CONSENSUS FORECAST - FocusEconomics · 2016-01-20 · consensus . forecast. summary 2 energy 8....

CONSENSUS FORECAST

SUMMARY 2ENERGY 8

BRENT CRUDE OIL 8

WTI CRUDE OIL 10

NATURAL GAS 13

THERMAL COAL 16

COKING COAL 19

URANIUM 21

ETHANOL 23

GASOIL 25

GASOLINE 27

BASE METALS 29ALUMINIUM 29

ALUMINA & ALUM. ALLOY 32

COPPER 34

LEAD 37

NICKEL 40

TIN 43

ZINC 46

IRON ORE 49

STEEL EUR & STEEL USA 52

PRECIOUS METALS 54GOLD 54

SILVER 57

PALLADIUM 60

PLATINUM 63

AGRICULTURAL 66CORN 66

SOYBEANS 68

WHEAT 70

COCOA & SUGAR 72

COFFEE & OATS 74

COTTON & WOOL 76

NOTES 78

PUBLICATION DATE FORECASTS COLLECTED

INFORMATION AVAILABLE NEXT EDITION

19 January 2016Up to and including 18 January

13 January - 18 January 201616 February 2016

Commodities • January 2016

ContributorsARNE POHLMAN Chief EconomistARMANDO CICCARELLI Head of ResearchRICARDO ACEVES Senior EconomistRICARD TORNÉ Senior EconomistOLGA COSCODAN Economist

CARL KELLY EconomistTERESA KERSTING EconomistDIRINA MANÇELLARI EconomistANGELA BOUZANIS EconomistROBERT HILL Economist

ERIC DENIS Economist JEAN-PHILIPPE POURCELOT Economist DAVID AMPUDIA Research AssistantANDREA VETRUGNO Research AssistantMIRIAM DOWD Editor

FOCUSECONOMICS Summary

FocusEconomics Consensus Forecast | 2

January 2016

SummaryOUTLOOK | Prices foreseen rising in 2016 after likely bottoming out in Q4 2015Commodities prices fell further in the last quarter of 2015 and continued to reflect the abundant supply of several products as well as softening demand, in particular in emerging economies. The strengthening of the U.S. dollar—the currency in which most commodities are traded—also contributed to the price weakness in the last quarter of 2015. On average, commodities prices decreased 26.7% year-on-year in Q4 2015, which represented the fourth consecutive quarter of a double-digit drop. Nonetheless, the fall in Q4 was less pronounced than the plunge registered in Q3. This suggests that the commodity rout found the floor in the last quarter of 2015 and that prices have likely begun a gradual, albeit slow, recovery in 2016.

Analysts expect commodities prices to increase slowly throughout 2016 and to continue rising in 2017 due to a gradual adjustment in the oil market, global cuts in production of many raw materials, geopolitical risks and adverse weather conditions. That said, the global scenario for commodities prices remains challenging. At the beginning of 2016, the global economy continued to show signs of moderation. The financial volatility seen at the end of 2015 carried over to the beginning of this year against a backdrop of decelerating economic activity in key emerging economies, while once-supportive developed economies have failed to maintain momentum. Moreover, diverging monetary policy in major central banks has increased yield differentials between the U.S. and other advanced economies, which will contribute to a further strengthening of the dollar. In this context and from a low base of comparison, commodities prices are expected to increase 9.8% year-on-year in Q4 2016. Nonetheless, risks to the outlook remain, which prompted analysts to reduce the forecasts for the vast majority of commodities in this report.

ENERGY | Sanctions relief for Iran paves the way for a surge in oil exportsEnergy prices continued to drop toward the end of 2015 and beginning of 2016, dragged down by a sharp fall in oil prices. Crude oil prices plummeted to below USD 30 per barrel due to the continued rise in OPEC and U.S. production and increased speculation that Iranian exports will soon climb. On 15 January, global benchmark Brent Crude Oil fell to USD 28.1 per barrel and U.S. benchmark WTI Crude Oil dropped to USD 29.5 per barrel. The lows observed in the previous months and the dismal start to the year reflected concerns that the global oil glut will be prolonged. U.S. inventories shot up toward the end of last year

Outlook deteriorates

50

75

100

125

Q1 12 Q1 13 Q1 14 Q1 15 Q1 1665

80

95

110

Jun Jul Aug Sep Oct Nov Dec Jan

Q4 2016

Q4 2017

Global Commodity Index (GCI) Change in GCI Forecasts

Note: Index, Q1 2007=100Q1 2012 - Q4 2016.

Note: GCI, evolution of Q4 2016 and Q4 2017 forecasts during the last 7 months.



January 2016

and OPEC’s crude oil production rose to a three-year high in 2015, with much of the increase coming from Saudi Arabia and Iraq. Moreover, the implementation of Iran’s nuclear deal with world powers triggered sanctions relief for Tehran that will pave the way for a surge in oil exports. Iranian oil exports are expected to add one million barrels per day within six months of the sanctions being canceled, reaching a pre-sanctions level of 4.0% of global demand. Since other energy prices are linked to oil, prices for other energy products, including natural gas, also dropped at the outset of 2016.

Energy prices fell 40.7% annually in Q4 2015, which is a lesser decline than the 46.2% plunge in Q3 2015. The Consensus view of the commodities analysts we polled is that energy prices, led mainly by crude oil, will start to show signs of a gradual recovery in the second half of 2016, although the recovery remains fragile. Energy prices are expected to rise 30.2% year-on-year in Q4 2016, with Brent Crude Oil averaging USD 52.6 per barrel and WTI Crude Oil averaging USD 50.4 per barrel. Nonetheless, analysts cut the energy price forecast by 6.7% over last month’s Consensus.

BASE METALS | China’s deceleration exacerbates price dropsThe downward trend in prices for base metals persisted through December and into the beginning of January with many prices registering multi-year lows. The core issue remains centered in China, where demand for base metals looks lackluster while markets are still well supplied. Moreover, the torrid start to the year—on 15 January, copper prices fell to USD 4,328 per metric ton and aluminium prices dropped to USD 1,476 per metric ton—was exacerbated by the fall in investor sentiment, which was severely affected by the plunge in oil prices and high volatility in Chinese equity markets. Iron ore also suffered due to the elevated uncertainty in the market. Iron ore traded at USD 40.0 per metric ton on 15 January and higher demand for the largest mined commodity is likely to remain muted in the coming months due to the beginning of the Chinese New Year (8 February). A post-New Year rebound in demand appears unlikely, given the ongoing deceleration in China’s economy and the current increase in its stockpile of metals.

Following the 28.7% plunge in Q4 2015, base metals prices are expected to remain low in the first half of 2016. Going forward, prices for base metals are expected to increase, albeit gradually, due to production cuts in response to the low price environment. The Consensus view of analysts is that base metals prices will begin to recover in the second half of 2016 and are seen increasing on average 7.4% year-on-year in Q4 2016. That said, the forecast was reduced by 4.0% from last month’s projection as analysts took into account the recent record-low prices as well as continued unfavorable global demand.

