 87.55

- Fine (Brz) 160.5 129.2 117.0 111.2 98.40 95.01 92.76 na 88.76

Gold 1573 1675 1794 1715 1620 1464 1410 1394 1220

Silver 35.12 31.19 34.00 31.30 27.55 25.14 24.66 23.77 19.96

Platinum 1723 1549 1692 1768 1840 1869 1906 1932 1801

Palladium 733.1 638.9 721.9 799.0 835.7 849.9 876.8 889.7 806.2

LONG-TERM FORECASTS

% Change Between 2012 and 2017 (Nominal Prices) % Change Between 2017 and Long-TermAverage (Nominal Prices)

Long-term price forecasts provide a foundation for expected returns from both existing production facilities and those underdevelopment. In addition to their annual forecasts for the years 2012 to 2017, the table below summarises our panel’sLong-Term 5-10 year average estimates (2018-2022) in nominal and real (inflation adjusted) 2012 dollar terms.


specifications

-30% -20% -10% 0% 10% 20% 30% 40%

Crude Oil (WTI)

Coking Coal

Steaming Coal

Aluminium

Copper

Nickel

Lead

Zinc

Steel (Europe)

Steel - (USA)

Iron Ore-Lump (Aus)

Iron Ore - Fine (Aus)

Gold

Silver

-15% -10% -5% 0% 5% 10% 15% 20%

Crude Oil (WTI)

Coking Coal

Steaming Coal

Aluminium

Copper

Nickel

Lead

Zinc

Steel (Europe)

Steel - (USA)

Iron Ore-Lump (Aus)

Iron Ore - Fine (Aus)

Gold

Silver

(US$ Nominal, Annual Averages)

Individual nominal forecasts are available in the Excel spreadsheet.

Long-Term(2018-2022 Average)

Consensus ForecastsUS$

Average

DECEMBER 2012


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Spot Jun 2013 Dec 2013 Jun 2014 Dec 2014

WTI Consensus Forecasts v Futures PricesPrices and Forecasts as of Survey Date

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Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 2012-20

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Brent - WTI spot price differential per barrel

Price on Survey Date:Brent: US$109.1/bblWTI: US$86.73/bbl

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CRUDE OIL

Crude Oil (Brent) Spot Price and Brent/WTI DifferentialUS$/barrel

West Texas Intermediate Crude Oil Forecasts, US$/barrel

Survey Date Spot Price(Dec. 17): US$109.1

Crude Oil Futures – March 2013 ContractsUS$/bbl, Daily High/Low/Close

US$

US$ Demand for oil futures (both Brent and WTI)rose last week, as an extension of quantita-tive easing by the US Federal Reserveweighed on the US dollar.The price of crude oil is likely to be held inrange, as investors await the outcome of ‘fis-cal cliff’ negotiations in Washington and re-view its effect on the economy in 2013.A recent upswing in the manufacturing sec-tor in China suggest that the underlying out-look for oil remains positive. The consensusis predicting a 9.5% rise in the value of WTIover the next four quarters.

WTI/Brent Differential Set to Narrow in 2013

US$

WTI, Daily Close,Mar. 2013 Contract (NYMEX)

Brent Crude Oil Forecasts, US$/barrel

Survey Date Spot Price(Dec. 17): US$86.73

1 Individual forecasts available in the Excel spreadsheet service.

Dec '12 Mar '13 Jun '13 Sep '13 % change Dec '13 Mar '14 Jun '14 Sep '14 Dec '14 Mar '15from spot

Energy InformationAdmin.,USA, WTI (Dec. 11)

NYMEX Futures(WTI)

Nominal, Quarterly Averages

Brent, Mar. 2013 Contract(ICE) Daily High/Low/

Close

Consensus (WTI)


Barclays Capital 117.00 119.00 130.00 126.00 15.5% 125.00 130.00 130.00 130.00 130.00 naHWWI 115.00 118.00 122.00 125.00 14.6% 125.00 127.00 130.00 132.00 130.00 128.00ANZ 113.63 116.00 119.00 119.00 9.1% 118.50 118.00 117.00 116.00 112.50 108.00Credit Suisse 105.00 110.00 115.00 115.00 5.4% 120.00 115.00 110.00 110.00 105.00 100.00GKI Research 110.00 112.00 115.00 115.00 5.4% 120.00 125.00 125.00 130.00 130.00 130.00Euromonitor International 111.65 112.74 114.36 114.79 5.2% 115.05 116.06 116.94 117.70 118.36 118.94Societe Generale 109.80 109.70 104.70 113.00 3.6% 112.30 na na na na naChina Int'l Capital Corp 112.00 110.00 108.00 112.00 2.7% 113.00 112.00 107.00 107.00 109.00 naBNP Paribas 111.00 120.00 113.00 111.00 1.7% 117.00 na na na na naBoA Merrill Lynch 111.00 108.00 110.00 110.00 0.8% 112.00 na na na na naBREE 110.00 110.00 110.00 110.00 0.8% 110.00 na na na na naStandard Bank 108.00 105.00 105.00 110.00 0.8% 110.00 na na na na naMacquarie Bank 105.00 105.00 103.00 107.00 -1.9% 110.00 110.00 112.00 118.00 122.00 116.00BIPE 100.00 102.00 104.00 106.00 -2.8% 110.00 na na na na naCIBC 105.00 101.00 102.00 106.00 -2.8% 107.00 107.00 108.00 108.00 109.00 naUBS 105.00 100.00 105.00 105.00 -3.8% 98.00 97.00 97.00 97.00 97.00 95.00Deloitte Access Economics 108.62 104.80 103.80 104.91 -3.8% 105.35 106.12 108.24 109.82 110.12 109.97Econ Intelligence Unit 110.00 108.00 98.50 102.50 -6.0% 106.00 106.00 105.00 102.00 105.00 106.00Oxford Economics 110.16 105.98 101.52 101.34 -7.1% 101.81 103.54 105.40 107.30 109.23 110.54Commonwealth Bank 108.00 105.00 103.00 101.00 -7.4% 99.00 98.48 98.93 98.22 99.13 100.93Cntr for Global Energy Std 110.30 105.10 102.60 100.30 -8.1% 104.20 na na na na naWilson HTM 100.00 100.00 100.00 100.00 -8.3% 100.00 100.00 100.00 100.00 100.00 105.00P K Verleger 110.00 60.00 65.00 70.00 -35.8% 75.00 80.00 82.50 85.00 85.00 na

Consensus (Mean) 108.96 106.41 106.72 108.04 -1.0% 109.31 109.45 109.56 110.50 110.71 110.70

High 117.00 120.00 130.00 126.00 125.00 130.00 130.00 132.00 130.00 130.00Low 100.00 60.00 65.00 70.00 75.00 80.00 82.50 85.00 85.00 95.00Standard Deviation 4.16 11.66 11.98 10.99 10.75 12.71 12.47 13.05 12.85 10.81

Consensus (Mean) 90.12 90.87 92.34 95.00 9.5% 97.05 98.17 99.11 99.89 100.53 101.91


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3.0

3.5

4.0

Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 2012

0

10

20

30

40

50


2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3.0

3.1

3.2


U.S. GASOLINE & HEATING OIL

RBOB Gasoline (US), Spot PriceUS$/gallon

RBOB Gasoline (US) Forecasts, US$/gallon, fobSurvey Date Spot Price(Dec. 17): US$2.692

RBOB/Heating Oil #2 Futures – Mar. 2013 Contracts (NYMEX)US$/gallon, Daily High/Low/Close

Futures Prices For RBOB and Heating OilPrices as of Survey Date

US$/gallon

US Crack SpreadUS$ per barrel

US$

US$

US$

Crude oil is refined into numerous saleable products including gaso-line and heating oil. The crack spread is used to estimate the profitabilityof refining the raw material. When the spread is positive, the price of therefined products is above that of crude oil, helping profitability. The chartabove shows a commonly used 3:2:1 crack spread, reflecting a ratio ofrefinery output of 2 barrels of RBOB gasoline and 1 barrel of heating oilfrom 3 barrels of WTI crude oil.

Consensus Forecasts for RBOB GasolinePrices and Forecasts as of Survey Date

US$/gallon

US$

1Reformulated Blendstock for Oxygenate Blending

1

RBOB remained under downward pressure inOctober and November, as the price of UScrude retreated. In addition, refineries restoredproduction after seasonal maintenance, whiledemand was affected by infrastructure dis-ruptions caused by Hurricane Sandy.An increase in inventories of the distilled motorfuel in early December and a reduction in theUS crack spread – a measure of profitabilityin the industry, graph left – have also contrib-uted to its price drop.Forecasts suggest that it will be difficult forgasoline to breach US$3.0/gallon in 2013.

Under US$3.0 per Gallon

Prior to July 2004, unleaded gasoline/regular non-oxygenated

Heating Oil #2, Daily Close,Mar. 2013 Contract

RBOB Gasoline,Mar. 2013 Contract,

Daily High/Low/Close

Consensus

Heating Oil #2NYMEX Futures



GKI Research 2.750 2.850 3.000 3.100 15.2% 3.150 3.150 3.150 3.200 3.200 3.200

BNP Paribas 2.790 2.900 3.020 3.020 12.2% 2.860 na na na na na

Societe Generale 2.710 2.730 2.730 2.870 6.6% 2.670 na na na na na

BoA Merrill Lynch 2.738 2.690 2.917 2.798 3.9% 2.690 na na na na na

Cntr for Global Energy Std 2.650 2.860 2.870 2.590 -3.8% 2.510 na na na na na

P K Verleger 2.650 1.622 1.915 1.920 -28.7% 1.949 2.100 2.350 2.500 2.450 na

Consensus (Mean) 2.715 2.609 2.742 2.716 0.9% 2.638 2.625 2.750 2.850 2.825 na

High 2.790 2.900 3.020 3.100 3.150 3.150 3.150 3.200 3.200 na

Low 2.650 1.622 1.915 1.920 1.949 2.100 2.350 2.500 2.450 na

Standard Deviation 0.056 0.490 0.418 0.429 0.402 0.742 0.566 0.495 0.530 na

RBOB NYMEXFutures

Energy InformationAdmin.,USA (Dec. 11)

RBOB NYMEXFutures

DECEMBER 2012


850

875

900

925

950

975


200

400

600

800

1000

1200

1400


750

850

950

1050


EUROPEAN GAS OIL

Gas Oil (Europe, Rotterdam) Forecasts, US$/tonneSurvey Date Spot Price(Dec. 17): US$927.3

Gas Oil, Rotterdam, Spot PriceUS$/tonne

Gas Oil & Heating Oil Futures – Mar. 2013 Contracts (ICE/NYMEX)US$/tonne, Daily High/Low/Close

US$

US$ Gas Oil Consensus Forecasts v Futures PricesPrices and Forecasts as of Survey Date

US$/tonne

US$

US Heating Oil and Gas Oil Futures PricesPrices as of Survey Date

880

900

920

940


US$/tonne

US$

Gas OilFutures (ICE)

WTI: Futures Market: NYMEX Low Sweet Crude Pricing: US$/bbl Contract Size: 1,000 bbl (42,000 gallons) Delivery Dates:Consecutive months for the first 6 years, June and Decemberfor the 7th to 9th years. Contracts Traded: 176,356,220 (2011).Brent: Futures Market: ICE (IntercontinentalExchange) Pricing:US$/bbl Lot Size: 1,000bbl (42,000 gallons) Delivery Options:72 consecutive months then June and December for a further 3years. Contracts Traded: 132,045,563 (2011) Page 6

RBOB Gasoline: Futures Market: NYMEX ReformulatedBlendstock for Oxygenate Blending Pricing: US$/gallon ContractSize: 1000 bbl (42,000 gallons) Delivery Dates: 36 consecutivemonths on a rolling basis. Contracts Traded: 31,129,256 (2011).

