Day 1 - Session 1: Strategic metals and the clean-tech revolution
Outlook for commodity prices
Objective Capital Global Mining Investment Conference 2010
Stationers' Hall, City of London
28-29 September 2010
Speaker:
Christoph Eibl - Tiberius Asset Management
14. Continued buying interest of institutional market participants 8 Market Outlook Long term capital flows
15. Market Outlook Conclusion 9 The Lights for commodity investments mainly give positive signals 1. Ecomomic Cycle- Uptrend in industrial production is intact 2. Forward Curves- Gradual improvement 3. Spot Price Level- After correction many markets at attractive entry level 4. Short Term Speculative Capital Flows- Sentiment has turned especially in the agricultural sector 5. Long Term Insitutional Capital Flows- Sustained Interest in Commodities 6. Market Technicals- Lately first technical buy signals Conclusion: Outlook has recently improved significantly
16. Our yearend forecast is still the same 10 Market Outlook Long term market analysis
17. Market Outlook Crude oil Cruide Oil globally attractive; in the US, especially in Cushing, still high excess inventories 11
18. Market Outlook Crude Oil Despite constant demand high increasing excess inventories 12
20. Market Outlook Natural Gas Enhanced storage capacity and high short-exposure argue against a price decline; like in 2009 sudden price reversal is expected in 2010 14
22. Market Outlook Industrial Metals High correlation of industrialmetalsbased on a constant demand; average of the six at the LME trated metals approximantely +0.69 in 2010 16
23. Market Outlook Base Metals Rolling correlation of base metals and stock market currently near top 17
24. Market Outlook Base Metals Tin and copper - the only base metals showing market deficit in 2011 18
26. Market Outlook Precious metal Price ratio between platinum and palladium again on a long-term average 20
27. Market Outlook Gold Gold benefited by the end of Q2 2010 from excessive risk aversion 21
28. Market Outlook Gold The original selling points for gold have disappeared In the year of 2000 Gold market in comparison In the year of 2010 1. Physical market balance High surplus Market deficit 2. Strategic positions 30% of production hedged Mines are unhedged Extreme net-long 3. Spekulative positions Net-short Excessively positive 4. Sentiment/Market penetration Extremely negative Too high 5. Relative Value (CPI, Commod.) Too low 6. Macro-environment - Inflation risks Low/middle Low/middle - Deflation/systemic-risk Middle High 22
29. Market Outlook Gold Seasonal tendence of gold purchase at the futures market and ETFs in the last years 23
30. Market Outlook Softs Increasing Net-Long volume of the Non-Commercials in grain sector 24
31. Market Outlook Wheat Significant production losses compared to previous year caused by extreme weather events 25 USDA: expected declines in wheat production and exports in million tonnes Exports Production
32. Market Outlook Wheat Wheat stocks are still well above critically low level of 2007/08 26
36. Market Outlook Cotton Continuous improvement of the fundamental data due to rising demand 28
37. 29 Market Outlook Conclusion Metals will stay in contango in the course of the next 12 months Backwardation Contango Market surplus High inventories Market deficit Low inventories