Change in Base Metals ForecastsQ4 2017Q4 2016

-20 -15 -10 -5 0

Alumina

Iron Ore

Steel (USA)

Steel (EUR)

Nickel

Zinc

Base Metals

Copper

Aluminium

Tin

Lead

-20 -15 -10 -5 0

Alumina

Steel (EUR)

Nickel

Steel (USA)

Iron Ore

Base Metals

Copper

Zinc

Aluminium

Lead

Tin

Note: Percentage change between December 2015 and January 2016.

.Source: FocusEconomics Consensus Forecast.

Change in Energy ForecastsQ4 2017Q4 2016

-20 0 20 40

Brent

WTI

Natural Gas

Coking Coal

Gasoline

Energy

Gasoil

Thermal Coal

Uranium

Ethanol

-20 -10 0 10 20 30

Gasoline

WTI

Coking Coal

Brent

Natural Gas

Energy

Thermal Coal

Gasoil

Uranium

Ethanol





January 2016

PRECIOUS METALS | Gold and silver benefit from financial volatilityAmong the precious metals, gold and, to a lesser extent, silver have benefited from the bloodshed in financial markets and also from the recent rise in geopolitical tensions. Gold prices have rallied in recent weeks and, on 15 January, gold closed the trading day at USD 1,090 per troy ounce. Gold has gained some of the ground lost in December, although prices still remain at low levels. Silver gained some upside momentum at the beginning of the year in the wake of gold price strength. However, the metal continues to struggle to hold ground above USD 14.0 per troy ounce, in part due to the weakness in base metals prices. That said, prices for palladium and platinum, given their more relevant industrial uses, have been dragged down sharply as have most of the base metals.

The outlook for precious metals is negative. After an 8.0% year-on-year fall in Q4 2015, analysts expect prices to continue falling throughout 2016. Robust demand from China and India should support demand, in particular for gold and silver. However, precious metals are expected to be under pressure from higher interest rates in the U.S. following the Fed’s monetary policy tightening that began in December. Analysts surveyed this month by FocusEconomics project that prices will fall on average 2.0% in the last quarter of 2016. Analysts cut Q4 2016’s forecast by 2.7% over the previous month’s projection.

AGRICULTURAL | El Niño may affect cocoa, coffee and soybeansPrices for agricultural products, particularly for grains, began to stabilize at the beginning of 2016 from the falls observed at the end of 2015. The stabilization stemmed from output prospects in Brazil, weather concerns mainly related to El Niño and an increase in demand. Following a 5.6% year-on-year decrease in Q4 2015, agricultural prices are expected to increase this year. Although dynamics in agricultural prices are more positive relative to other commodities, risks associated to the duration and intensity of El Niño weigh on the outlook. The weather phenomenon, currently under way, is expected to be one of the strongest on record and is foreseen reaching maximum strength between December 2015 and February 2016. According to analysts, the commodities with the highest concentration of supply in regions affected by El Niño are cocoa, coffee and soybeans, as well as copper. On the demand side, the commodities most exposed to the weather phenomenon are U.S. natural gas and heating oil.

Our panel of analysts projects that agricultural prices will start rising from Q1 2016 and will accelerate though the remainder of the year. Commodities analysts surveyed this month by FocusEconomics project that agricultural prices will increase 8.1% year-on-year in Q4 2016. That said, the Q4 2016 forecast was slightly reduced from the previous month’s projection, mainly on the back of less positive prospects for cocoa, coffee, cotton, soybeans and wheat, which more than offset an increase in the price forecasts for corn, sugar and wool.

Ricardo Aceves Senior Economist

Change in Precious Metals ForecastsQ4 2017Q4 2016

-6 -4 -2 0

Platinum

Silver

Precious Metals

Gold

Palladium

-12 -9 -6 -3 0

Platinum

Silver

Palladium

Precious Metals

Gold



Change in Agricultural ForecastsQ4 2017Q4 2016

-3 0 3 6

Cocoa

Coffee

Cotton

Wheat

Soybeans

Agricultural

Oats

Corn

Wool

Sugar

-8 -4 0 4 8

Cocoa

Wheat

Soybeans

Cotton

Agricultural

Coffee

Corn

Oats

Wool

Sugar





January 2016

Spot Forecasts FcstsCommodity Unit (15-Jan) Change YTD Q1 16 ∆ Spot Q4 16 ∆ Spot Q4 17 ∆ Spot Q4 15-Q3 17

Brent USD per barrel 28.1 -22.9% 40.4 +43.8% 52.6 +87.4% 60.1 +114.1%

WTI USD per barrel 29.5 -20.7% 37.8 +28.3% 50.4 +71.2% 56.9 +93.1%

Natural Gas USD per MMBtu 2.18 -5.6% 2.46 +13.0% 2.94 +35.1% 3.28 +50.3%

Thermal Coal USD per metric ton 52.6 0.0% 53.6 +1.8% 55.8 +6.1% 56.8 +7.9%

Coking Coal USD per metric ton 96 0.0% 78.0 -18.8% 80.2 -16.4% 82.6 -14.0%

Uranium USD per pound 34.8 +1.5% 40.4 +16.2% 44.7 +28.7% 49.5 +42.4%

Ethanol USD per gallon 1.39 -4.8% 1.42 +2.2% 1.35 -2.9% 1.25 -10.1%

Gasoil USD per metric ton 256 -20.4% 477 +86.4% 565 +120.7% 603 +135.5%

Gasoline USD per gallon 1.09 -43.8% 1.32 +21.7% 1.63 +49.6% 1.84 +69.4%

Aluminium USD per metric ton 1,476 -1.6% 1,468 -0.5% 1,603 +8.6% 1,686 +14.2%

Alumina USD per metric ton 277 -3.0% 215 -22.4% 233 -16.1% 248 -10.7%

Aluminium Alloy USD per metric ton 1,566 -2.0% 1,668 +6.5% 1,770 +13.0% 1,883 +20.2%

Copper USD per metric ton 4,328 -8.0% 4,643 +7.3% 5,123 +18.4% 5,536 +27.9%

Lead USD per metric ton 1,601 -10.9% 1,680 +5.0% 1,788 +11.7% 1,925 +20.3%

Nickel USD per metric ton 8,360 -4.8% 9,384 +12.3% 10,876 +30.1% 12,487 +49.4%

Tin USD per metric ton 13,296 -8.9% 14,881 +11.9% 15,915 +19.7% 17,526 +31.8%

Zinc USD per metric ton 1,468 -7.8% 1,626 +10.7% 1,802 +22.8% 2,040 +38.9%

Iron Ore USD per metric ton 40.0 -8.0% 45.2 +13.0% 48.7 +21.6% 54.1 +35.1%

Steel (EUR) USD per metric ton 354 +3.4% 352 -0.5% 369 +4.4% 376 +6.2%

Steel (USA) USD per metric ton 393 +3.7% 401 +2.1% 444 +13.1% 460 +16.9%

Gold USD per troy ounce 1,090 +2.6% 1,076 -1.3% 1,083 -0.7% 1,170 +7.3%

Silver USD per troy ounce 14.0 +1.0% 14.4 +3.0% 15.1 +8.1% 16.4 +17.1%

Palladium USD per troy ounce 492 -11.4% 591 +20.1% 679 +38.0% 737 +49.9%

Platinum USD per troy ounce 839 -3.3% 900 +7.3% 976 +16.4% 1,078 +28.4%

Corn USD cents per bushel 355 +1.4% 391 +10.1% 402 +13.3% 411 +15.9%

Soybeans USD cents per bushel 878 +1.7% 889 +1.3% 912 +3.9% 955 +8.7%

Wheat USD cents per bushel 437 +3.9% 510 +16.9% 531 +21.6% 565 +29.5%

Cocoa USD per metric ton 2,969 -9.2% 3,256 +9.7% 3,206 +8.0% 3,391 +14.2%

Sugar USD cents per pound 14.5 -2.7% 14.1 -3.0% 14.3 -1.4% 14.4 -0.9%

Coffee USD cents per pound 119 -6.7% 134 +12.1% 144 +20.3% 157 +31.8%

Oats USD cents per bushel 254 -6.8% 271 +7.0% 271 +6.8% 271 +6.7%

Cotton USD cents per pound 60.7 -3.1% 64.9 +6.8% 64.1 +5.6% 67.1 +10.6%

Wool AUD per kilogram 1,282 +1.3% 1,310 +2.2% 1,292 +0.8% 1,334 +4.1%.



