ANZ RESEARCH

COMMODITY DAILY
April 26, 2012

Contacts: Mark Pervan Natalie Robertson

+613 9273 3716 | mark.pervan@anz.com +613 9273 3415 | natalie.robertson@anz.com

MARKET HIGHLIGHTS
Oil prices recovered on US Fed comments & equity rally Gold closed flat after Fed comments & weaker US dollar Base metals up on signs of China demand improving Newc coal fell below US$100/t, prompting buying

OVERNIGHT WRAP
Overnight Themes Commodities ended in positive territory after a choppy trading session, tracking buoyant equity markets. The US FOMC statement and Bernanke speech was a positive highlight. Meanwhile better than expected corporate earnings from Apple and Boeing offset the more disappointing March durable goods report registering its weakest result in three-years. The FOMC statement was similar to last months, and Bernankes comments reconfirmed the US Fed would be prepared to take further action if warranted. The Fed maintained the view that the economy has been growing moderately and will continue to do so going forward. The statement acknowledged that there had been "some signs of improvement" in housing and that "inflation has picked up somewhat". Although, there remains considerable slack within the economy and the FOMC confirmed its commitment to leave the fed funds rate at near-zero until at least late 2014. Crude benchmarks recovered in late trading, supported by rallying equity markets and the weaker US dollar. Oil prices broke down following disappointing US durable goods orders and reports of Iran considering the end of their nuclear program in the hopes of avoiding further economic sanctions. Meanwhile, US inventory data was not flash, with crude oil stocks showing a larger than expected increase of almost 4.0mbbls (market: +2.8mbbls), far outweighing the mild 48kbbls/day rise in imports to 8.8mbbls/day and slightly higher refinery operating rates to 84.7%. The US FOMC comments reiterating their commitment to keep interest rates low until late 2014 helped the late recovery, as did positive equity markets. Gold closed flat around US$1,644/oz, in a wide US$22/oz trading range. Gold prices plunged after the Fed statement was released and acknowledged signs of improvement, but Bernanke was vocal about the Fed remaining entirely prepared to take additional balance sheet actions if necessary to boost the economy. Overall, our economists view the statement as slightly more dovish than the market was expecting, potentially boosting expectations of additional stimulus. Base metals rose, with the exception of aluminium. The key copper market sustained gains to almost a 2-week high after the US Fed comments. Additional support also came from SHFE copper futures sliding into a backwardation for the first time since January implying improving demand. Copper participants are also looking at a tight supply situation that has developed in the LME, pushing up premiums for cash metal over 3-month futures to the highest level in 3 years. Newcastle coal front month futures fell 0.9%, with physical prompt Newcastle and South Africa coal prices dipping below the US$100/t level. Prices near to or below the US$100/t level could encourage a pick-up in demand for the cheaply priced coals from Asia. Coal shipments from Australias Newcastle port looks to be rising despite recent bad weather, with a 7% rise in exports in the week ending 23 April to a near record of 2.91mt.

OVERNIGHT RANKED PRICE MOVES (%)

1 .9 1 .4 1 .2 1 .1 0.9 0.6 0.6 0.3 0.3 0.1 (0.2) (0.4) (0.6) (0.9) (1 .5) (1 .0) (0.5) 0.0 0.5 1 .0 1 .5 2.0 2.5 B altic Freight S&P 500 Tin Nickel Lead P latinum Co pper WTI Oil Zinc Go ld USD (DXY) Silver A luminium Co al (NEWC)

WEEK-TO-DATE RANKED PRICE MOVES (%)

1 3.0 4.5 2.5 2.0 1 .4 0.7 0.5 0.4 0.1 (0.3) (0.6) (1 .0) (1 .4) (2.9) (5.0) 0.0 5.0 1 0.0 1 5.0 B altic Freight Tin Lead Co pper WTI Oil Zinc A luminium S&P 500 Go ld Nickel USD (DXY) Co al (NEWC) P latinum Silver

Note: Coal (NEWC) refers to front month futures Sources: Bloomberg, ANZ Commodity Strategy

COMMODITY DATA
Close 1 Day 1 Wk 1 Mth 3 Mth Close 1 Day 1 Wk 1 Mth 3 Mth

Commodities

% Change
2,029 8,304 17,521 1,992 2,080 21,856 (0.6) 0.6 1.1 0.3 0.9 1.2 0.5 2.0 (0.3) 0.7 2.5 4.5 (4.6) (0.8) 0.1 0.1 4.7 (2.3) (8.9) (1.4) (16.1) (5.7) (5.7) (9.3)