RBOB is a wholesale non-oxygenated blendstock traded in theNew York Harbor barge market that is ready for the addition of10% ethanol at the truck rack. Page 7

Heating Oil #2: Futures Market: NYMEX Pricing: US$/gallonContract Size: 1,000 bbl (42,000 gallons) Delivery Dates: 36Consecutive months Contracts Traded: 31,838,626 (2011).

The heating oil futures contract may also be used to hedge dieselfuel and jet fuel, both of which trade in the cash market at an oftenstable premium to New York harbor heating oil futures. Page 7

Gas Oil: Futures Market: ICE (IntercontinentalExchange)Pricing: US$/tonne Contract Size: 100 tonnes Delivery Dates:36 consecutive months, then quarterly to 48 months, then half-yearly to 60 months Contracts Traded: 65,774,151 (2011).

ICE Gasoil Futures are used as a pricing reference for distillatetrading in Europe and beyond.

OIL & DISTILLATE FUTURES SPECIFICATIONS DECEMBER 2012

Heating Oil, Daily Close,Mar. 2013 Contract

(NYMEX)



GKI Research 950.0 970.0 1050.0 1100.0 18.6% 1100.0 1090.0 1090.0 1100.0 1100.0 1150.0

Societe Generale 945.0 944.0 899.0 961.0 3.6% 964.0 na na na na na

BNP Paribas 969.0 1013.0 931.0 946.0 2.0% 991.0 na na na na na


Cntr for Global Energy Std 918.5 876.0 859.6 866.9 -6.5% na na na na na na

P K Verleger 900.0 552.9 571.0 608.4 -34.4% 658.5 700.0 675.0 675.0 700.0 na

Consensus (Mean) 941.4 883.9 872.0 901.8 -2.7% 938.2 895.0 882.5 887.5 900.0 na

High 969.0 1013.0 1050.0 1100.0 1100.0 1090.0 1090.0 1100.0 1100.0 na

Low 900.0 552.9 571.0 608.4 658.5 700.0 675.0 675.0 700.0 na

Standard Deviation 27.2 168.1 160.7 163.0 165.4 275.8 293.4 300.5 282.8 na

Gas Oil, Mar. 2013 Contract (ICE)Daily High/Low/Close

Gas OilFutures (ICE)

Consensus

US Heating Oil #2NYMEX Futures

DECEMBER 2012


3.00

3.25

3.50

3.75

4.00

4.25

4.50

Spot Jun 2013 Dec 2013 Jun 2014 Dec 20140.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 20120.00.20.40.60.81.0

1.21.41.61.82.0

US Natural Gas (lhs)

UK Natural Gas (rhs)

US Natural Gas (Henry Hub); UK Natural GasUS$/MMBtu; UK£/therm

Natural Gas (US, Henry Hub) Forecasts, US$/MMBtuSurvey Date Spot Price(Dec. 17): US$3.213

NATURAL GAS

3.0

3.2

3.4

3.6

3.8

4.0

4.2

Jun 2012 Jul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 20120.52

0.56

0.60

0.64

0.68

0.72

Natural Gas FuturesUS$/MMBtu, Daily High/Low/Close

US Natural GasConsensus Forecasts v Futures Prices

Prices and Forecasts as of Survey Date

US$/MMBtu

US$/MMBtu

US$/MMBtu UK£/therm

UK Natural Gas Forecasts, UK£/thermSurvey Date Spot Price(Dec. 17): UK£0.680

UK£/therm

US$

Milder weather in early December has lim-ited the advance in US natural gas, whichtends to increase in value during the wintermonths due to higher heating fuel demand.Rigs drilling dropped during the course of2012, but the shale gas revolution that hasbrought a glut in supply (and concerns aboutstorage capacity) continues to keep a lid onprices. Future movements will hinge on de-mand from industrial and power companiesseeking to replace coal and exports.

Positive Medium Term Price Outlook

NYMEX Mar. 2013 Futures,Daily High/Low/Close (lhs)

NYMEXFutures

Consensus


UK Natural Gas,1-Month Forward

Close (UK£/therm, rhs)


BNP Paribas 3.400 3.600 3.650 4.150 29.2% 4.650 na na na na naMacquarie Bank na 3.200 3.500 4.150 29.2% 4.000 4.150 4.000 4.200 4.000 4.500Wilson HTM 3.500 3.750 3.750 4.000 24.5% 4.000 4.250 4.250 4.500 4.500 4.750Barclays Capital 3.400 3.500 3.500 3.800 18.3% 4.000 na na na na naCredit Suisse 3.100 3.600 3.400 3.800 18.3% 4.000 4.400 4.200 4.200 4.400 4.500UBS 3.427 3.750 3.750 3.750 16.7% 3.750 4.750 4.750 4.750 4.750 5.500BoA Merrill Lynch 3.600 3.600 3.400 3.700 15.2% 4.300 na na na na naEuromonitor International 3.408 3.546 3.649 3.694 15.0% 3.725 3.763 3.787 3.803 3.814 3.822CIBC 3.400 3.400 3.450 3.550 10.5% 3.600 3.650 3.700 3.800 3.850 naSociete Generale 3.830 3.600 3.160 3.500 8.9% 3.800 na na na na naEcon Intelligence Unit 3.240 3.100 3.300 3.420 6.4% 3.850 3.950 4.000 4.400 3.350 3.240GKI Research 3.300 3.300 3.300 3.400 5.8% 3.500 3.500 3.500 3.600 3.800 3.800Commonwealth Bank 3.112 3.258 3.328 3.400 5.8% 3.786 3.827 3.729 3.799 4.124 4.129P K Verleger 3.300 3.000 2.750 3.000 -6.6% 3.500 3.300 2.750 2.750 3.000 na

Consensus (Mean) 3.386 3.443 3.420 3.665 14.1% 3.890 3.954 3.867 3.980 3.959 4.280



GKI Research 0.700 0.700 0.700 0.700 2.9% 0.750 0.750 0.800 0.800 0.850 0.850UBS 0.634 0.675 0.614 0.607 -10.8% 0.655 0.653 0.484 0.481 0.637 0.635Barclays Capital 0.650 0.700 0.600 0.600 -11.8% 0.700 na na na na naCredit Suisse 0.650 0.650 0.580 0.580 -14.7% 0.680 0.730 0.630 0.630 0.730 0.660Societe Generale 0.660 0.650 0.550 0.550 -19.1% 0.700 na na na na naBNP Paribas 0.640 0.610 0.500 0.490 -27.9% 0.530 0.550 0.500 0.480 0.510 0.560

Consensus (Mean) 0.656 0.664 0.591 0.588 -13.6% 0.669 0.671 0.604 0.598 0.682 0.676


Energy InformationAdmin., USA (Dec. 11)

DECEMBER 2012


0

50

100

150

200

250


Australian Steaming Coal - Consensus

COAL

0

50

100

150

200

250

300

350


Australian Steaming Coal (Monthly Spot Prices)

Australian Coking Coal (Quarterly Contract Prices)

Australian Steaming Coal (Quarterly Contract Prices)

Australian Coking Coal Forecasts (Quarterly Contract), US$/metric tonne

Australian Steaming Coal Forecasts (Quarterly Contract), US$/metric tonne

Coking Coal and Steaming Coal PricesUS$/metric tonneUS$

Coal – Energy Information Agency (US)World Demand Forecasts (Sep. 2011)

2007 2008 2015 2020 2025 2030 2035Total OECD Consumption

(Quadrillion Btu) 47.8 46.8 42.6 43.1 44.6 45.3 46.7

Total World Consumption

(Quadrillion Btu) 133 139 157 165 180 195 209

Consensus Forecasts and Futures PricesPrices and Forecasts as of Survey Date

0

5000

10000

15000

20000

Jan2003

Jan2004

Jan2005

Jan2006

Jan2007

Jan2008

Jan2009

Jan2010

Jan2011

Jan2012

Baltic Capesize Index of Shipping Rates

US$/tonne

Consensus Price forQ4 2012: US$170.0


free-on-board Newcastle, Australia

Shipping costs can addUS$24-34/MT to the deliveredcost of coal on some routes.

Central Appalachian US Coal Futures(US$/short ton, NYMEX)


Dec '12 Mar '13 Jun '13 Sep '13 % change Dec '13 Mar '14 Jun '14 Sep '14 Dec '14 Mar '15from latest estimate

Macquarie Bank 170.0 195.0 210.0 210.0 23.5% 190.0 205.0 215.0 205.0 200.0 215.0Wilson HTM 170.0 190.0 200.0 210.0 23.5% 190.0 190.0 211.0 212.0 214.0 207.0Royal Bank of Canada 170.0 170.0 190.0 200.0 17.6% 200.0 180.0 180.0 180.0 180.0 180.0Standard Bank 170.0 175.0 185.0 195.0 14.7% 195.0 na na na na naANZ 170.0 165.0 180.0 190.0 11.8% 200.0 200.0 195.0 195.0 190.0 190.0Investec na 172.5 172.5 190.0 11.8% 190.0 200.0 200.0 210.0 210.0 200.0Morgan Stanley 170.0 180.0 185.0 185.0 8.8% 190.0 190.0 190.0 190.0 190.0 naBoA Merrill Lynch 170.0 170.0 175.0 180.0 5.9% 185.0 na na na na naDeloitte Access Economics 170.0 170.0 180.0 180.0 5.9% 190.0 190.0 200.0 200.0 200.0 200.0Credit Suisse 170.0 170.0 170.0 175.0 2.9% 175.0 180.0 180.0 185.0 185.0 190.0BREE 170.0 171.0 171.0 171.0 0.6% 171.0 na na na na naUBS 170.0 165.0 175.0 170.0 0.0% 160.0 170.0 160.0 155.0 155.0 150.0Commonwealth Bank 170.0 155.0 170.0 160.0 -5.9% 165.0 175.0 180.0 185.0 190.0 198.0

Consensus (Mean) 170.0 173.0 181.8 185.8 9.3% 184.7 188.0 191.1 191.7 191.4 192.2



Euromonitor International 90.39 96.63 104.06 109.25 11.8% 113.02 116.43 119.12 121.23 122.91 124.23ANZ 115.00 115.00 105.00 105.00 7.4% 105.00 105.00 110.00 110.00 110.00 110.00UBS 81.57 105.00 105.00 105.00 7.4% 105.00 105.00 98.00 98.00 98.00 98.00Wilson HTM 95.00 98.00 102.00 102.00 4.4% 105.00 105.00 112.00 112.00 110.00 112.00Societe Generale 103.70 99.20 100.30 100.80 3.1% 102.30 na na na na naBREE 115.00 115.00 100.00 100.00 2.3% 100.00 100.00 na na na naCommonwealth Bank 85.00 90.00 95.00 100.00 2.3% 103.00 100.00 97.00 97.00 100.00 100.00Credit Suisse 90.00 95.00 95.00 100.00 2.3% 100.00 105.00 105.00 110.00 110.00 118.00Econ Intelligence Unit 83.00 88.00 92.00 100.00 2.3% 105.00 108.00 107.00 105.00 100.00 100.00Royal Bank of Canada 115.00 115.00 100.00 100.00 2.3% 100.00 100.00 90.00 90.00 90.00 90.00Standard Bank 87.00 91.00 96.00 100.00 2.3% 104.00 na na na na naMacquarie Bank 98.00 105.00 98.00 98.00 0.3% 98.00 105.00 100.00 95.00 100.00 100.00BoA Merrill Lynch 85.00 95.00 90.00 96.00 -1.8% 99.00 na na na na naInvestec 115.00 105.00 105.00 95.00 -2.8% 95.00 100.00 100.00 105.00 105.00 107.50Morgan Stanley 115.00 115.00 95.00 95.00 -2.8% 95.00 97.50 97.50 97.50 97.50 naBarclays Capital 90.00 92.00 89.00 90.00 -7.9% 93.00 na na na na na

Consensus (Mean) 97.73 101.24 98.21 99.75 2.1% 101.40 103.91 103.24 103.70 103.95 105.97


Australian Coking Coal– Consensus

DECEMBER 2012


0

25

50

75

100

125

150


40

42

44

46

48

50

52

54


Uranium futures started trading onNYMEX in May 2007. Volume is thindue to off-market trading and itsspecialised and limited use.