January 2016

Quarterly Data | Prices and Price Index (Q1 2007 = 100) | Q1 2015 - Q4 2017Energy - Nominal Prices - Average of Period

Unit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Crude Oil Brent USD per barrel 53.9 61.9 50.4 43.6 40.4 43.5 48.2 52.6 54.2 55.7 58.6 60.1Crude Oil WTI USD per barrel 48.6 57.7 46.6 41.9 37.8 40.9 46.2 50.4 51.4 52.9 55.6 56.9Natural Gas U.S. H. Hub USD per MMBtu 2.9 2.7 2.8 2.1 2.5 2.5 2.8 2.9 3.1 3.0 3.2 3.3Thermal Coal Australia USD per metric ton 64.6 63.1 59.6 54.4 53.6 52.9 53.3 55.8 56.2 56.9 56.5 56.8Coking Coal Australia USD per metric ton 142 125 116 103 78 78 80 80.2 80.8 81.6 81.8 82.6Uranium U3O8 USD per pound 37.8 36.9 36.5 36.1 40.4 42.5 43.5 44.7 46.5 47.7 48.3 49.5Ethanol NY Harbor USD per gallon 1.6 1.7 1.6 1.6 1.4 1.5 1.4 1.4 1.4 1.3 1.3 1.3Gasoil 0.2% Sulph. USD per metric ton 517 570 473 395 477 481 528 565 569 569 586 603Gasoline RBOB USD per gallon 1.7 2.3 2.1 1.6 1.3 1.6 1.7 1.6 1.8 2.0 2.0 1.8

2016 2017Commodity

2015

Energy Prices | Index, Q1 2007 = 100

0

100

200

300

400

Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

Brent WTI

Gasoline Natural Gas

Thermal Coal Uranium

Base Metals - Nominal Prices - Average of PeriodUnit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Aluminium LME USD per metric ton 1,802 1,769 1,594 1,495 1,468 1,515 1,549 1,603 1,617 1,645 1,658 1,686Alumina Australia USD per metric ton 438 427 389 324 215 227 227 233 236 238 242 248Alum. Alloy LME USD per metric ton 1,797 1,769 1,700 1,619 1,668 1,701 1,735 1,770 1,805 1,841 1,878 1,883Copper LME USD per metric ton 5,845 6,051 5,272 4,884 4,643 4,827 4,956 5,123 5,266 5,355 5,443 5,536Lead LME USD per metric ton 1,811 1,939 1,718 1,684 1,680 1,697 1,731 1,788 1,842 1,866 1,894 1,925Nickel LME USD per metric ton 14,391 13,043 10,589 9,412 9,384 9,799 10,336 10,876 11,342 11,635 12,095 12,487Tin LME USD per metric ton 18,374 15,614 15,217 15,073 14,881 15,303 15,629 15,915 16,914 17,103 17,124 17,526Zinc LME USD per metric ton 2,080 2,188 1,846 1,611 1,626 1,677 1,742 1,802 1,848 1,909 1,963 2,040Iron Ore CFR China USD per metric ton 62.9 58.3 55.1 46.9 45.2 46.3 47.6 48.7 49.8 51.4 52.6 54.1Steel (Europe) HRC EUR USD per metric ton 458 439 424 362 352 366 370 369 378 402 389 376Steel (Usa) HRC USA USD per metric ton 544 456 461 390 401 420 431 444 452 456 458 460

2015 2016 2017Commodity

Base Metals Prices | Index, Q1 2007 = 100

0

100

200

300

Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

Aluminium Copper Nickel

Lead Zinc Tin

Energy Prices | Index, Q1 2007 = 100 and Evol of Fcts.

50

100

150

200

Q1 12 Q1 13 Q1 14 Q1 15 Q1 1680

100

120

140

160


Q4 2016

Q4 2017

Base Metals Prices | Index, Q1 2007 = 100 and Evol of Fcts.

40

60

80

100

Q1 12 Q1 13 Q1 14 Q1 15 Q1 1655

65

75

85


Q4 2016

Q4 2017



January 2016

Quarterly Data | Prices and Price Index (Q1 2007 = 100) | Q1 2015 - Q4 2017

Precious Metals Prices | Index, Q1 2007 = 100

0

100

200

300

Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

Gold Platinum

Silver Palladium

Precious Metals - Nominal Prices - Avg. of PeriodUnit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Gold LME USD per troy ounce 1,219 1,193 1,125 1,105 1,076 1,063 1,073 1,083 1,139 1,144 1,160 1,170Silver H&H USD per troy ounce 16.8 16.4 14.9 14.8 14.4 14.4 14.8 15.1 16.1 16.3 16.5 16.4Palladium LME USD per troy ounce 786 759 616 606 591 622 650 679 692 705 717 737Platinum LME USD per troy ounce 1,193 1,126 988 906 900 910 952 976 989 995 1,014 1,078

2015 2016 2017Commodity

Agricultural - Nominal Prices - Average of PeriodUnit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Corn CBOT USD cents per bushel 366 354 364 363 391 395 399 402 409 408 406 411Soybeans CBOT USD cents per bushel 980 957 942 868 889 894 893 912 930 929 931 955Wheat CBOT USD cents per bushel 528 503 464 435 510 516 521 531 540 550 558 565Cocoa ICCO USD per metric ton 2,917 3,068 3,255 3,301 3,256 3,255 3,221 3,206 3,310 3,324 3,351 3,391Sugar ISA USD cents per pound 14.4 13.0 12.1 14.4 14.1 13.8 13.8 14.3 14.1 14.0 14.1 14.4Coffee Arabica USD cents per pound 149 133 123 125 134 137 143 144 149 154 156 157Oats CBOT USD cents per bushel 318 286 272 263 271 271 271 271 271 271 271 271Cotton ICAC USD cents per pound 60.2 62.9 61.5 61.3 64.9 63.9 64.6 64.1 65.5 65.6 65.7 67.1Wool AWEX EMI AUD per kilogram 1,079 1,236 1,241 1,234 1,310 1,303 1,296 1,292 1,291 1,305 1,320 1,334

2015 2016 2017Commodity

Agricultural Prices | Index, Q1 2007 = 100

0

100

200

300

Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

Corn Oats Soybeans

Cocoa Wheat Coffee

Precious Metals Prices | Index, Q1 2007 = 100 and Evol of Fcts.