Inventories

% Change
5,056 256 101 911 367 14 0.2 (0.2) 1.0 (0.0) (0.2) 0.0 (0.3) (1.8) 1.2 (0.2) (1.3) 3.0 (0.3) 0.1 0.9 1.3 (2.7) 7.1 1.2 (22.1) 5.5 8.1 0.1 51.2

LME BASE METALS (US$/t)

Aluminium Copper Nickel Zinc Lead Tin

LME BASE METALS (kt)

Aluminium Copper Nickel Zinc Lead Tin

PRECIOUS METALS (US$/oz)

Gold Gold (A$/oz) Silver Platinum Palladium 1,644 1,591 30.7 1,555 663 0.1 (0.4) (0.4) 0.6 (1.0) 0.1 0.4 (2.9) (1.4) 0.8 (1.2) (0.9) (4.2) (5.0) 2.3 (5.7) (2.2) (8.9) (3.9) (4.9)

Key Indices
S&P 500 VIX Volatility Index CRB Index LME Metals Index

Close
1,391 17 302 3,503

1 Day
1.4 (7.1) 0.3 0.5

1 Wk
0.4 (9.8) 1.0 1.6

1 Mth
(1.1) 8.7 (3.0) (1.6)

3 Mth
5.0 (9.3) (3.0) (5.5)

% Change

ENERGY (US$/bbl)
WTI Oil* Brent Oil* Sing Gasoil 0.5% Sing Fuel Oil 180cst (US$/t) 104 119 132 725 0.3 0.6 0.0 0.0 1.4 0.9 0.6 0.5 (1.2) (4.1) (3.4) (3.4) 6.7 6.7 2.7 0.5

Freight
Baltic Freight Rate Baltic Capesize Baltic Panamax Baltic Handysize

Close
1,137 1,514 1,692 577

1 Day
1.9 (0.5) 3.9 1.1

1 Wk
13.0 (1.3) 31.1 4.9

1 Mth
23.3 11.2 62.7 1.9

3 Mth
71.8 4.7 143.8 45.7

% Change

OTHER (US$/t)
China HR Coil (RmB/t) Richards Bay Coal API4 Newcastle Coal*** Australia Coking Coal** Iron Ore Spot 4,346 99 103 212 147 (0.3) (0.6) (0.9) 0.0 (0.9) (0.8) (1.0) 0.7 (1.2) (0.6) (4.7) (6.1) 1.7 (0.7) 2.4 (5.3) (12.5) (3.4) 2.7

Currencies
DXY - USD Index AUD/USD - Aussie NZD/USD - Kiwi

Close
79.0 1.033 0.812

1 Day
(0.2) 0.5 0.3

1 Wk
(0.6) (0.3) (0.5)

1 Mth
(0.1) (0.3) (0.4)

3 Mth
0.2 (3.6) (2.6)

% Change

US$ /t 2,900 2,700 2,500 2,300 2,1 00 1 ,900 A pr US$ /t 2,600 2,400 2,200 2,000 1 ,800 1 ,600 A pr US$ /bbl 1 20 10 1 1 00 90 80 70 A pr Jun Jun Jun

ALUMINIUM

US$ /t 1 0,000 9,500 9,000 8,500 8,000 7,500 7,000 6,500

COPPER

US$ /t 28,000 26,000 24,000 22,000 20,000 1 8,000 1 6,000

NICKEL

A ug

Oct

Dec

Feb

A pr US$ /o z 1 ,900 1 ,800 1 ,700 1 ,600 1 ,500 1 ,400

Jun

A ug

Oct

Dec

Feb

A pr US$ /o z 50.0 45.0 40.0 35.0 30.0 25.0

Jun

A ug

Oct

Dec

Feb

ZINC

GOLD

SILVER

A ug

Oct

Dec

Feb

A pr US$ /t 1 25 1 20 15 1 10 1 1 05

Jun

A ug

Oct

Dec

Feb A$ 12 .1 1 .09 1 .06 1 .03 1 .00 0.97 0.94

A pr

Jun

A ug

Oct

Dec

Feb

WTI OIL

NEWCASTLE COAL

AUD

A ug

Oct

Dec

Feb

A pr

Jun

A ug

Oct

Dec

Feb

A pr

Jun

A ug

Oct

Dec

Feb

Notes: * Front-month futures ** Weekly prices ***Newcastle ICE coal futures contract Sources: Bloomberg, McCloskey, ANZ Commodity Strategy