France 77%Germany 24%Japan 24%USA 20%UK 14%

42

46

50

54

58

62

66

70


Consensus

Uranium U3O8, Spot PriceUS$/lb

Uranium U3O8 Forecasts, US$/lbSurvey Date Spot Price(Dec. 17): US$43.50

URANIUM

US$

Consensus Forecasts v Futures PricesPrices and Forecasts as of Survey Date

US$/lb

US$

Producers(% share of World)

USA 31%France 16%Japan 9%Russia 6%S. Korea 6%

Nuclear power as a % oftotal domestic electricity

Installed Capacity(Gigawatts)

USA 101France 63Japan 48Russia 23Germany 20

NYMEX Futures

Uranium Futures – March 2013 Contract (NYMEX)US$/lb, Closing PriceUS$

World Nuclear Electricity Production (2008) Uranium futures began trading on NYMEX in May2007 in an attempt to introduce greater price trans-parency. Volumes and liqudity are currently very low(see chart above left).Futures Market: NYMEX Pricing: US$/lb ContractSize: 250lbs Trading Months: 60 consecutivemonths. Settlement price: The final settlement priceis the spot-month end price published by UxC.

Waiting For Turnaround in PricesUranium plummeted to almost US$40/lb inearly November, hit by low demand from coun-tries stuck in stagnation, notably Japan, anduncertainty regarding long-term nuclear plansin Germany after the Fukushima crisis.Miners have reacted to the slump in price byscaling back capital investment and cuttingproduction of the radioactive metal.Despite the current overhang, most observersremain bullish about the 2013/2014 outlook,reflecting demand from emerging countries,specifically China, India and Russia.



Wilson HTM 55.6 65.0 65.0 65.0 49.4% 65.0 70.0 70.0 70.0 70.0 67.5

Credit Suisse 48.0 52.0 55.0 58.0 33.3% 60.0 65.0 65.0 65.0 65.0 70.0

Commonwealth Bank 51.0 52.0 54.0 57.0 31.0% 60.0 62.0 66.0 71.0 72.0 74.0


Morgan Stanley 51.0 52.5 54.5 55.0 26.4% 56.5 60.0 60.0 60.0 60.0 na

ANZ 46.3 48.0 51.5 54.0 24.1% 56.5 59.0 61.0 63.5 65.0 66.5

Investec 49.0 50.0 50.0 50.0 14.9% 50.0 60.0 60.0 60.0 60.0 65.0

Macquarie Bank 50.0 50.0 50.0 50.0 14.9% 50.0 55.0 55.0 65.0 65.0 65.0

Royal Bank of Canada 48.7 48.8 48.8 48.8 12.1% 48.8 65.0 65.0 65.0 65.0 75.0

BREE 43.0 47.0 47.0 47.0 8.0% 47.0 na na na na na

UBS 43.2 44.0 44.0 46.0 5.7% 46.0 50.0 50.0 55.0 55.0 60.0

Consensus (Mean) 48.1 50.4 51.8 53.3 22.4% 54.5 60.7 61.3 63.8 64.1 67.9

High 55.6 65.0 65.0 65.0 65.0 70.0 70.0 71.0 72.0 75.0

Low 43.0 44.0 44.0 46.0 46.0 50.0 50.0 55.0 55.0 60.0

Standard Deviation 4.0 5.6 5.5 5.6 6.4 5.9 6.1 5.0 5.2 5.0

DECEMBER 2012


1000

1500

2000

2500

3000

3500


Aluminium 3-Month Forward Prices and Warehouse Stocks, LMEUS$/metric tonne, Daily High/Low/Close

1750

1850

1950

2050

2150

2250


4800

4900

5000

5100

5200

5300

2000

2100

2200

2300

2400

2500



LME Futures

US$/metric tonne

ALUMINIUM

Aluminium Spot Price, London Metal Exchange (LME)US$/metric tonne

Aluminium Forecasts, US$/metric tonne, fobSurvey Date Spot Price(Dec. 17): US$2106

US$

US$

US$

tonnes,000s

Aluminium Production (2009)

Aluminium: Futures Market: LME Pricing: US$/tonne Contract Size: 25 tonnes Delivery Dates:Daily for cash to 3 month contracts, Wednesdaysfor 3 month to 6 month contracts; then every thirdWednesday for 7 months out to 123 months. Con-tracts Traded: 59,558,330 (2011).

Production mn tn % of world

1. China 12.84 34.8%2. Russia 3.82 10.3%3. Canada 3.03 8.2%4. Australia 1.94 5.3%5. USA 1.73 4.7%

World 36.90

Consumption mn tn % of world

1. China 12.41 32.8%2. USA 5.62 14.9%3. Japan 2.25 6.0%4. Germany 1.95 5.2%5. S. Korea 1.31 3.5%

World 37.80

Aluminium prices fell below US$1900 pertonne in October, mainly due to a supply glutand a reduction in demand. However, sincethe middle of November – buoyed by improve-ments in the economies of its two biggestconsumers, China and the US – prices haverallied above US$2100.Growth in their respective auto industries haslifted sentiment, as has an upturn in the Chi-nese economic outlook. Any future pricegains, however, may be affected by uncer-tainties surrounding the upcoming US ‘fiscalcliff’ and possible political and economic dif-ficulties in Europe next year.

Consensus

Consumption (2008)

LME WarehouseStocks, Daily (rhs)

3-Month ForwardDaily High/Low/Close (lhs)



Commonwealth Bank 2025 2100 2150 2285 8.5% 2300 2320 2340 2365 2380 2425Oxford Economics 1999 2072 2175 2282 8.4% 2334 2339 2367 2376 2386 2400HWWI 2100 2150 2220 2250 6.8% 2400 2450 2450 2500 2550 2550UBS 1971 2249 2161 2249 6.8% 2249 2505 2395 2395 2505 2616Wilson HTM 1940 2138 2138 2249 6.8% 2249 2337 2337 2359 2359 2447ANZ 2045 2039 2138 2248 6.8% 2315 2326 2304 2271 2215 2182Standard Bank 2150 2190 2230 2230 5.9% 2250 na na na na naBNP Paribas 1970 2075 2150 2225 5.7% 2350 2425 2425 2425 2425 naEuromonitor International 1997 2060 2142 2209 4.9% 2268 2331 2385 2432 2474 2509Investec 2006 2094 2094 2205 4.7% 2205 2315 2315 2425 2425 2646Royal Bank of Canada 2038 2205 2205 2205 4.7% 2205 2205 2205 2205 2205 2315Credit Suisse 2020 2100 2150 2200 4.5% 2250 2300 2350 2350 2400 2400Econ Intelligence Unit 1988 2025 2125 2200 4.5% 2250 2235 2200 2190 2200 2250Morgan Stanley 2020 2100 2150 2200 4.5% 2250 2300 2350 2350 2400 2400Metal Bulletin Research 2050 2100 2140 2180 3.5% 2200 2260 2320 2330 2340 2355IHS Global Insight 1999 2129 2175 2172 3.1% 2171 2278 2231 2237 2244 2278Prometeia 2009 2100 2140 2171 3.1% 2167 2214 2212 2231 2225 2232CPM Group 2015 2040 2090 2130 1.1% 2150 2190 2225 2245 na naSociete Generale 1960 2150 2225 2125 0.9% 2240 na na na na naBREE 1985 2118 2118 2118 0.6% 2118 na na na na naMacquarie Bank 2000 2101 2149 2101 -0.2% 2200 2299 2299 2299 2299 2500BoA Merrill Lynch 2000 2100 2250 2100 -0.3% 2000 na na na na naChina Int'l Capital Corp 2000 2030 2030 2040 -3.1% 2030 2020 2010 2020 2020 naBIPE 1860 1920 1970 2020 -4.1% 2110 na na na na naBarclays Capital 1950 1900 1950 2000 -5.0% 2100 2450 2450 2450 2450 na

Consensus (Mean) 2004 2091 2139 2176 3.3% 2214 2305 2308 2323 2342 2407

High 2150 2249 2250 2285 2400 2505 2450 2500 2550 2646Low 1860 1900 1950 2000 2000 2020 2010 2020 2020 2182Standard Deviation 54 76 72 78 95 108 105 113 131 136

Price Rally Set to Slow

DECEMBER 2012


-300

-100

100

300

500

700

900


1000

1500

2000

2500

3000


0

100

200

300

400

500

600

700


ALUMINA & ALUMINIUM ALLOY

Alumina, Metallurgical Grade, Spot PriceUS$/metric tonne

Alumina Forecasts, US$/metric tonne, fobConsensus Price forQ4 2012: US$315.4

Aluminium Alloy, Spot Price, LMEUS$/metric tonne

World Production of Alumina (2009, world

total was 76.8 million tonnes)

Aluminium vs Aluminium Alloy, Spot Price DifferentialUS$/metric tonne

Price on SurveyDate: US$1905

US$

US$ US$

1. China 31.0%2. Australia 26.0%3. Brazil 11.2%4. USA 4.0%

% of world totalProducer

Alumina is derived from bauxite ore and is used to produce primary alu-minium at a ratio of two tonnes of alumina per tonne of aluminium. Prices canbe linked to the LME primary aluminium price.

Aluminium Alloy prices provide a reference basis for the secondary alu-minium market. Futures Market: LME Pricing: US$/tonne Contract Size:20 tonnes Delivery Dates: Daily for cash to 3 month contracts, Wednesdaysfor 3 month to 6 month contracts; then every third Wednesday for 7 monthsout to 27 months. Contracts Traded: 610,935 (2011).