150

200

250

300

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16160

180

200

220


Q4 2016

Q4 2017

Agricultural Prices | Index, Q1 2007 = 100 and Evol of Fcts.

100

125

150

175

200

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16120

140

160

180


Q4 2016

Q4 2017

FOCUSECONOMICS Crude Oil


January 2016

Brent Crude Oil (prices in USD/bbl, aop) .

1m ago 31-Dec-15 1y ago38.2 36.4 47.8

-26.4% -22.9% -41.2%

Forecasts and change from spot

Forecast Forecast Forecast (last 6 months)Period ∆ Spot

40.443.8%52.6

87.4%60.1

114.1%

Q4 16

Q4 17

Spot28.1

15-Jan-16

Q1 16

Brent Crude Oil In early January, Brent Crude Oil prices fell below USD 30 per barrel on the back of the continued rise in U.S. inventories at the beginning of the year and due to increased speculation that Iranian exports will soon climb. On 13 January, the global benchmark had fallen to USD 29.3 per barrel—a low last seen in April 2004. Following the price plunge, oil prices continued to fall in the subsequent days. On 15 January, the global benchmark was USD 28.1 per barrel, which was 26.4% below the price registered on the same day in December 2015 and was 22.9% cheaper on a year-to-date basis. In annual terms, prices fell 41.2%.

Oil’s dismal start to the year refl ected that U.S. crude oil inventories jumped by 234,000 barrels at the beginning of January and reached nearly 490 million, according to EIA fi gures. Moreover, Iran is expected to add 1 million barrels a day of exports within six months of the sanctions being canceled. The implementation of Iran’s nuclear deal with world powers, triggered sanctions relief for Tehran that will pave the way for a surge in oil exports within as little as a couple of weeks. On top of that, recent data suggest that China’s economy continues to slow, which raises concerns of slowing oil consumption.

Brent Crude Oil prices averaged USD 43.6 per barrel in Q4 2015 and are seen rising gradually through 2016. This month’s Consensus Forecast projects prices to average USD 52.6 per barrel in Q4 2016, and analysts see prices rising and averaging USD 60.1 per barrel in Q4 2017.

In light of the current developments, analysts have begun to adjust their price projections. This month, 12 panelists revised down their forecasts for Q4 2016, while 7 analysts left their projections unchanged.

Economists surveyed this month consider that prices will start to increase in Q2 2016 and the Consensus view is that prices will continue rising in the following quarters, although the view is split. While the majority of analysts predict higher prices in Q4 2016, with a maximum forecast of USD 69.0 per barrel, some panelists still consider that prices will remain low, with a minimum forecast of USD 38.5 per barrel.

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per bbl (aop) 61.6 79.6 111.4 111.7 108.7 98.9 52.4 46.7 57.8 62.9 66.2 69.4Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per bbl (aop) 53.9 61.9 50.4 43.6 40.4 43.5 48.2 52.6 54.2 55.7 58.6 60.1Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per bbl (aop) 40.1 40.2 40.9 42.1 43.4 45.0 46.6 48.3 49.9 51.7 52.8 53.4Futures Prices (15-Jan) - 28.9 29.7 30.4 31.2 31.9 32.6 33.2 33.8 34.4 35.0 35.5

Brent prices and futures prices

20

40

60

80Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

30

40

50

60

70

Dec-14 Jun-15 Dec-15 Jun-16 Dec-16

.

↑ - ↑ 1 ↑ 1

= 6 = 7 = 3

↓ 14 ↓ 12 ↓ 5

Forecast Revisions (by number of panelists)

Q1 16 Q4 16 Q4 17

Panelist Spread

Energy

FOCUSECONOMICS Crude Oil January 2016


Brent Crude Oil | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 40.0 45.0 50.0 55.0 55.0 55.0 60.0 60.0 50.0 60.0ANZ 39.0 41.0 44.0 47.0 50.0 53.0 56.0 58.0 - -Barclays Capital 30.0 36.0 40.0 43.0 - - - - 37.0 -BBVA 29.9 22.2 30.7 38.5 41.8 45.1 46.7 49.3 30.3 45.7BMI Research - - - - - - - - 42.5 53.0BNP Paribas 32.0 36.0 37.0 41.0 45.0 41.0 44.0 52.0 37.0 46.0BofA Merrill Lynch 44.0 49.0 54.0 53.0 - - - - - -Capital Economics 33.6 32.5 37.5 42.5 48.8 53.8 56.3 58.8 37.0 54.0Commerzbank 50.0 53.0 58.0 63.0 63.0 - - - - -Credit Agricole 48.0 51.0 54.0 57.0 61.0 66.0 69.0 71.0 - -Credit Suisse 51.0 57.0 60.0 64.0 - - - - 58.0 65.0Danske Bank 42.0 46.0 52.0 58.0 - - - - 50.0 -Dekabank 39.0 48.7 55.0 58.0 59.0 63.0 64.5 61.5 50.0 62.0Deutsche Bank 49.0 55.0 55.0 55.0 58.0 58.0 62.0 62.0 53.5 60.0DZ Bank 45.0 45.0 45.0 45.0 - - - - 45.0 -E2 Economia 40.6 45.0 49.3 53.6 55.4 56.1 56.8 57.5 47.1 56.4Ecoanalitica 40.6 45.0 49.3 53.6 55.4 56.1 56.8 57.5 47.1 56.4EIU 48.0 51.5 55.7 57.4 64.5 65.6 68.0 70.0 53.2 67.0Emirates NBD 50.0 53.0 55.0 64.0 - - - - 55.3 -Goldman Sachs 43.0 50.0 - 54.0 - - - - - -Itaú BBA 42.7 44.6 48.9 53.2 54.7 54.7 54.7 54.7 47.4 54.7JPMorgan 28.0 25.0 32.0 40.0 38.0 40.0 45.0 50.0 31.3 43.3Lloyds TSB 37.0 35.0 45.0 55.0 62.0 65.0 67.0 70.0 43.0 66.0Macquarie Bank 39.0 40.0 47.0 52.0 56.0 62.0 65.0 62.0 44.5 61.3Natixis 30.0 36.0 44.0 48.0 52.0 54.0 - - 39.5 55.0Nordea 43.0 46.0 52.0 56.0 60.0 63.0 67.0 70.0 49.0 65.0NORD/LB 33.0 37.0 39.0 45.0 49.0 50.0 - - 37.0 51.0Novo Banco - - - - - - - - 63.0 -OCBC World Markets 35.0 40.0 45.0 50.0 - - - - - -Oxford Economics 45.0 46.4 47.8 49.2 50.6 52.0 53.4 54.8 47.1 52.7Société Générale 50.5 48.0 53.0 - - - - - 54.4 65.0Toronto-Dominion 30.0 38.0 47.0 59.0 59.0 61.0 63.0 63.0 44.0 62.0UBS - - - - - - - - 57.5 70.0Unicredit 44.0 51.0 65.0 69.0 - - - - 57.0 -Summary 43.20 41.95 45.87 50.44 53.42 54.96 57.2 59.4Minimum 28.0 22.2 30.7 38.5 38.0 40.0 44.0 49.3 30.3 43.3Maximum 51.0 57.0 65.0 69.0 64.5 66.0 69.0 71.0 63.0 70.0Median 40.6 45.0 49.1 53.6 55.4 55.6 58.4 59.4 47.1 58.2Consensus 40.4 43.5 48.2 52.6 54.2 55.7 58.6 60.1 46.7 57.8Additional ForecastsEIA (Jan. 2016) 36.3 40.0 41.7 42.3 44.0 47.7 52.0 56.3 40.2 50.0IMF (Oct. 2015) 58.0 59.1 60.1 61.1 - - - - 59.6 63.3

Brent Crude Oil

4 | Brent Crude Q4 2017 | evol. of fcst.