ANZ FORECASTS
ANZ Forecast Table1
COMMODITY
BASE METALS Aluminium Copper Nickel Zinc Lead Tin PRECIOUS METALS Gold Platinum Palladium Silver ENERGY WTI NYMEX Dated Brent Uranium BULKS Thermal coal2 Premium hard coking Hard coking Semi-soft coking coal Iron ore lump Iron ore fines OTHER METALS Alumina Molybdenum Cobalt EXCHANGE RATES AUD/USD NZD/USD EUR/USD USD/JPY USD/CAD USD/CNY US$ US$ US$ C$ Yuan 1.08 0.82 1.46 81.03 0.96 6.46 1.05 0.83 1.41 76.78 0.99 6.38 1.04 0.79 1.35 77.48 1.01 6.36 1.06 0.83 1.33 80.06 1.00 6.29 1.05 0.84 1.35 78.96 0.99 6.27 1.09 0.86 1.36 75.67 1.00 6.23 1.10 0.88 1.37 73.00 1.02 6.14 1.10 0.90 1.37 70.67 1.04 6.10 1.10 0.90 1.37 70.00 1.06 6.08 1.10 0.90 1.36 70.00 1.08 #/NA 1.10 0.90 1.34 70.00 1.10 #/NA US$/t US$/lb US$/lb 326 16.7 18.3 300 14.6 17.1 262 13.4 15.1 272 14.3 15.2 268 14.8 15.1 280 15.8 16.2 288 16.3 16.8 291 16.5 17.0 288 16.8 17.5 288 16.9 18.0 291 16.7 18.0 US$/t US$/t US$/t US$/t US$/t US$/t 130.0 330.0 300.0 275.0 206.1 171.8 130.0 315.0 290.0 230.0 202.0 168.3 130.0 285.0 265.0 208.0 177.6 148.0 130.0 235.0 225.0 171.0 168.0 140.0 115.0 206.0 196.0 151.0 175.2 146.0 115.0 215.0 195.0 170.0 180.0 150.0 115.0 220.0 200.0 175.0 183.9 152.0 115.0 220.0 200.0 175.0 183.9 152.0 125.0 225.0 200.0 175.0 181.5 150.0 125.0 225.0 200.0 175.0 176.7 146.0 125.0 220.0 195.0 170.0 173.2 142.0 US$/bbl US$/bbl US$/lb 102.5 117.0 56.4 89.5 112.9 51.8 94.1 109.3 52.6 102.9 118.5 51.9 105.5 123.9 54.5 108.5 123.0 60.5 111.0 123.0 65.0 114.5 124.5 68.5 116.5 125.0 71.5 116.0 123.5 74.0 114.5 121.0 76.0 US$/oz US$/oz US$/oz US$/oz 1,508 1,785 760 38.5 1,706 1,771 752 38.9 1,683 1,531 630 31.8 1,691 1,609 683 32.7 1,704 1,665 677 33.4 1,760 1,698 725 35.0 1,800 1,713 775 36.2 1,840 1,765 820 37.4 1,855 1,795 850 37.5 1,825 1,765 850 36.9 1,770 1,725 838 36.3 US$/lb US$/lb US$/lb US$/lb US$/lb US$/lb 1.18 4.16 11.05 1.02 1.16 13.08 1.09 4.07 9.98 1.01 1.11 11.16 0.95 3.41 8.34 0.86 0.90 9.45 0.99 3.77 8.90 0.92 0.95 10.38 0.97 3.87 8.23 0.91 0.93 10.16 1.02 3.98 8.75 0.92 0.96 10.10 1.05 4.08 9.45 0.95 0.99 10.35 1.06 4.08 10.00 0.98 1.02 10.55 1.05 4.13 10.40 1.01 1.05 10.80 1.05 4.15 10.45 1.03 1.06 10.95 1.06 3.95 10.15 1.04 1.07 10.80 Unit Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13

Note 1: Average prices Note 2: Thermal coal prices are for JPY year starting April 1 Note 3: Historical data are actuals Sources: Bloomberg, ANZ Commodity Strategy, ANZ FX Strategy