Alumina Consensus ForecastsPrices and Forecasts as of Survey Date

US$/metric tonne

US$

Consensus


310

320

330

340

350

360

370

380



Credit Suisse 330.0 350.0 350.0 375.0 18.9% 375.0 400.0 400.0 400.0 400.0 415.0

Commonwealth Bank 330.0 340.0 350.0 354.7 12.4% 356.2 367.5 384.0 386.3 388.7 398.8

Royal Bank of Canada 310.3 352.7 352.7 352.7 11.8% 352.7 374.8 374.8 374.8 374.8 393.5

ANZ 317.0 311.9 324.9 341.7 8.3% 347.1 348.8 345.5 340.5 332.2 327.3

Morgan Stanley 320.0 323.7 330.1 336.6 6.7% 343.1 350.2 350.2 350.2 350.2 na

BREE 325.0 319.0 319.0 319.0 1.1% 319.0 na na na na na

Investec 301.0 314.0 314.0 309.0 -2.0% 309.0 319.0 319.0 335.0 335.0 365.0

UBS na 303.6 291.7 303.6 -3.8% 303.6 338.2 323.3 323.3 338.2 353.1

Macquarie Bank 290.0 300.0 310.0 300.0 -4.9% 320.0 330.0 330.0 330.0 330.0 360.0

Consensus (Mean) 315.4 323.9 326.9 332.5 5.4% 336.2 353.6 353.3 355.0 356.1 373.2

High 330.0 352.7 352.7 375.0 375.0 400.0 400.0 400.0 400.0 415.0

Low 290.0 300.0 291.7 300.0 303.6 319.0 319.0 323.3 330.0 327.3


DECEMBER 2012


7900

8000

8100

8200



Copper, Spot Price, London Metal Exchange (LME)US$/metric tonne

Copper, Grade A, Forecasts, US$/metric tonne, fobSurvey Date Spot Price(Dec. 17): US$8063

COPPER

7000

7500

8000

8500


215

230

245

260

275

290

305

Copper 3-Month Forward Prices and Warehouse Stocks, LMEUS$/metric tonne, Daily High/Low/Close

100020003000400050006000700080009000

1000011000


US$

US$

US$

tonnes,000s

World Production of Copper (2009, world productionwas 15.8 million tonnes)

1. Chile 34.1%2. Peru 8.1%3. USA 7.6%4. China 6.5%

Mine Production

1. China 21.2%2. Chile 12.2%3. Japan 10.4%4. India 5.6%

Smelter Production% of world total % of world total

Copper: Futures Market: LME Pricing: US$/tonneContract Size: 25 tonnes Delivery Dates: Daily forcash to 3 month contracts, Wednesdays for 3 monthto 6 month contracts; then every third Wednesdayfor 7 months out to 123 months. Contracts Traded:34,537,310 (2011). US Futures Market: COMEXPricing: USc/lb Lot Size: 25,000lbs Deliverability:24 consecutive months.

Sharp Increase in LME Stocks in December

US$/metric tonneConsensus


3-Month Forward, DailyHigh/Low/Close (lhs)


LME Futures

COMEXFutures


HWWI 8300 8400 8500 9100 12.9% 9500 9600 9800 10000 9800 9800Econ Intelligence Unit 7959 8268 8378 8819 9.4% 8819 9260 9371 9481 9260 8819ANZ 8074 8101 8432 8707 8.0% 8873 8983 8983 8762 8487 8156Prometeia 7933 8146 8365 8568 6.3% 8608 8669 8552 8521 8110 8056Metal Bulletin Research 8100 8400 8800 8550 6.0% 8200 8800 9400 8500 8700 9000BoA Merrill Lynch 7950 8100 8300 8500 5.4% 7750 na na na na naEuromonitor International 8021 7979 8156 8392 4.1% 8624 8865 9071 9246 9395 9521Commonwealth Bank 7850 8050 8250 8300 2.9% 8314 8351 8340 8319 8300 8250Royal Bank of Canada 7857 8267 8267 8267 2.5% 8267 8267 8267 8267 8267 7165Wilson HTM 7716 8223 8223 8201 1.7% 8201 8157 8157 8091 8091 7804Investec 7937 7937 7937 8157 1.2% 8157 8377 8377 8377 8377 7716IHS Global Insight 7908 8228 8170 8111 0.6% 8001 8067 7275 6762 6318 6310BIPE 7650 7850 8000 8050 -0.2% 8050 na na na na naOxford Economics 7928 8033 8024 8040 -0.3% 8080 8161 8281 8437 8606 8664Macquarie Bank 8199 8250 8100 8000 -0.8% 7899 7749 7749 7599 7599 7599Barclays Capital 7900 7950 8100 8000 -0.8% 7650 7500 7500 7500 7500 naCredit Suisse 7800 8000 8300 8000 -0.8% 7700 7600 7500 7500 7400 7000Morgan Stanley 7800 8000 8300 8000 -0.8% 7700 7600 7500 7500 7400 7000CPM Group 7930 8100 8300 7900 -2.0% 7645 7500 7555 7400 na naStandard Bank 8060 8150 7700 7850 -2.6% 8100 na na na na naChina Int'l Capital Corp 7800 7840 8250 7800 -3.3% 7750 7160 7680 7100 7080 naSociete Generale 7778 8200 8400 7800 -3.3% 7500 na na na na naBREE 7842 7675 7675 7675 -4.8% 7675 na na na na naBNP Paribas 7915 8275 7975 7625 -5.4% 7425 7250 7250 7250 7250 naUBS 7898 8157 7716 7275 -9.8% 6834 5952 5952 5732 5732 6283

Consensus (Mean) 7924 8103 8185 8148 1.0% 8053 8093 8128 8017 7983 7946


Copper prices declined in October and earlyNovember, slipping below US$7600/metrictonne. However, they have since rallied onnews of improvements in the US and Chi-nese economies, climbing to US$8063 on De-cember 17 (daily chart, left).US manufacturing looks likely to end 2012on a positive note, which bodes well for cop-per prices. However, recent uncharacteristicincreases in copper stocks held at LME ware-houses have led to some doubts about 2013demand for the metal.

DECEMBER 2012


Nickel prices are closely related to demand fromstainless steel producers who account for abouttwo-thirds of total demand. Futures Market: LMEPricing: US$/tonne Contract Size: 6 tonnes Deliv-ery Dates: Daily for cash to 3 month contracts,Wednesdays for 3 month to 6 month contracts; thenevery third Wednesday for 7 months out to 63months. Contracts Traded: 8,056,421 (2011).

16000

17000

18000

19000

20000

21000

22000


NICKEL

15000

16000

17000

18000

19000

20000


Nickel Spot Price, London Metal Exchange (LME)US$/metric tonne

Nickel Forecasts, US$/metric tonne, fobSurvey Date Spot Price(Dec. 17): US$17605

Nickel 3-Month Forward Prices and Warehouse Stocks, LMEUS$/metric tonne, Daily High/Low/Close


US$/metric tonne

0

10000

20000

30000

40000

50000

60000


US$

US$ tonnes

US$

Nickel Production and Consumption by World Share (2008)Production 000s tn % of world

1. Russia 264 19.3%2. Canada 176 12.9%3. China 171 12.5%4. Japan 156 11.4%5. Australia 108 7.9%

World 1368

Consumption 000s tn % of world

1. China 305 23.6%2. Japan 185 14.3%3. USA 121 9.3%4. Germany 90 6.9%5. S. Korea 73 5.6%

World 1295

Another Surplus Year in 2013

Consensus


3-Month ForwardDaily High/Low/

Close (lhs)

LME Futures


Nickel traded close to US$16000 per tonneduring the first half of November, but ralliedtowards the end of the month, reachingUS$17605 on December 17.Prices were buoyed by positive manufactur-ing developments in the US and China, withthe latter posting its first expansionary PMIreading in November for a year.Future gains will be constrained by high lev-els of supply around the world, with outputbuoyed by the Ambatovy mine in Madagas-car and the 2013 opening of the Koniambomine in New Caledonia.


Euromonitor International 17646 19768 21936 23696 34.6% 25136 26425 27485 28355 29069 29655HWWI 18000 19000 20000 22000 25.0% 23000 23000 24000 24000 22000 22000Metal Bulletin Research 17040 17000 18000 21000 19.3% 23000 21000 22500 22000 23000 22000Commonwealth Bank 17250 18250 20000 20519 16.5% 20054 20200 20601 20485 20661 21037Investec 17857 18739 18739 20282 15.2% 20282 20944 20944 23148 23148 20944Royal Bank of Canada 16955 19290 19290 19290 9.6% 19290 20944 20944 20944 20944 22046ANZ 17811 17525 18186 19069 8.3% 20171 20611 20391 20170 19950 19840Credit Suisse 18000 18500 19000 19000 7.9% 19000 19500 20000 20000 20500 21000Morgan Stanley 18000 18500 19000 19000 7.9% 19000 19500 20000 20000 20500 21000Wilson HTM 16535 17637 17637 18739 6.4% 18739 20503 20503 20966 20966 21671Standard Bank 18300 18500 18350 18550 5.4% 18800 na na na na naMacquarie Bank 17000 18001 18001 18501 5.1% 18501 19500 20000 22000 23001 24251BoA Merrill Lynch 16750 17500 18000 18500 5.1% 17500 na na na na naCPM Group 17000 17700 18195 18400 4.5% 18565 18775 19070 18765 na naPrometeia 16968 17533 17959 18308 4.0% 18425 19030 19063 19244 19156 19208Oxford Economics 17014 17177 17732 18082 2.7% 18457 18613 18711 18768 18843 19031BNP Paribas 16600 17225 17775 18075 2.7% 18925 20000 20000 20000 20000 naSociete Generale 16569 18000 19000 18000 2.2% 18000 na na na na naUBS 16805 18078 17857 17637 0.2% 17637 19621 20503 20503 20283 20503Barclays Capital 16900 17250 18000 17500 -0.6% 18250 22500 22500 22500 22500 naBREE 16800 17325 17325 17325 -1.6% 17325 na na na na naChina Int'l Capital Corp 16820 16880 17020 17020 -3.3% 16910 16830 16750 16780 16790 naIHS Global Insight 17540 18162 18417 16835 -4.4% 16921 19010 18470 17890 18500 20809BIPE 15930 15990 16060 16210 -7.9% 16410 na na na na naEcon Intelligence Unit 16436 15641 14414 12576 -28.6% 12797 14708 16288 17749 19476 19843

Consensus (Mean) 17141 17807 18236 18565 5.5% 18844 20061 20436 20713 21015 21552


DECEMBER 2012


Automotive Sector Growth Lifts Prices

0

500

1000

1500

2000

2500

3000

3500

4000


LEAD

2200

2250

2300

2350

2400

2450

2500


Lead Spot Price, London Metal Exchange (LME)US$/metric tonne

Lead Forecasts, US$/metric tonne, fobSurvey Date Spot Price(Dec. 17): US$2270

1700

1850

2000

2150

2300

2450


250

275

300

325

350

375

400

Lead 3-Month Forward Prices and Warehouse Stocks,LMEUS$/metric tonne, Daily High/Low/Close


US$/metric tonne

US$

US$US$

tonnes,000s

Lead prices can be related to zinc prices as themetals are co-produced. Demand is currently ledby increased demand for batteries in Asia. FuturesMarket: LME Pricing: US$/tonne Contract Size: 25tonnes Delivery Dates: Daily for cash to 3 monthcontracts, Wednesdays for 3 month to 6 month con-tracts; then every third Wednesday for 7 months outto 63 months. Contracts Traded: 10,921,882 (2011).

Lead Production and Consumption (2009)

Production % of world total Consumption % of world total1. China 41.3%2. Australia 14.5%3. USA 10.4%4. Peru 7.7%5. Mexico 3.7%

1. China 44%2. EU 17%3. USA 16%4. South Korea 3%5. Japan 2%

Consensus

Lead prices fell in October, partly reflectingconcerns about the territorial dispute betweenChina and Japan. Sentiment, though, hassince improved due to an increase in demandfrom auto battery makers.The US and Chinese manufacturing indus-tries performed well in November, with reportsof demand for Japanese cars coming backon tap in the latter.Future gains in price for the metal will hingeto a large extent on the outcome of the US‘fiscal cliff’ negotiations and its impact on de-mand from the US economy.