40

60

80

100


MaximumConsensusMinimum

2 | Futures and Consensus Forecast

20

40

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Spot Jun-16 Dec-16 Jun-17

ConsensusFuturesSpot

1 | Brent Crude Oil

3 | Brent Crude Q4 2016 | evol. of fcst.

20

40

60

80

100



Notes and sources

General: Brent Crude Oil spot prices in USD per barrel (bbl). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of Brent Crude Oil in USD/bbl (aop).2 Consensus Forecast of quarterly Brent Crude Oil average prices and futures prices traded on the New York Mercantile

Exchange (NYMEX) at each quarter. Futures prices are as of spot date. 3 Quarterly price of Brent Crude Oil, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of Brent Crude Oil, evolution of Q4 2017 forecast during the last 8 months.

30

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Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Crude Oil


January 2016

WTI Crude Oil (prices in USD/bbl, aop) .

1m ago 31-Dec-15 1y ago37.3 37.1 46.4

-21.1% -20.7% -36.5%



37.828.3%50.4

71.2%56.9

93.1%

Q4 16

Q4 17

Spot29.5

15-Jan-16

Q1 16

WTI Crude OilThe price of WTI Crude Oil fell to a multiyear-low at the beginning of January. On 15 January, it traded at USD 29.5 per barrel, coming dangerously below the critical USD 30.0 per barrel level. The reading was 21.1% below the price registered on the same day in December 2015 and is 20.7% lower since the beginning of 2016. An annual comparison shows that prices declined 36.5%.

Heightened risk aversion as a result of the rout in Chinese equity markets was the key catalyst of the recent drop, although weak demand remains unfavorable. Moreover, the chronic oversupply is showing no signs of abating as the EIA’s latest fi gures showed that U.S. oil production increased to a four-month high of 9.2 million barrels per day in the fi nal week of 2015. While recent tensions between Saudi Arabia and Iran caused oil prices to rise momentarily, it appears that this geopolitical tension is merely an obstacle in the path to the two countries fi nding common ground to curb production.

WTI Crude Oil prices averaged USD 41.9 per barrel in Q4 2015. Analysts surveyed this month by FocusEconomics expect that following the plunge in Q4 2015, oil prices will rise gradually in Q2 2016. For Q4 2016, panelists expect WTI Crude Oil prices to average USD 50.4 per barrel. For Q4 2017, panelists expect oil prices to rise further to USD 56.9 per barrel.

The current plunge in crude oil prices, caused by U.S. supply glut, weak Chinese demand and the anticipated return of Iranian production continue to weigh on analysts’ sentiment. As a result, this month 11 forecasters revised down their forecasts for Q4 2016, while 6 left them unchanged.

WTI Crude Oil prices declined massively at the end of 2015 and the Consensus view of our panel of analysts is that the benchmark price for U.S. oil will increase slowly in the coming quarters. The upward trend expected through 2016 mainly refl ects expectations for the supply glut to narrow in the U.S. as well as improving economic prospects for the U.S. economy. However, analysts’ opinions vary. For Q4 2016, the maximum price forecast is USD 67.0 per barrel, while the minimum price is USD 36.5 per barrel.

.

↑ - ↑ 1 ↑ 1

= 7 = 6 = 2

↓ 12 ↓ 11 ↓ 5


Q1 16 Q4 16 Q4 17

Panelist Spread

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per bbl (aop) 61.8 79.5 94.9 94.1 98.0 93.0 48.7 45.5 56.0 60.4 63.5 66.6Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per bbl (aop) 48.6 57.7 46.6 41.9 37.8 40.9 46.2 50.4 51.4 52.9 55.6 56.9Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per bbl (aop) 37.5 37.6 38.2 39.4 40.8 42.5 44.5 46.3 47.9 49.6 50.6 51.1Futures Prices (15-Jan) - 29.4 30.4 31.4 32.3 33.1 33.9 34.4 34.9 35.4 36.3 36.7

WTI prices and futures prices

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80Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

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70




WTI Crude Oil | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 40.0 45.0 50.0 55.0 55.0 55.0 60.0 60.0 50.0 60.0ANZ 36.0 38.0 42.0 46.0 50.0 53.0 56.0 58.0 - -Barclays Capital 29.0 34.0 41.0 45.0 - - - - 37.0 -BBVA 27.9 20.2 28.7 36.5 39.8 43.1 44.7 47.3 28.3 43.7BMI Research - - - - - - - - 42.0 53.0BNP Paribas 32.0 36.0 36.0 40.0 43.0 41.0 43.0 50.0 36.0 44.0BofA Merrill Lynch 41.0 48.0 53.0 50.0 - - - - - -Capital Economics 33.5 32.5 37.5 42.5 48.8 53.8 56.3 58.8 37.0 54.0CIBC World Markets - - - - - - - - 45.0 62.0Commerzbank 47.0 50.0 55.0 60.0 60.0 - - - - -Credit Suisse 47.5 55.8 60.0 62.5 - - - - 56.4 63.3Danske Bank 39.0 43.0 50.0 56.0 - - - - 47.0 -Dekabank 37.3 46.7 53.0 56.0 57.0 61.0 62.5 59.5 48.0 60.0Deutsche Bank 45.0 50.0 50.0 50.0 53.0 53.0 57.0 57.0 48.8 55.0DZ Bank 42.0 42.0 42.0 42.0 - - - - 42.0 -E2 Economia 39.4 42.6 45.8 48.9 50.5 51.4 52.2 53.0 44.2 51.8Ecoanalitica 39.4 42.6 45.8 48.9 50.5 51.4 52.2 53.0 44.2 51.8EIU 43.2 47.4 51.2 53.4 60.0 61.0 63.2 65.1 48.8 62.3Emirates NBD 46.0 45.0 53.0 58.0 - - - - 50.3 -Goldman Sachs 38.0 45.0 - 50.0 - - - - - -Itaú BBA 40.0 41.9 46.2 50.6 52.1 52.3 52.4 52.6 44.7 52.3JPMorgan 27.0 26.0 33.0 40.0 38.0 40.0 45.0 50.0 51.8 -Lloyds TSB 35.0 34.0 44.0 54.0 60.0 63.0 65.0 68.0 42.0 60.0Macquarie Bank 36.0 37.0 45.0 49.0 51.0 57.0 60.0 57.0 41.8 56.3Natixis 28.0 33.0 42.0 46.0 50.0 52.0 - - 37.3 53.0Novo Banco - - - - - - - - 60.0 -NORD/LB 32.0 36.0 38.0 44.0 47.0 49.0 - - 36.0 50.0OCBC World Markets 35.0 40.0 45.0 50.0 - - - - - -Société Générale 47.5 45.0 50.0 - - - - - 49.4 60.0Scotiabank Peru - - - - - - - - 55.0 -Toronto-Dominion 30.0 38.0 48.0 60.0 60.0 62.0 64.0 64.0 44.0 63.0UBS - - - - - - - - 52.5 65.0Unicredit 44.0 50.0 63.0 67.0 - - - - 56.0 -Summary 40.37 39.33 43.55 48.32 50.92 52.15 54.22 56.22Minimum 27.0 20.2 28.7 36.5 38.0 40.0 43.0 47.3 28.3 43.7Maximum 47.5 55.8 63.0 67.0 60.0 63.0 65.0 68.0 60.0 65.0Median 38.5 42.3 45.8 50.0 50.8 53.0 56.3 57.0 44.8 55.6Consensus 37.8 40.9 46.2 50.4 51.4 52.9 55.6 56.9 45.5 56.0Additional ForecastsEIA (Jan. 2016) 36.3 38.0 39.7 40.0 41.0 44.7 49.0 53.3 38.5 47.0IMF (Oct. 2015) 58.0 59.1 60.1 61.1 - - - 59.6 63.3