The distribution of this document may be restricted by law in certain jurisdictions. Persons who receive this document must inform themselves about and observe all relevant restrictions. 1. COUNTRY/REGION SPECIFIC INFORMATION: AUSTRALIA. This document is distributed in Australia by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (ANZ). ANZ holds an Australian Financial Services licence no. 234527. A copy of ANZ's Financial Services Guide is available at http://www.anz.com/documents/AU/aboutANZ/FinancialServicesGuide.pdf and is available upon request from your ANZ point of contact. If trading strategies or recommendations are included in this document, they are solely for the information of wholesale clients (as defined in section 761G of the Corporations Act 2001 Cth). Persons who receive this document must inform themselves about and observe all relevant restrictions. BRAZIL. This document is distributed in Brazil by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) only for the information of the Central Bank of Brazil. No securities are being offered or sold in Brazil under this document, and no securities have been and will not be registered with the Securities Commission - CVM. BRUNEI. JAPAN. KUWAIT. MALAYSIA. TAIPEI. This document is distributed in each of Brunei, Japan, Kuwait, Malaysia and Taipei by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) on a cross-border basis. EUROPEAN ECONOMIC AREA (EEA): UNITED KINGDOM. Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (ANZ) is authorised and regulated in the United Kingdom by the Financial Services Authority (FSA). This document is distributed in the United Kingdom by ANZ solely for the information of persons who would come within the FSA definition of eligible counterparty or professional client. It is not intended for and must not be distributed to any person who would come within the FSA definition of retail client. Nothing here excludes or restricts any duty or liability to a customer which ANZ may have under the UK Financial Services and Markets Act 2000 or under the regulatory system as defined in the Rules of the FSA. GERMANY. This document is distributed in Germany by the Frankfurt Branch of ANZ solely for the information of its clients. OTHER EEA COUNTRIES. This document is distributed in the EEA by ANZ Bank (Europe) Limited (ANZBEL) which is authorised and regulated by the FSA in the United Kingdom, to persons who would come within the FSA definition of eligible counterparty or professional client in other countries in the EEA. This document is distributed in those countries solely for the information of such persons upon their request. It is not intended for, and must not be distributed to, any person in those countries who would come within the FSA definition of retail client. HONG KONG. This document is distributed in Hong Kong by the Hong Kong branch of Australia and New Zealand Banking Group Limited (ABN 11 005 357 522), which is registered by the Hong Kong Securities and Futures Commission to conduct Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. If in doubt about the contents of this document, you should obtain independent professional advice. INDIA. If this document is received in India, only you (the specified recipient) may print it and before doing so, you must specify on it your name and place of printing. Further copying or duplication of this document is strictly prohibited. PEOPLES REPUBLIC OF CHINA. If and when the material accompanying this document is distributed by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (ANZ) or an affiliate (other than Australia and New Zealand Bank (China) Company Limited ("ANZ C")), the following statement and the text below is applicable: No action has been taken by ANZ or any affiliate which would permit a public offering of any products or services of such an entity or distribution or re-distribution of this document in the Peoples Republic of China (PRC). Accordingly, the products and services of such entities are not being offered or sold within the PRC by means of this document or any other document. This document may not be distributed, re-distributed or published in the PRC, except under circumstances that will result in compliance with any applicable laws and regulations. If and when the material accompanying this document relates to the products and/or services of ANZ C, the following statement and the text below is applicable: This document is distributed by ANZ C in the Mainland of the PRC. SINGAPORE. This document is distributed in Singapore by the Singapore branch of Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (ANZ) solely for the information of accredited investors, expert investors or (as the case may be) institutional investors (each term as defined in the Securities and Futures Act Cap. 289 of Singapore). ANZ is licensed in Singapore under the Banking Act Cap. 19 of Singapore and is exempted from holding a financial advisers licence under Section 23(1)(a) of the Financial Advisers Act Cap. 100 of Singapore. In respect of any matters arising from, or in connection with the distribution of this document in Singapore, contact your ANZ point of contact. UNITED ARAB EMIRATES. This document is distributed in the United Arab Emirates (UAE) or the Dubai International Financial Centre (as applicable) by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (ANZ). This document: does not, and is not intended to constitute an offer of securities anywhere in the UAE; does not constitute, and is not intended to constitute the carrying on or engagement in banking, financial and/or investment consultation business in the UAE under the rules and regulations made by the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or the United Arab Emirates Ministry of Economy; does not, and is not intended to constitute an offer of securities within the meaning of the Dubai International Financial Centre Markets Law No. 12 of 2004; and, does not constitute, and is not intended to constitute, a financial promotion, as defined under the Dubai International Financial Centre Regulatory Law No. 1 of 200. ANZ DIFC Branch is regulated by the Dubai Financial Services Authority (DFSA). The financial products or services described in this document are only available to persons who qualify as Professional Clients or Market Counterparty in accordance with the provisions of the DFSA rules. In addition, ANZ has a representative office (ANZ Representative Office) in Abu Dhabi regulated by the Central Bank of the United Arab Emirates. ANZ Representative Office is not permitted by the Central Bank of the United Arab Emirates to provide any banking services to clients in the UAE. UNITED STATES. If and when this document is received by any person in the United States or a "U.S. person" (as defined in Regulation S under the US Securities Act of 1933, as amended) (US Person) or any person acting for the account or benefit of a US Person, it is noted that ANZ Securities, Inc. (ANZ S) is a member of FINRA (www.finra.org) and registered with the SEC. Also, ANZ Ss address is 277 Park Avenue, 31st Floor, New York, NY 10172, United States of America (Tel: +1 212 801 9160 Fax: +1 212 801 9163). This document is distributed in the United States by ANZ S (a wholly owned subsidiary of Australia and New Zealand Banking Group Limited (ABN 11 005 357 522)), which accepts responsibility for its content. Information on any securities referred to in this document may be obtained from ANZ S upon request. Any US Person receiving this document and wishing to effect transactions in any securities referred to in this document must contact ANZ S, not its affiliates..