3-Month Forward DailyHigh/Low/Close (lhs)

LME Futures



BoA Merrill Lynch 2200 2250 2300 2550 12.3% 2400 na na na na naBNP Paribas 2205 2365 2440 2540 11.9% 2695 2800 2800 2800 2800 naMetal Bulletin Research 2150 2220 2400 2500 10.1% 2600 2650 2800 2800 2850 2900Barclays Capital 2200 2250 2300 2400 5.7% 2450 2600 2600 2600 2600 naCredit Suisse 2130 2200 2300 2350 3.5% 2450 2550 2600 2650 2700 3000Morgan Stanley 2130 2200 2300 2350 3.5% 2450 2550 2600 2650 2700 3000Prometeia 2186 2202 2234 2348 3.5% 2193 2093 1990 1933 1864 1830Standard Bank 2290 2210 2280 2340 3.1% 2370 na na na na naEuromonitor International 2157 2203 2269 2336 2.9% 2398 2462 2516 2562 2601 2634ANZ 2261 2271 2304 2326 2.5% 2348 2370 2392 2425 2458 2480Econ Intelligence Unit 2117 2249 2293 2315 2.0% 2381 2425 2491 2558 2602 2646Commonwealth Bank 2025 2100 2200 2300 1.3% 2350 2350 2275 2199 2218 2261HWWI 2270 2350 2310 2300 1.3% 2300 2250 2200 2200 2200 2200Wilson HTM 2138 2205 2205 2293 1.0% 2293 2359 2359 2359 2359 2513CPM Group 2195 2195 2120 2265 -0.2% 2300 2310 2130 2175 na naOxford Economics 2200 2234 2243 2262 -0.4% 2309 2338 2367 2376 2385 2395China Int'l Capital Corp 2120 2240 2210 2250 -0.9% 2320 2170 2240 2320 2400 naSociete Generale 2168 2350 2300 2250 -0.9% 2400 na na na na naRoyal Bank of Canada 2185 2232 2232 2232 -1.7% 2232 2252 2252 2252 2252 2265Investec 2094 2205 2205 2205 -2.9% 2205 2315 2315 2535 2535 2535Macquarie Bank 1975 2050 2101 2050 -9.7% 2149 2251 2251 2251 2251 2299IHS Global Insight 2181 2140 2069 2031 -10.5% 2053 2057 1930 1863 1874 1906BIPE 1900 1951 1971 2021 -11.0% 2143 na na na na naUBS 2166 2205 2094 1984 -12.6% 2094 2315 2205 2094 2205 2425

Consensus (Mean) 2152 2211 2237 2283 0.6% 2329 2373 2366 2380 2413 2456


DECEMBER 2012


1700

1800

1900

2000

2100

2200


Zinc prices have rallied from US$1850 pertonne in our October 22 survey to US$2050on December 17, partly as a result of an up-swing in China (page 3) and its plans toincrease infrastructure spending in 2013.Chinese output of the metal rose to an elevenmonth high in November, while stocks heldat LME warehouses have also increased.Demand growth from global infrastructureinitiatives and 2013 mine closures are sup-portive of zinc. The consensus is, on bal-ance, predicting its price to rise to US$2174in December 2013.

Prices Set to Increase in 2013

0500

100015002000250030003500400045005000


Zinc, Special High Grade Spot Price (LME)US$/metric tonne

Zinc, Special High Grade, Forecasts, US$/metric tonne, fobSurvey Date Spot Price(Dec. 17): US$2050

ZINC

Zinc 3-Month Forward Prices and Warehouse Stocks, LMEUS$/metric tonne, Daily High/Low/Close

1900

2000

2100

2200

2300

2400

2500



US$/metric tonne

US$

US$ US$

tonnes,000s

Zinc Production and Consumption (2009)

Production % of world total Consumption % of world total1. China 27.1%2. Peru 13.2%3. Australia 11.3%4. USA 6.5%5. Canada 6.1%

1. China 40%2. EU 17%3. USA 8%4. Japan 4%5. South Korea 4%

Zinc’s primary use is in galvanising steel. FuturesMarket: LME Pricing: US$/tonne Contract Size:25 tonnes (+/- 2%) Delivery Dates: Daily for cashto 3 month contracts, Wednesdays for 3 month to 6month contracts; then every third Wednesday for 7months out to 63 months. Contracts Traded:21,984,302 (2011)

LME Futures

Consensus


3-Month ForwardDaily High/Low/Close (lhs)



Metal Bulletin Research 2000 2100 2250 2400 17.1% 2450 2700 2900 2900 2950 2800BoA Merrill Lynch 1950 2100 2150 2350 14.7% 2200 na na na na naHWWI 2050 2150 2290 2300 12.2% 2300 2300 2300 2400 2400 2400Euromonitor International 1891 2000 2139 2270 10.8% 2390 2503 2601 2684 2756 2817Commonwealth Bank 2000 2075 2175 2250 9.8% 2350 2400 2475 2546 2591 2638Wilson HTM 1940 2116 2116 2210 7.8% 2210 2337 2337 2403 2403 2535UBS 1914 2205 2205 2205 7.6% 2094 2094 2094 1874 1874 2094ANZ 2024 2028 2116 2204 7.6% 2271 2315 2359 2403 2447 2480Credit Suisse 2000 2100 2150 2200 7.3% 2250 2350 2400 2450 2500 2800Morgan Stanley 2000 2100 2150 2200 7.3% 2250 2350 2400 2450 2500 2800BNP Paribas 1925 2030 2085 2195 7.1% 2390 2550 2550 2550 2550 naEcon Intelligence Unit 1940 2006 2050 2117 3.3% 2095 2139 2205 2227 2249 2293Standard Bank 1870 1950 1980 2110 3.0% 2140 na na na na naOxford Economics 1952 1971 2003 2096 2.3% 2134 2158 2180 2197 2215 2233Investec 1984 2094 2094 2094 2.2% 2094 2271 2271 2491 2491 2491Prometeia 1944 2016 2042 2084 1.7% 2043 2070 2082 2094 2097 2102Societe Generale 1925 2000 2100 2070 1.0% 2150 na na na na naChina Int'l Capital Corp 1960 2090 2030 2060 0.5% 2120 2000 2060 2120 2190 naCPM Group 1950 1970 2005 2035 -0.7% 2095 2155 2180 2145 na naMacquarie Bank 1925 2026 2075 2026 -1.1% 2101 2200 2200 2200 2200 2299BREE 1901 2025 2025 2025 -1.2% 2025 na na na na naBIPE 1830 1951 1972 2012 -1.8% 2032 na na na na naRoyal Bank of Canada 1920 1984 1984 1984 -3.2% 1984 2205 2205 2205 2205 2535IHS Global Insight 1928 1916 1917 1960 -4.4% 1971 2044 2014 2017 2024 2058Barclays Capital 1920 2000 2050 1950 -4.9% 2200 2700 2700 2700 2700 na

Consensus (Mean) 1946 2040 2086 2136 4.2% 2174 2292 2326 2353 2386 2461


OCTOBER 2007


DECEMBER 2012

0

200

400

600

800

1000

1200

1400


Steel Scrap - USA (short ton)

Chinese Recovery Boosts Price Outlook

STEEL

Hot Rolled Coil (USA, Domestic) Forecasts, US$/short ton, fobConsensus Price forQ4 2012: US$628.2

Hot Rolled Coil (Europe, Domestic) Forecasts, US$/metric tonne, fobConsensus Price forQ4 2012: US$631.5

Steel – Hot Rolled Coil (HRC) Prices (MEPS)US$/tonneUS$/tonne

Steel Production and Consumption (2011)

Producers % of world total Consumers % of world total1. China 45.92. Japan 7.23. United States 5.84. India 4.85. Russia 4.6

1. China 45.42. United States 6.53. India 4.94. Japan 4.75. South Korea 4.1

Steel prices are generally set in contracts betweenmajor producers and their clients. However, theLondon Metal Exchange in April 2008 launchedtwo steel billet contracts, one for Mediterraneandelivery and the other for delivery in the Far East.Whilst there are many varieties of steel, Hot RolledCoil (HRC) is a commonly referenced price, butregional complexities prevent the emergence of aclear benchmark at present.

1 metric tonne = 1.1023 short tons

Hot Rolled Coil (Asia, Domestic) Forecasts, US$/metric tonne, fobConsensus Price forQ4 2012: US$601.9


1 Individual forecasts available in the Excel spreadsheet.


HRC - Europe (metric tonne)

HRC - Asia(metric tonne)

HRC - USA(short ton)


The price outlook for steel has improved asrecent upbeat industrial production data sug-gests that the Chinese recovery is regainingmomentum. Our panel is now forecasting astrong 7.0% gain in the price of Asian HRCover the next year.Chinese imports of iron ore – a key input insteel production – soared in November as sev-eral domestic mines closed for the winter andmanufacturers looked to stockpile before in-creased investment in infrastructure projectsdrives demand and prices higher next year.The euro zone recession remains entrenched,with austerity dampening regional demand andleaving forecasters predicting a more mutedprice performance of HRC steel in Europethroughout 2013.

1

1


UBS 670.0 705.0 721.0 698.0 10.5% 706.0 697.0 707.0 678.0 657.0 660.0

MEPS 624.0 695.0 710.0 685.0 8.5% 645.0 690.0 750.0 740.0 720.0 745.0

Macquarie Bank 630.0 670.0 680.0 680.0 7.7% 680.0 665.0 665.0 665.0 665.0 655.0

IHS Global Insight 623.0 666.8 683.2 649.9 2.9% 654.9 665.5 677.3 705.2 747.6 739.8

Oxford Economics 615.3 624.6 620.8 628.4 -0.5% 639.8 645.5 646.7 641.4 631.6 620.5

Econ Intelligence Unit 626.7 638.3 640.0 550.0 -12.9% 526.7 548.3 608.3 563.3 506.7 525.0

Consensus (Mean) 631.5 666.6 675.8 648.6 2.7% 642.1 651.9 675.7 665.5 654.6 657.6

High 670.0 705.0 721.0 698.0 706.0 697.0 750.0 740.0 747.6 745.0

Low 615.3 624.6 620.8 550.0 526.7 548.3 608.3 563.3 506.7 525.0


Consensus (Mean) 628.2 676.2 684.2 682.2 8.6% 682.8 701.5 710.6 717.5 704.0 708.7


Consensus (Mean) 601.9 633.5 650.8 644.1 7.0% 655.5 680.6 693.0 701.6 696.5 705.0

High 620.0 679.4 678.4 698.4 704.1 708.7 715.3 729.7 728.5 734.0

Low 570.0 590.0 610.0 600.0 600.0 650.0 650.0 650.0 650.0 650.0


DECEMBER 2012


100

110

120

130


Australian Lump

IRON ORE

Australian Fine Iron Ore (Quarterly Contract) Forecasts, US$/metric tonne, fob

Australian Lump Iron Ore (Quarterly Contract) Forecasts, US$/metric tonne, fobConsensus Price forQ4 2012: US$119.9

Fine and Lump Iron Ore PricesUS$ per metric tonneUS$

Annual contract prices prior to April 2010

Consensus Forecast PricesPrices and Forecasts as of Survey Date

Australian Fine

US$/T

US$

Brazilian Fine

Brazilian Fine Iron Ore (Quarterly Contract) Forecasts, US$/metric tonne, fob

0

5000

10000

15000

20000

Jan 2003 Jan 2005 Jan 2007 Jan 2009 Jan 2011

Baltic Capesize Index of Shipping Rates


Iron ore is traded in world markets under contracts. Prices are set by negotia-tion between iron ore producers and steel manufacturers. Three suppliers,Vale, Rio Tinto and BHP Billiton accounted for 75% of ocean trade in iron orein 2006. Fines are the most heavily traded category (60% of global trade)while lump iron ore trades at a higher price due to its higher iron content.Producers dropped the annual benchmark price system in April 2010 in fa-vour of quarterly prices based on prior average daily spot prices.