WTI Crude Oil

4 | WTI Crude Q4 2017 | evol. of fcst.

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100




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1 | WTI Crude Oil

3 | WTI Crude Q4 2016 | evol. of fcst.

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40

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Notes and sources

General: WTI Crude Oil spot prices in USD per Barrel (USD/bbl). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of WTI Crude Oil in USD/bbl (aop).2 Consensus Forecast of quarterly WTI Crude Oil average prices and futures prices traded on the New York Mercantile

Exchange (NYMEX) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of WTI Crude Oil, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of WTI Crude Oil, evolution of Q4 2017 forecast during the last 8 months.

30

60

90

120

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17



3,000

4,000

5,000

6,000

2000 2005 2010 2015 2020 2025 2030 2035

ProductionConsumption

Oil33.7%

Gas32.4%

Coal33.8% Transport

44.9%

Power generation

5.0%

Manufacturing24.1%

Other sectors26.0%

Share of fuel usage in industry

Fact Sheet

Production | %-share in World Consumption | %-share in World

Major producers and consumers in 2014

US19.7%

Saudi Arabia19.5%

Russia18.4%

Canada7.3%

China7.2%

UAE6.3%

Iran6.1%

Iraq5.6%

Kuwait5.3%

Mexico4.7%

US34.6%

China20.1%

Japan7.8%

India7.0%

Brazil5.9%

Russia5.8%

Saudi Arabia5.8%

South Korea4.5%

Germany4.3%

Canada4.3%

2004Total 1,366

thousand million barrels

North America16.4%

Central &South America

7.6%

Europe & Eurasia10.3%

Middle East

54.9%

Africa7.9%

Asia3.0%

Distribution of proven reserves in 2004 and 2014

2014Total 1,700

thousand million barrels

North America13.7%

Central &South America19.4%

Europe & Eurasia

9.1%Middle East

47.7%

Africa7.6%

Asia2.5%

2000 2005 2010 2015 2020 2025 2030 2035Production | Million metric tonsGlobal 3,620 3,947 3,979 4,244 4,441 4,649 4,798 4,884North America 643 638 639 906 1,045 1,088 1,135 1,155Europe and Eurasia 729 850 861 831 844 841 816 803Middle East 1,151 1,226 1,217 1,318 1,270 1,392 1,499 1,566Asia Pacific 383 385 402 398 400 381 364 356Africa 371 474 483 399 439 445 434 436Consumption | Million metric tonsGlobal 3,584 3,919 4,040 4,280 4,534 4,777 4,951 5,065North America 1,062 1,131 1,040 1,033 1,037 1,028 993 947Europe and Eurasia 931 964 906 870 876 873 848 810Middle East 244 293 354 403 437 483 531 567Asia Pacific 999 1,151 1,292 1,467 1,621 1,776 1,905 2,013Africa 119 139 164 179 201 227 257 288

Global production and consumption outlook

Main exchanges and contract size

New York Mercantile Exchange (NYMEX) 1,000 barrelsIntercontinental Exchange (ICE) 1,000 barrelsDubai Mercantile Exchange Limited (DME) 1,000 barrels

Crude Oil futures at a glance

Contract: Crude Oil Futures ContractsTicker: CL (NYMEX), CS (ICE), OQ (DME)Price quotation: USD per barrelSettlement type: Physical and Financial

Factors influencing prices

• Extreme weather conditions• Currency fluctuations

• Geopolitical developments

1

• Speculation, hedging, investment

• OPEC output, supply and spare capacities• Increased demand due to economic growth

• U.S. crude production and inventories data

• Changes in the refining sector, such as a drop in the Refinery Utilization rate

Global production and consumption | Million metric tons

Crude Oil facts

1

• Underlying commodity for the world's largest-volume futures contract—NYMEX.

• Crude oil is in high demand by stakeholders as it is a key source of the world's energy.

• There are four types of oil: light, heavy, and sweet/sour.

• The leading energy commodity futures contract in the world by volume.

Industry IndustrialSectors

Oil usage by sector | share in %Fuel usage in industry | share in %

FOCUSECONOMICS Natural Gas


January 2016

U.S. Henry Hub Natural Gas (prices in USD/MMBtu, aop) .

1m ago 31-Dec-15 1y ago1.64 2.31 3.29

32.9% -5.6% -33.7%



2.4613.0%2.94

35.1%3.28

50.3%

Q4 16

Q4 17

Spot2.18

15-Jan-16

Q1 16

Natural Gas The steady decline in natural gas prices was interrupted in the closing days of 2015—spot prices shot upward as the U.S. National Oceanic and Atmospheric Administration forecast cooler temperatures for parts of the country. This rally has extended into January and, on 15 January, the Henry Hub Natural Gas price closed the trading day at USD 2.18 per one million British thermal units (MMBtu). This fi gure was up 32.9% over the same day last month. However, prices fell 5.6% since the beginning of the year, and are down 33.7% compared to the corresponding date in 2015.

Natural gas prices in the States react abruptly to weather development forecasts as the commodity is used substantially in heating. Until late December, temperatures across the U.S. had been warmer than usual and demand for heating fuels and prices had languished at historical lows. The recent rally may be short lived, however, as inventory data in the U.S. indicates that the drawdown on stockpiles is less than expected.

Natural gas prices are sensitive to short-term meteorological forecasts, and generally see modest increases in spot prices in winter. However, a global supply glut has put downward pressure on prices, including those at the Henry Hub distribution node in Louisiana. Analysts we polled project that prices will recover as the market adjusts to the oversupply. Panelist see the spot price rising to USD 2.94 per MMBtu in Q4 2016 and climbing to USD 3.28 per MMBtu in Q4 2017.

As demand prospects dwindle and pipeline capacity from a number of U.S. fi elds increase over 2017, some panelists have seen it appropriate to revise their forecasts. 6 panelists revised down their projections for Q4 2016, while 3 kept their projections stable, leaving only 1 panelist who revised up their forecast.

Analysts predict, on Consensus, that natural gas prices will increase gradually during the year. For Q4 2016, the maximum price that panelists forecast is USD 3.90 per MMBtu, while the minimum price is USD 2.45 per MMBtu. Fourth quarter forecasts, which coincide with winter months in the U.S., generally have a larger spread as heating needs tend to be more volatile.