2. DISCLAIMER: Except if otherwise specified above, this document is issued and distributed in your country/region by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (ANZ), on the basis that it is only for the information of the specified recipient or permitted user of the relevant website (collectively, recipient). This document may not be reproduced, distributed or published by any recipient for any purpose. It has been prepared without taking into account the objectives, financial situation or needs of any person. Nothing in this document is intended to be an offer to sell, or a solicitation of an offer to buy, any product, instrument or investment, to effect any transaction or to conclude any legal act of any kind. If, despite the foregoing, any services or products referred to in this document are deemed to be offered in the jurisdiction in which this document is received or accessed, no such service or product is intended for nor available to persons resident in that jurisdiction if it would be contradictory to local law or regulation. Such local laws, regulations and other limitations always apply with non-exclusive jurisdiction of local courts. Before making an investment decision, recipients should seek independent financial, legal, tax and other relevant advice having regard to their particular circumstances. The views and recommendations expressed in this document are the authors. They are based on information known by the author and on sources which the author believes to be reliable, but may involve material elements of subjective judgement and analysis. Unless specifically stated otherwise: they are current on the date of this document and are subject to change without notice; and, all price information is indicative only. Any of the views and recommendations which comprise estimates, forecasts or other projections, are subject to significant uncertainties and contingencies that cannot reasonably be anticipated. On this basis, such views and recommendations may not always be achieved or prove to be correct. Indications of past performance in this document will not necessarily be repeated in the future. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. Additionally, this document may contain forward looking statements. Actual events or results or actual performance may differ materially from those reflected or contemplated in such forward looking statements. All investments entail a risk and may result in both profits and losses. Foreign currency rates of exchange may adversely affect the value, price or income of any products or services described in this document. The products and services described in this document are not suitable for all investors, and transacting in these products or services is considered risky. ANZ and its related bodies corporate and affiliates, and the officers, employees, contractors and agents of each of them (including the author) (Affiliates), do not make any representation as to the accuracy, completeness or currency of the views or recommendations expressed in this document. Neither ANZ nor its Affiliates accept any responsibility to inform you of any matter that subsequently comes to their notice, which may affect the accuracy, completeness or currency of the information in this document. Except as required by law, and only to the extent so required: neither ANZ nor its Affiliates warrant or guarantee the performance of any of the products or services described in this document or any return on any associated investment; and, ANZ and its Affiliates expressly disclaim any responsibility and shall not be liable for any loss, damage, claim, liability, proceedings, cost or expense (Liability) arising directly or indirectly and whether in tort (including negligence), contract, equity or otherwise out of or in connection with this document. If this document has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. ANZ and its Affiliates do not accept any Liability as a result of electronic transmission of this document. Disclosure of Interests ANZ and its Affiliates may have an interest in the products and services described in this document as follows: They may receive fees from customers for dealing in the products and/or services described in this document, and their staff and introducers of business may share in such fees or receive a bonus that may be influenced by total sales. They or their clients may have or have had interests or long or short positions in the products and/or services described in this document, and may at any time make purchases and/or sales in them as principal or agent. They may act or have acted as market-maker in products described in this document. ANZ may rely on information barriers and other arrangements to control the flow of information contained in one or more areas within ANZ into other areas of ANZ. Further details on the above disclosures are available upon request from your ANZ point of contact.