1 Individual forecasts available in the Excel spreadsheet service.



Shipping costs canadd US$24-34/MT

to the delivered costof coal on some

routes.


Deloitte Access Economics 120.00 120.00 120.00 130.00 16.9% 130.00 130.00 130.00 135.00 135.00 135.00Wilson HTM 110.73 116.56 123.55 125.30 12.7% 125.30 124.27 122.72 118.91 119.61 119.61Macquarie Bank 107.30 131.30 121.30 121.30 9.1% 111.30 120.20 120.20 110.20 110.20 105.20ETLA 120.40 120.00 120.00 120.00 7.9% 120.00 120.00 115.00 115.00 115.00 115.00Morgan Stanley 117.00 110.00 122.00 120.00 7.9% 120.00 118.00 118.00 118.00 118.00 naANZ 103.20 107.23 110.85 114.92 3.4% 117.39 119.46 120.93 119.47 117.27 115.11Investec 105.00 114.50 114.50 114.50 3.0% 114.50 112.00 112.00 112.00 112.00 105.00UBS 107.76 120.69 123.10 113.25 1.9% 107.59 107.59 107.59 101.14 96.08 98.00Royal Bank of Canada 111.00 121.00 121.00 111.00 -0.2% 111.00 97.00 97.00 97.00 97.00 92.00BREE 116.90 106.00 106.00 106.00 -4.7% 106.00 na na na na naCommonwealth Bank 106.45 104.36 103.88 105.56 -5.1% 104.06 108.99 109.27 104.45 99.62 104.59Credit Suisse 101.00 110.00 105.00 100.00 -10.1% 90.00 85.00 85.00 85.00 85.00 80.00IHS Global Insight 118.70 108.40 141.50 88.90 -20.0% 116.60 138.80 141.50 170.10 155.00 150.90

Consensus (Mean) 111.19 114.62 117.90 113.13 1.8% 113.36 115.11 114.93 115.52 113.32 110.95


1


1

0.0

20.040.0

60.0

80.0100.0

120.0

140.0

160.0180.0

200.0

Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12

Australian Lump (62% fe, fob)Australian Fine (62% fe, fob)Brazil Fine (64.5 fe, fob)Platts Index (62% fe, cfr)

Consensus (Mean) 119.9 127.5 127.9 126.9 5.8% 124.5 125.2 124.7 121.8 120.6 118.1


Consensus (Mean) 107.80 119.39 117.80 117.39 8.9% 113.48 115.71 114.16 108.81 106.12 104.36

High 119.23 130.00 125.11 133.32 133.33 133.34 132.16 127.21 121.51 117.54

Low 94.97 108.69 111.10 101.25 95.59 95.59 95.59 89.14 84.08 86.00


OCTOBER 2007


DECEMBER 2012

High Low

Spot price 12.63Dec 2012 13.19 4.5% 14.00 11.10Mar 2013 13.71 8.6% 14.65 11.24Jun 2013 13.77 9.0% 14.65 11.46Sep 2013 13.98 10.7% 15.00 11.78Dec 2013 13.97 10.6% 15.00 11.59Mar 2014 14.60 15.6% 16.00 11.93Jun 2014 14.72 16.6% 16.00 12.33Sep 2014 14.80 17.2% 16.00 12.86Dec 2014 14.81 17.2% 16.00 12.99Mar 2015 14.88 17.8% 15.60 13.15

US$/lbConsensus

(Mean)

% change

from spot

Forecast Range

0.0

3.0

6.0

9.0

12.0

15.0

18.0

Jan2007

Jan2008

Jan2009

Jan2010

Jan2011

Jan2012

Jan2013

0

10

20

30

40

50

60

Jan2007

Jan2008

Jan2009

Jan2010

Jan2011

Jan2012

Jan2013

5000

10000

15000

20000

25000

30000

35000

Jan2007

Jan2008

Jan2009

Jan2010

Jan2011

Jan2012

Jan2013

High Low

Spot price 23325Dec 2012 21078 -9.6% 23000 20000Mar 2013 21899 -6.1% 24000 20224Jun 2013 22503 -3.5% 25000 19842Sep 2013 22469 -3.7% 26000 17637Dec 2013 22721 -2.6% 26100 15432Mar 2014 22913 -1.8% 30000 13228Jun 2014 22820 -2.2% 30000 11023Sep 2014 22371 -4.1% 27000 9259Dec 2014 22387 -4.0% 27000 9259Mar 2015 21985 -5.7% 27000 8818

Consensus (Mean)

% change

from spot

Forecast RangeUS$/metric

tonne

ADDITIONAL METALS

ANZ Bank of America – Merrill Lynch Barclays Capital

BNP Paribas Citigroup CPM International

China Int’l Capital Corp Credit Suisse Deutsche Bank

Euromonitor Economist Intelligence Unit HWWI

IHS Global Insight Investec Macquarie Bank

Metal Bulletin Research Morgan Stanley Oxford Economics

Prometeia RBS Royal Bank of Canada

SG Commodity Research UBS Wilson HTM

TIN

Cobalt, Spot PriceUS$/lb, fob

COBALT

Manganese,Spot Price

US$/Metric Tonne Unit(1/100 of a tonne) of48-50% Manganese

Ore, fob

MANGANESE

Tin, Spot Price, LMEUS$/metric tonne, fob

High Low

Spot price 5.100Dec 2012 5.029 -1.4% 5.100 4.930Mar 2013 5.314 4.2% 5.560 5.000Jun 2013 5.354 5.0% 5.560 5.000Sep 2013 5.382 5.5% 5.650 4.800Dec 2013 5.432 6.5% 5.900 4.800Mar 2014 5.658 10.9% 6.100 4.800Jun 2014 5.688 11.5% 6.250 4.800Sep 2014 5.804 13.8% 6.500 4.600Dec 2014 5.824 14.2% 6.500 4.600Mar 2015 5.975 17.1% 6.550 4.550

US$/metric tonne unit

Consensus (Mean)

% change

from spot

Forecast Range

Tin has its physical spot marketcentred in Kuala Lumpur with theLME recognised as the principalhedging market.

Futures Market: LME Pricing:US$/tonne Contract Size: 5tonnes (+/- 2%) Delivery Options:Daily for cash to 3 month contracts,Wednesdays for 3 month to 6month contracts; then every thirdWednesday for 7 months out to 15months. Contracts Traded:1,891,633 (2011).

Cobalt is principally used as asuper alloying agent because ofits anti-corrosive properties. It iscommonly a by-product of nickeland used in the production of al-loys, catalysts and batteries. TheLME launched futures contracts incobalt in February 2010.

Futures Market: LME Pricing:US$/tonne Contract Size: 1 tonneDelivery Options: 1 tonne lots in100-500kg drums of uniform sizeand weight.

Manganese is not exchange-traded so prices are establishedby negotiation between buyersand sellers. Negotiations occur inline with the beginning of the Japa-nese fiscal year in April. Follow-ing the setting of prices with Japa-nese manufacturing companies,similar settlement prices are setworldwide.

The price is based upon a bench-mark ore of 48-50% manganesecontent.

Individual panellist forecasts for these minerals are available as part of our Excel spreadsheet service.Please enquire at [email protected].

US$

US$

US$

Forecasts for the metals shown on this and the next page were provided by the following leading forecasters:

(Nominal, Quarterly Averages)



DECEMBER 2012


400

600

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2200

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2800

Jan2007

Jan2008

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0

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ADDITIONAL METALS

MOLYBDENUM

RUTILE

Molybdenum,Spot Price

US$/lb, fob

Rutile, Spot PriceUS$/metric tonne, fob

ILMENITE

Ilmenite, Spot PriceUS$/metric tonne, fob

ZIRCON

Zircon, Spot PriceUS $/metric tonne, fob

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

Jan2007

Jan2008

Jan2009

Jan2010

Jan2011

Jan2012

Jan2013

High Low

Spot price 10.90Dec 2012 11.26 3.3% 12.50 10.82Mar 2013 12.17 11.6% 14.00 10.95Jun 2013 12.60 15.6% 15.00 11.30Sep 2013 12.85 17.8% 15.00 10.96Dec 2013 13.10 20.2% 15.00 11.48Mar 2014 14.14 29.8% 16.00 11.51Jun 2014 14.50 33.0% 16.00 11.72Sep 2014 14.43 32.4% 16.00 12.03Dec 2014 14.32 31.4% 16.00 11.93Mar 2015 13.78 26.4% 15.00 11.96

US$/lbConsensus

(Mean)

% change

from spot

Forecast Range

High Low

Spot price 2225.0Dec 2012 2233.3 0.4% 2400.0 1900.0Mar 2013 1970.3 -11.4% 2300.0 1600.0Jun 2013 1987.0 -10.7% 2300.0 1622.0Sep 2013 1983.3 -10.9% 2300.0 1600.0Dec 2013 2000.0 -10.1% 2300.0 1600.0Mar 2014 1803.3 -19.0% 1900.0 1750.0Jun 2014 1736.7 -21.9% 1900.0 1600.0Sep 2014 1591.7 -28.5% 1900.0 1350.0Dec 2014 1566.7 -29.6% 1900.0 1300.0Mar 2015 1317.0 -40.8% 1509.9 1125.0

US$/metric tonne

Consensus (Mean)

% change

from spot

Forecast Range

High Low

Spot price 300.0Dec 2012 276.7 -7.8% 300.0 250.0Mar 2013 263.0 -12.3% 300.0 230.0Jun 2013 263.0 -12.3% 300.0 230.0Sep 2013 253.5 -15.5% 300.0 180.0Dec 2013 253.5 -15.5% 300.0 180.0Mar 2014 227.6 -24.1% 250.0 160.0Jun 2014 224.2 -25.3% 250.0 160.0Sep 2014 219.8 -26.7% 250.0 160.0Dec 2014 219.8 -26.7% 250.0 160.0Mar 2015 206.1 -31.3% 250.0 150.0

US$/metric tonne

Consensus (Mean)

% change

from spot

Forecast Range

High Low

Spot price 2681.0Dec 2012 2143.3 -20.1% 2500.0 1760.0Mar 2013 1966.7 -26.6% 2400.0 1500.0Jun 2013 1966.7 -26.6% 2400.0 1600.0Sep 2013 1925.0 -28.2% 2400.0 1400.0Dec 2013 1916.7 -28.5% 2400.0 1400.0Mar 2014 1941.7 -27.6% 2400.0 1600.0Jun 2014 1900.0 -29.1% 2400.0 1600.0Sep 2014 1825.0 -31.9% 2400.0 1450.0Dec 2014 1783.3 -33.5% 2400.0 1300.0Mar 2015 1620.0 -39.6% 1800.0 1350.0

US$/metric tonne

Consensus (Mean)

% change

from spot

Forecast Range

Molybdenum is principally used asan alloying agent in steel becauseof its anti-corrosive properties. Asa by-product of copper productioncosts are low and prices can beinfluenced by the price and de-mand for nickel and stainless steel,as well as molybdenum roastingcapacity.