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↑ - ↑ 1 ↑ -

= 5 = 3 = 1

↓ 6 ↓ 6 ↓ 5


Panelist Spread

Q4 17Q1 16 Q4 16

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per MMBtu (aop) 3.95 4.37 3.99 2.76 3.73 4.34 2.61 2.68 3.25 3.47 3.65 3.82Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per MMBtu (aop) 2.87 2.73 2.75 2.10 2.46 2.50 2.79 2.94 3.11 3.05 3.15 3.28Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per MMBtu (aop) 2.49 2.45 2.45 2.43 2.49 2.56 2.70 2.79 2.87 2.92 2.96 2.96Futures Prices (15-Jan) - 2.10 2.13 2.19 2.25 2.32 2.38 2.40 2.40 2.43 2.51 2.67

Natural gas prices and futures prices

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2

3

4


1

2

3

4Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

FOCUSECONOMICS Natural Gas January 2016


Natural Gas | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 2.50 2.75 3.00 2.75 3.00 3.25 3.50 3.25 2.75 3.25Barclays Capital 2.65 2.45 3.10 3.15 - - - - 2.84 -BMI Research - - - - - - - - 3.25 3.50BNP Paribas 1.95 2.00 2.40 2.70 - - - - 2.25 3.20BofA Merrill Lynch 3.10 3.30 3.70 3.90 - - - - - -Capital Economics 2.29 2.38 2.63 2.88 3.13 3.38 3.63 3.88 2.50 3.50CIBC World Markets - - - - - - - - 2.70 3.50Credit Suisse 2.50 2.70 2.75 2.85 3.25 3.00 3.25 3.50 2.70 3.25Deutsche Bank 2.30 2.50 2.55 2.70 3.00 3.08 2.96 3.36 2.51 3.10DZ Bank 2.75 2.50 2.80 3.20 - - - - 2.81 -E2 Economia 1.99 2.04 2.20 2.45 2.45 2.37 2.31 2.51 2.17 2.41EIU 2.76 2.95 3.04 3.21 3.75 3.60 3.42 3.92 2.99 3.67Goldman Sachs 2.50 2.75 - 3.00 - - - - - -Itaú BBA 2.42 2.54 2.65 2.77 2.80 2.78 2.77 2.75 2.59 2.77JPMorgan 3.15 2.75 3.10 3.35 - - - - 3.09 -Lloyds TSB 2.20 2.00 2.50 2.80 3.00 2.90 2.80 3.00 2.40 2.90Macquarie Bank 2.30 2.50 2.75 3.25 3.50 3.00 3.50 3.00 2.70 3.25OCBC World Markets 2.02 1.89 2.65 2.50 - - - - - -Société Générale 2.72 2.62 3.12 - - - - - 2.97 3.83Toronto-Dominion 2.25 2.30 2.45 2.60 3.25 3.10 3.40 3.60 2.40 3.34Summary 2.48 2.48 2.64 2.87 3.03 3.08 3.10 3.21Minimum 1.95 1.89 2.20 2.45 2.45 2.37 2.31 2.51 2.17 2.41Maximum 3.15 3.30 3.70 3.90 3.75 3.60 3.63 3.92 3.25 3.83Median 2.46 2.50 2.75 2.85 3.06 3.04 3.33 3.31 2.70 3.25Consensus 2.46 2.50 2.79 2.94 3.11 3.05 3.15 3.28 2.68 3.25Additional ForecastsEIA (Jan. 2016) 2.37 2.47 2.78 2.98 3.27 3.00 3.20 3.41 2.65 3.22IMF (Oct. 2015) 3.20 3.03 3.10 3.23 - - - - 3.14 3.34

U.S. Henry Hub Natural Gas

4 | Natural Gas Q4 2017 | evol. of fcst.

2

3

4

5

6




2.0

2.5

3.0

3.5



1 | Natural Gas | U.S. Henry Hub

3 | Natural Gas Q4 2016 | evol. of fcst.

2

3

4

5



Notes and sources

General: U.S. Henry Hub Natural Gas spot prices in USD per Million of British Thermal Units (MMBtu). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of U.S. Henry Hub Natural Gas in USD/MMBtu (aop).2 Consensus Forecast of quarterly U.S. Henry Hub Natural Gas average prices and futures prices traded on the New York

Mercantile Exchange (NYMEX) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of natural gas, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of natural gas, evolution of Q4 2017 forecast during the last 8 months.

2

3

4

5

6

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Natural Gas January 2016


2,000

3,000

4,000

5,000

2000 2005 2010 2015 2020 2025 2030 2035


Oil33.7%

Gas32.4%

Coal33.8%

Transport1.5%

Power generation

35.7%

Manufacturing40.5%

Other sectors22.3%


Fact Sheet



US21.0%

Russia16.7%

Qatar5.1%Iran

5.0%Canada4.7%

Other47.4%

US22.4%

Russia12.1%

Qatar5.5%

Iran5.2%Canada

5.0%

Other49.8%

2004Total 157 trillion

cubic meters

North America

4.8%


4.4%


Middle East

46.1%

Africa9.1%

Asia8.3%


2014Total 187 trillion

cubic meters

North America

6.5%


4.1%


Middle East

42.7%

Africa7.6%

Asia8.2%

2000 2005 2010 2015 2020 2025 2030 2035Production | Million tonnes of oil equivalent (Mtoe)Global 2,176 2,508 2,878 3,241 3,660 3,971 4,279 4,567North America 694 683 745 870 1,005 1,114 1,205 1,279Europe and Eurasia 843 926 924 931 961 1,049 1,062 1,082Middle East 187 287 431 565 671 734 790 832Asia Pacific 245 327 438 511 621 625 657 758Other 208 286 340 365 402 449 566 616Consumption | Million tonnes of oil equivalent (Mtoe)Global 2,177 2,495 2,868 3,213 3,645 3,964 4,249 4,558North America 721 712 770 865 929 988 1,038 1,112Europe and Eurasia 889 988 1,015 954 1,007 1,051 1,092 1,127Middle East 168 249 347 443 536 598 652 720Asia Pacific 261 358 506 670 848 966 1,053 1,142Other 138 189 230 281 324 360 413 458



New York Mercantile Exchange (NYMEX) 10,000 MMBtuIntercontinental Exchange (ICE) 1,000 ThBtuMulticommodity Exchange India (MCX) 500 MMBtu

Natural gas futures at a glance

Contract: Henry Hub Natural Gas FuturesTicker (open outcry): NGPrice quotation: USD per MMBtuSettlement type: Physical


• Natural gas production• Natural gas held in storage• Economic growth• Net imports• Transportation costs

1

• Extreme weather conditions (e.g., hurricanes) may disrupt production

• Prices of other fuels, mainly petroleum and coal• High residential demand in winter due to space heating• Demand from electric power sector high in summer due to electricity generation for air conditioning

Global production and consumption | Mtoe

Natural gas facts

1

• Third-largest physical commodity futures contract in the world by volume.• Used as a U.S. benchmark price for natural gas, which continues to increase in importance as a global benchmark.• Independent and stand-alone commodity.• The natural gas market is not a global market.