Futures Market: LME (since Feb-ruary 2010) Pricing: US$/tonneContract Size: 6 tonnes Mo (+/-5%(Mo content 57-63%) Delivery Op-tions: 10 tonnes (RMC), deliverablein 200 or 250kg drums.

Mineral sand prices are principallydetermined by derived demand.Rutile is used to make titanium di-oxide (it is approximately 95% TiO2

in its mineral form), which can beused to make titanium or as a whitepigment in papers, plastics andpaints and cosmetics.

Prices are set under long-term con-tracts between producers (many ofwhich will produce from mine toend use) and consumers.

Ilmenite is mined alongside rutileand is also used to make titaniumdioxide (it is approximately 54%TiO2 in its mineral form). Prices areset under long-term contracts. Thevalue of ilmenite is substantiallylower than that of rutile and is there-fore often used to produce syntheticrutile. 90% of titanium metal issourced from ilmenite.

Australia is the world’s largest pro-ducer (55%) of ilmenite and rutilefollowed by South Africa (24%) andUkraine (16%).

The price of Zircon (which ismainly used in ceramics and tiles)is set under long-term contracts be-tween producers and consumers.It has risen sharply in recent yearsfollowing the move from spot-trad-ing to contract-trading.

Iluka is the world’s largest zirconminer and as a result the most in-fluential in setting a benchmarkprices. Its Eucla basin in Australiais mined principally for zircon un-like the majority of other mines, forwhich zircon is a coproduct of rutileand ilmenite.

US$

US$

US$

US$

The price of mineralsands soared in 2011

due to the rapid urbanisa-tion of China, India and

the Middle East.

Under-investment in themineral sands industry inthe 1990s and 2000s has

contributed to lowsupplies and inventories

in recent years.





DECEMBER 2012


200

400

600

800

1000

1200

1400

1600

1800

2000


GOLD

Gold, Spot Price (PM Fixing),London Bullion Market Association (LBMA)

US$/troy ounce

Gold Forecasts, US$/Troy OunceSurvey Date Spot Price(Dec. 17): US$1696

1500

1550

1600

1650

1700

1750

1800

1850


78

80

82

84

Gold Futures – February 2013 Contract (COMEX)US$/troy oz, Daily High/Low/Close

1550

1600

1650

1700

1750

1800

1850


COMEX Futures


US$/troy oz

US$

US$

US$

Gold Supply and Demand (2011) Gold prices are fixed twice daily by the LBMA provid-ing a benchmark price for trades on various exchangesand over-the-counter trades.US Futures Market: COMEX Pricing: US$/troy ounceContract Size: 100 troy ounces Deliverability: Next 3 cal-endar months; any February, April, August and Octoberwithin 23 months; and any June and December within72 months. Contracts Traded: 49,175,193 (2011).

Production tonnes % of world

1 China 355 13.1%2 Australia 270 10.0%3 USA 237 8.8%4 Russia 200 7.4%5 South Africa 190 7.0%

World 2700

Consumption tonnes % of world

1. India 933 27.1%2. China 770 22.3%3. USA 195 5.6%4. Germany 159 4.6%5. Turkey 144 4.2%

World 3450

Prices Waver on US Budget TalksGold prices have fallen in recent weeks asprotracted US budget negotiations dampen in-vestor appetite for risk. However, the longer-term appeal of this inflation-hedge received aboost in mid-December as the US FederalReserve unveiled fresh stimulus measures.The rupee has recovered a little from its Oc-tober and November decline and Indian jewel-lery demand may increase before the weddingseason ends in January 2013. Our panel pre-dicts gold will gain 5.4% over the next year,with a rebound in the Chinese economy in Q4aiding price expectations.

Index

Consensus

Gold Futures Feb. 2013Daily High/Low/Close (lhs)


US$ Index(rhs, inverted scale)


UBS 1760.0 1860.0 1930.0 1920.0 13.2% 1890.0 1700.0 1700.0 1700.0 1700.0 1500.0BNP Paribas 1740.0 1815.0 1855.0 1895.0 11.7% 1895.0 1780.0 1780.0 1780.0 1780.0 naMacquarie Bank 1780.0 1850.0 1900.0 1880.0 10.8% 1875.0 1850.0 1750.0 1650.0 1600.0 1500.0Credit Suisse 1760.0 1790.0 1820.0 1870.0 10.3% 1880.0 1820.0 1750.0 1730.0 1690.0 1500.0ANZ 1776.1 1800.0 1835.0 1860.0 9.7% 1880.0 1880.0 1860.0 1835.0 1810.0 1780.0Morgan Stanley 1780.0 1830.0 1845.0 1860.0 9.7% 1875.0 1800.0 1800.0 1800.0 1800.0 naBarclays Capital 1730.0 1810.0 1780.0 1825.0 7.6% 1845.0 1760.0 1760.0 1760.0 1760.0 naCommonwealth Bank 1725.0 1775.0 1800.0 1825.0 7.6% 1795.0 1765.0 1735.0 1705.0 1675.0 1645.0Econ Intelligence Unit 1727.0 1775.0 1802.0 1815.0 7.0% 1800.0 1798.0 1720.0 1675.0 1620.0 1600.0Standard Bank 1850.0 1890.0 1800.0 1810.0 6.7% 1900.0 na na na na naWilson HTM 1700.0 1806.0 1806.0 1803.0 6.3% 1803.0 1723.0 1723.0 1670.0 1670.0 1558.0China Int'l Capital Corp 1790.0 1840.0 1860.0 1800.0 6.1% 1820.0 1840.0 1810.0 1760.0 1740.0 naInvestec 1725.0 1800.0 1800.0 1800.0 6.1% 1800.0 1800.0 1800.0 1700.0 1700.0 1600.0Societe Generale 1724.0 1800.0 1850.0 1800.0 6.1% 1750.0 na na na na naBREE 1725.0 1738.0 1738.0 1738.0 2.5% 1738.0 na na na na naRoyal Bank of Canada 1727.9 1700.0 1700.0 1700.0 0.2% 1700.0 1700.0 1700.0 1700.0 1700.0 1600.0BoA Merrill Lynch 1750.0 1760.0 1850.0 1660.0 -2.1% 1950.0 na na na na naEuromonitor International 1728.0 1676.0 1647.0 1651.0 -2.7% 1658.0 1665.0 1670.0 1675.0 1678.0 1681.0Oxford Economics 1722.8 1710.0 1665.7 1623.8 -4.3% 1571.8 1512.1 1450.1 1384.4 1335.0 1306.0CPM Group 1726.0 1718.3 1666.8 1608.4 -5.2% 1640.6 1673.4 1623.2 1598.9 1662.8 1563.1

Consensus (Mean) 1747.3 1787.2 1797.5 1787.2 5.4% 1803.3 1754.2 1727.0 1695.2 1682.6 1569.4


DECEMBER 2012


Volatile Silver Prices Rise then Cool

0.05.0

10.015.020.025.030.035.040.045.050.0


40

50

60

70

80

90

100

SILVER

Silver, Spot Price (Fixing),London Bullion Market Association (LBMA)

Silver Forecasts, US$/Troy OunceSurvey Date Spot Price(Dec. 17): US$32.21

26.0

28.0

30.0

32.0

34.0

36.0


Silver Futures – March 2013 Contract (COMEX)US$/troy oz, Daily High/Low/Close

26.00

28.00

30.00

32.00

34.00

36.00


Consensus Forecasts v Futures PricesPrices and Forecasts as at Survey Date

US$/troy oz

COMEX Futures

US$

US$ US$

World Production and Uses of Silver (2010)

1. Mexico 128.62. Peru 116.13. China 99.24. Australia 59.95. Chile 41.0

Millions of OuncesProducer

Silver, like gold, has a price set by members of theLBMA which is used as a benchmark for over-the-counter trades.US Futures Market: COMEX Pricing: US$/troy ounceContract Size: 5,000 troy ounces Deliverability: Next 3calendar months; any January, March, May and Sep-tember within 23 months; and any July and Decemberwithin 60 months. Contracts Traded: 19,608,666 (2011).

Gold/Silver SpotPrice Ratio (rhs)

Silver Spot Price (lhs)

1. Industrial Applications 46.12. Jewellery 15.83. Coins and Metals 9.64. Photography 6.95. Silverware 4.8

% of total demandUse

US$/troy ounceRatio

Consensus


Jewellery demand from Diwali and the Indianwedding season helped silver prices to climbthroughout November, reaching a peak of$34.28 per troy oz. However, prices have sinceeased as uncertainty over whether the US canavert a “fiscal cliff” weighed on markets.Additional US quantitative easing announcedearlier this month should support prices some-what as investors look to safeguard against apotential depreciation of the US$. China is thesecond largest market for the precious metaland its recent upbeat industrial production databodes well for demand in early 2013.


BNP Paribas 33.50 38.15 39.25 40.10 24.5% 38.70 30.10 30.10 30.10 30.10 naBoA Merrill Lynch 33.00 35.10 34.10 37.10 15.2% 38.00 na na na na naMacquarie Bank 35.50 38.00 38.00 37.00 14.9% 37.00 37.00 34.00 31.00 26.50 22.00UBS 33.50 36.00 39.00 37.00 14.9% 35.00 31.00 31.00 31.00 31.00 24.00ANZ 34.32 34.55 35.25 35.75 11.0% 36.50 37.10 37.10 36.75 36.00 34.25Morgan Stanley 33.58 34.53 34.81 35.09 9.0% 35.38 34.62 34.62 34.62 34.62 naChina Int'l Capital Corp 33.50 35.00 38.00 35.00 8.7% 35.00 35.50 33.50 30.50 30.00 naRoyal Bank of Canada 29.38 29.80 33.19 35.00 8.7% 35.00 35.00 35.00 35.00 35.00 35.00Econ Intelligence Unit 33.00 33.92 34.43 34.68 7.7% 34.39 34.36 32.87 32.01 30.96 30.57Societe Generale 33.00 34.00 35.00 34.00 5.6% 32.00 na na na na naWilson HTM 31.39 34.00 34.00 34.00 5.6% 34.00 31.33 31.33 30.36 30.36 28.33Credit Suisse 32.00 33.80 33.70 32.80 1.8% 31.90 31.40 31.30 31.50 31.30 26.30Investec 32.50 32.00 32.00 32.00 -0.7% 32.00 32.00 32.00 30.00 30.00 29.00Standard Bank 35.00 35.00 34.00 32.00 -0.7% 31.00 na na na na naBarclays Capital 33.00 35.00 30.50 31.00 -3.8% 33.50 29.00 29.00 29.00 29.00 naCommonwealth Bank 28.50 29.50 29.00 28.15 -12.6% 26.72 25.52 24.81 24.40 24.00 23.80CPM Group 32.99 33.03 27.09 25.73 -20.1% 26.50 27.57 27.29 25.65 26.93 24.78

Consensus (Mean) 32.80 34.20 34.20 33.91 5.3% 33.68 32.25 31.71 30.85 30.41 27.80


DECEMBER 2012


1600

1650

1700

1750

1800

1850


Platinum, Spot Price (PM Fixing),London Platinum and Palladium Market (LPPM)

Platinum Forecasts, US$/Troy OunceSurvey Date Spot Price(Dec. 17): US$1606

PLATINUM

0250500750

1000125015001750200022502500

Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 20120.5

1.0

1.5

2.0

2.5

3.0

Platinum Spot Price (lhs)

1300

1400

1500

1600

1700

1800


Platinum Futures – April 2013 Contract (NYMEX)US$/troy oz, Daily High/Low/Close


US$/troy oz

NYMEX Futures

US$

US$

US$

Platinum Production and Consumption (2010)

Production % of world total1. South Africa 76.52. Russia 13.63. Zimbabwe 4.64. North America 3.55. Others 1.8

1. Europe 26.82. China 25.23. North America 19.14. Japan 14.65. Others 14.3

Consumption % of world total

Platinum prices are fixed twice daily by the LPPM toprovide a benchmark price in a practice similar tothat used for gold and silver.US Futures Market: NYMEX Pricing: US$/troyounce Lot Size: 50 troy ounces Deliverability: Over15 months including the next 3 calendar months; thena January, April, June and October cycle. ContractsTraded: 1,993,263 (2011).

Platinum/Gold SpotPrice Ratio (rhs)

US$/troy ounce

Chinese Recovery Set to Support Prices

Ratio

The conclusion of widespread mining strikesin South Africa that had interrupted produc-tion saw platinum prices retreat in October,although the precious metal has sincestrengthened and exceeded $1600 per troyoz again in the first part of December. Chi-nese demand for this autocatalyst componentmay increase in 2013 as its economicslowdown appears to have bottomed out.The US Fed’s announcement of a furtherUS$45bn of bond purchases per month mayalso boost prices. Our panel forecasts thatplatinum will gain 4.6% over the next year.

Consensus



ANZ 1651 1665 1755 1828 13.8% 1848 1855 1845 1835 1820 1795Macquarie Bank 1600 1650 1750 1800 12.1% 1800 1850 1850 1850 1850 1900UBS 1630 1700 1735 1750 9.0% 1775 1980 1980 1980 1980 2012Wilson HTM 1612 1686 1686 1739 8.3% 1739 1778 1778 1767 1767 1842BNP Paribas 1605 1665 1680 1735 8.0% 1745 1740 1740 1740 1740 naCredit Suisse 1620 1660 1680 1730 7.7% 1760 1750 1800 1820 1840 1850Morgan Stanley 1550 1650 1700 1730 7.7% 1780 1785 1785 1785 1785 naIHS Global Insight 1626 1685 1720 1729 7.6% 1735 1794 1759 1703 1683 1743Barclays Capital 1605 1640 1660 1710 6.5% 1750 1750 1750 1750 1750 naChina Int'l Capital Corp 1600 1630 1670 1710 6.5% 1760 1780 1795 1810 1830 naInvestec 1600 1700 1700 1700 5.9% 1700 1750 1750 1750 1750 1800Royal Bank of Canada 1499 1496 1598 1700 5.9% 1700 1700 1700 1800 1800 1800Societe Generale 1571 1650 1675 1700 5.9% 1725 na na na na naStandard Bank 1600 1600 1600 1700 5.9% 1700 na na na na naBoA Merrill Lynch 1650 1650 1800 1650 2.7% 1850 na na na na naEcon Intelligence Unit 1595 1600 1575 1575 -1.9% 1550 1500 1500 1500 1500 1600CPM Group 1606 1615 1567 1527 -4.9% 1634 1693 1719 1658 1692 1785

Consensus (Mean) 1601 1644 1679 1707 6.3% 1738 1765 1768 1768 1770 1813


DECEMBER 2012


525

575

625

675

725


650

700

750

800

850


Palladium, Spot Price (PM Fixing),London Platinum and Palladium Market (LPPM)

Palladium Forecasts, US$/Troy OunceSurvey Date Spot Price(Dec. 17): US$697.0

PALLADIUM

0

200

400

600

800

1000

1200


Palladium Futures – March 2013 Contract (NYMEX)US$/troy oz, Daily High/Low/Close


US$/troy oz

US$

US$

US$

Palladium Production and Consumption (2010)

Production % of world total1. Russia 51.02. South Africa 35.33. North America 8.14. Zimbabwe 3.05. Others 2.6

1. North America 31.72. China 18.93. Europe 18.04. Japan 15.35.Others 16.1

Consumption % of world total

Palladium prices are fixed twice daily by the LPPM toprovide a benchmark price in a practice used for otherprecious metals. Most palladium is used in catalyticconverters. US Futures Market: NYMEX Pricing: US$/troy ounce Lot Size: 100 troy ounces Deliverability:Over 15 months including the next 3 calendar months;then a March, June, September and December cycle.Contracts Traded: 1,139,529 (2011).

US$/troy ounce

Supply Deficit Sees Prices ClimbPalladium supply will trail demand by thegreatest level in over a decade this year dueto the earlier strikes and safety stoppages inSouth African mines, as well as reduced salesfrom Russian stockpiles. Palladium pricesincreased during November and hit US$700per troy oz on December 14.Positive Chinese industrial production dataand the unveiling of greater stimulus meas-ures in the US may see this precious metalextend gains into 2013. Palladium is forecastto outperform platinum and advance 5.7%over the next four quarters.

Consensus



Macquarie Bank 675.0 735.0 795.0 815.0 16.9% 815.0 830.0 830.0 830.0 830.0 850.0Societe Generale 634.0 700.0 750.0 800.0 14.8% 850.0 na na na na naUBS 655.0 750.0 775.0 800.0 14.8% 800.0 850.0 850.0 850.0 850.0 825.0BNP Paribas 640.0 720.0 735.0 790.0 13.3% 875.0 1000.0 1000.0 1000.0 1000.0 naANZ 654.5 685.0 730.0 770.0 10.5% 790.0 810.0 816.5 808.0 792.5 778.5Wilson HTM 650.0 700.0 700.0 767.0 10.0% 767.0 790.0 790.0 805.0 805.0 850.0Barclays Capital 650.0 690.0 725.0 750.0 7.6% 780.0 795.0 795.0 795.0 795.0 naInvestec 640.0 650.0 650.0 750.0 7.6% 750.0 800.0 800.0 850.0 850.0 850.0Royal Bank of Canada 628.4 611.1 678.3 750.0 7.6% 750.0 750.0 750.0 850.0 850.0 850.0Standard Bank 638.0 650.0 700.0 750.0 7.6% 750.0 na na na na naChina Int'l Capital Corp 660.0 670.0 690.0 720.0 3.3% 750.0 770.0 790.0 810.0 840.0 naCredit Suisse 640.0 660.0 680.0 720.0 3.3% 730.0 760.0 790.0 810.0 830.0 850.0Morgan Stanley 630.0 680.0 700.0 720.0 3.3% 730.0 780.0 780.0 780.0 780.0 naIHS Global Insight 647.0 677.1 694.7 676.0 -3.0% 669.3 709.5 713.8 699.2 705.1 730.7BoA Merrill Lynch 650.0 650.0 750.0 675.0 -3.2% 800.0 na na na na naEcon Intelligence Unit 680.0 700.0 675.0 650.0 -6.7% 650.0 655.0 655.0 655.0 655.0 685.0CPM Group 651.8 631.7 638.0 625.2 -10.3% 678.4 721.8 737.7 710.4 788.5 804.3

Consensus (Mean) 648.4 680.0 709.8 737.0 5.7% 760.9 787.2 792.7 803.8 812.2 807.4


NYMEX Futures

DECEMBER 2012


REAL (INFLATION-ADJUSTED) COMMODITY PRICE FORECASTS

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12

500

1000

1500

2000

2500

3000

3500


0

2000

4000

6000

8000

10000

12000


Crude Oil (WTI) Prices – Historical DataUS$ per barrel

Real

Nominal

US Natural Gas Prices – Historical DataUS$/MMBtu

Real

Nominal

Aluminium Prices – Historical DataUS$ per tonne

Copper Prices – Historical DataUS$ per tonne

Real

Nominal

Nominal

Real

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

110.0

Jan2008

Jul2008

Jan2009

Jul2009

Jan2010

Jul2010

Jan2011

Jul2011

Jan2012

Jul2012

Real Long-Term 6-10 Year ForecastsConsensus Forecasts from survey of:

4.0

6.0

8.0

10.0

12.0

Jan2008

Jul2008

Jan2009

Jul2009

Jan2010

Jul2010

Jan2011

Jul2011

Jan2012

Jul2012


US Natural Gas Prices,Real 6-10 Year Consensus Forecasts

WTI

2200

2300

2400

2500

2600

Jan2008

Jul2008

Jan2009

Jul2009

Jan2010

Jul2010

Jan2011

Jul2011

Jan2012

Jul2012


Aluminium Prices,Real 6-10 Year Consensus Forecasts

3500

4000

4500

5000

5500

6000

Jan2008

Jul2008

Jan2009

Jul2009

Jan2010

Jul2010

Jan2011

Jul2011

Jan2012

Jul2012


Copper Prices,Real 6-10 Year Consensus Forecasts

Nominal prices are expressed in fixed money terms in a givenyear, while real values adjust for inflation over the years. Inthe historical data charts below and on the next page (cov-ering 1994 to 2012), we show commodity price series in bothnominal (black line) and real terms (blue). Nominal valuesare stated in current US$ prices (definitions on individual com-modity pages), while the real price series inflates the nomi-nal values using the US CPI index (Jan. 2012 = 100). Realprices are important in the analysis of project feasibility andother long-term investment decisions, as is the choice ofdeflator. Furthermore, the long-term forecasts table on page5 illustrates that 5-10 year real consensus price expecta-tions may be more than 80% above or 40% below current

spot prices. Adjustments based on general purpose priceindices may be adequate for exploratory data analysis. Tothe right of each historical data chart, we graph changes inthe real long-term consensus price forecasts (for the 6-10 year rolling aggregate periods) back to January 2008. In-terestingly, a correction in real US crude and natural gasprices expectations has occurred in recent years, with con-trasting trends emerging. The discoveries of vast quantitiesof shale oil and gas, and the high cost of imported crude oil,have clearly changed the balance of long-term real energyprice expectations. In base metals (with the possible excep-tion of aluminium) and in precious metals the trends to-ward higher long-term real price expectations are evident.

Brent1Real 6-10 Year ConsensusCrude Oil Price Forecasts

1 Long-term forecasts for Brent included from April 2011.

DECEMBER 2012


REAL (INFLATION-ADJUSTED) COMMODITY PRICE FORECASTS

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Nickel Prices – Historical DataUS$ per tonne

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Lead Prices – Historical DataUS$ per tonne

Zinc Prices – Historical DataUS$ per tonne

Gold Prices – Historical DataUS$ per oz.

Silver Prices – Historical DataUS$ per oz.

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Lead Prices,Real 6-10 Year Consensus Forecasts

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Zinc Prices,Real 6-10 Year Consensus Forecasts

Gold Prices,Real 6-10 Year Consensus Forecasts

Silver Prices,Real 6-10 Year Consensus Forecasts

DECEMBER 2012


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Spot Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15

% Change

Consensus Forecasts Percentage Changes From Spot PriceDuring the Next Ten Quarters

Crude Oil (WTI)

Copper

Aluminium

Gold

Steel - HRC, US

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12/2012 EMCF

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