Industry Industrialsectors

Nat. gas usage by sector | share in %Fuel usage in industry | share in %

FOCUSECONOMICS Thermal Coal


January 2016

Australian Thermal Coal (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago52.6 52.6 62.80.0% 0.0% -16.2%



53.61.8%55.86.1%56.87.9%Q4 17

15-Jan-16

Q1 16

52.6Spot

Q4 16

Thermal Coal Thermal coal prices closed 2015 at decade lows, maintaining the almost-uninterrupted downward trend that has been in place since 2011. On 15 January, the spot price for Australian Thermal Coal was USD 52.6 per metric ton. The price was stable compared to the same day in December and on a year-to-date basis. However, in annual terms, prices fell 16.2%.

The price for high-grade Australian Thermal Coal, which is the main benchmark for the Asian market, continued to fall. A combination of chronic oversupply, due mostly to new low-cost production and falling operating costs, and weak demand, particularly from China—the world’s largest coal consumer—have been driving the downward trend. In addition, a mild winter in the northern hemisphere and weakening currencies in producer countries have pushed prices further down in the last months.

Expectations of a recovery in developed countries are tempered by a likely persistent slowdown in China’s economy. Analysts project that, on average, prices will rise only slightly through the year and see them averaging USD 55.8 per metric ton in Q4 2016. At the end of 2017, analysts see prices inching up and averaging USD 56.8 per metric ton in Q4 2017.

Despite the downward pressure on prices stemming from an oversupplied market, 2 panelists revised upward their spot price forecasts for Q4 2016, indicating a more rapid recovery in thermal coal prices than previously expected. However, the majority of analysts surveyed this month maintained their projections for Q4 2016, and 1 panelist lowered their forecast.

The Consensus view among forecasters is that prices will start rising at a modest but steady pace starting in mid-2016 and stabilize in the second half of 2017. However, sentiment among analysts remains mixed. For Q4 2016, the maximum price projected was USD 75.0 per metric ton, while the lowest price forecast was USD 45.5 per metric ton.

.

↑ 1 ↑ 2 ↑ 1

= 5 = 4 = 2

↓ 2 ↓ 1 ↓ 1


Q1 16 Q4 16 Q4 17

Panelist Spread

Thermal Coal prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 72.1 96.3 121.9 98.2 85.8 72.5 60.4 54.7 56.5 58.9 61.2 63.6Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 64.6 63.1 59.6 54.4 53.6 52.9 53.3 55.8 56.2 56.9 56.5 56.8Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 53.9 53.5 53.3 52.9 52.9 53.0 52.9 53.2 53.7 55.0 55.8 56.7Futures Prices (15-Jan) - 49.8 48.7 47.1 46.0 44.8 44.0 44.0 44.0 42.3 42.3 41.6

50

55

60

65

70


40

50

60

70Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

FOCUSECONOMICS Thermal Coal January 2016


Thermal Coal | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ANZ 52.0 55.0 55.0 57.0 58.0 60.0 62.0 65.0 - -BMI Research - - - - - - - - 59.0 60.0BMO Capital Markets 67.8 55.0 55.0 55.0 55.0 57.5 57.5 57.5 58.2 56.9Capital Economics 48.0 47.5 46.5 45.5 44.5 43.5 42.5 41.0 47.0 43.0Commerzbank 45.0 48.0 50.0 55.0 55.0 - - - - -Deutsche Bank 52.0 52.0 50.0 50.0 50.0 50.0 48.0 48.0 51.0 49.0EIU 56.1 59.0 62.0 63.1 63.0 63.5 63.8 64.0 60.1 63.6JPMorgan 56.0 56.0 56.0 56.0 - - - - 56.0 -Macquarie Bank 52.5 50.0 48.0 46.0 44.0 44.0 42.0 42.0 49.1 43.0Société Générale 56.3 54.8 55.0 - - - - - 53.8 56.2Toronto-Dominion 50.0 52.0 55.0 75.0 80.0 80.0 80.0 80.0 58.0 80.0Summary 54.86 53.25 53.09 54.55 56.02 56.56 56.73 56.66Minimum 45.0 47.5 46.5 45.5 44.0 43.5 42.0 41.0 47.0 43.0Maximum 67.8 59.0 62.0 75.0 80.0 80.0 80.0 80.0 60.1 80.0Median 52.3 53.4 55.0 55.0 55.0 57.5 57.5 57.5 56.0 56.5Consensus 53.6 52.9 53.3 55.8 56.2 56.9 56.5 56.8 54.7 56.5Additional ForecastsIMF (Oct. 2015) 68.6 64.2 57.2 59.8 - - - - 62.4 62.4

Australian Thermal Coal

4 | Thermal Coal Q4 2017 | evol. of fcst.

20

40

60

80

100




40

45

50

55

60



1 | Australian Thermal Coal

3 | Thermal Coal Q4 2016 | evol. of fcst.

40

50

60

70

80


Maximum

Consensus

Minimum

Notes and sources

General: Astralian Thermal Coal spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of Astralian Thermal Coal in USD/mt (aop).2 Consensus Forecast of quarterly Astralian Thermal Coal average prices and futures prices traded on the New York

Mercantile Exchange (NYMEX) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of Astralian Thermal Coal, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of Astralian Thermal Coal, evolution of Q4 2017 forecast during the last 8 months.

50

60

70

80

90

100

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Thermal Coal January 2016


2,000

3,000

4,000

5,000

2000 2005 2010 2015 2020 2025 2030 2035


Oil33.7%

Gas32.4%

Coal33.8%

Transport0.4%

Power generation

61.6%

Manufacturing34.2%

Other sectors3.8%


Fact Sheet



China46.9%

US12.9%

Indonesia7.2%

Australia7.1%

India6.2%

Other19.7%

China50.6%

US11.7%

India9.3%

Japan3.3%

South Africa2.3%

Other22.9%

2004Total 909 billion tons

North America28.0%


2.2%


Africa5.5%

Asia32.7%



North America27.5%


1.6%


Africa3.6%

Asia32.3%

2000 2005 2010 2015 2020 2025 2030 2035Production | Million tonnes of oil equivalent (Mtoe)Global 2,287 2,943 3,548 3,867 4,265 4,394 4,492 4,586North America 615 622 594 537 498 468 446 390Europe and Eurasia 430 441 435 427 402 393 388 385Middle East 0.7 1.0 0.6 0.7 0.7 0.7 0.6 0.6Asia Pacific 1,077 1,692 2,317 2,685 3,140 3,298 3,411 3,543Other 165 187 201 217 224 234 247 267Consumption | Million tonnes of oil equivalent (Mtoe)Global 2,343 2,926 3,469 3,816 4,242 4,366 4,455 4,564North America 605 616 562 438 438 364 300 254Europe and Eurasia 527 515 486 474 457 435 404 377Middle East 7.4 9.3 8.8 8.2 8.2 8.2 8.2 8.2Asia Pacific 1,101 1,672 2,288 2,766 3,193 3,400 3,567 3,726Other 103 114 125 129 146 159 176 198



New York Mercantile Exchange (NYMEX) 1,000 metric tonsIntercontinental Exchange (ICE) 1,000 metric tonsEuropean Energy Exchange (EEX) 1,000 metric tons

Thermal coal futures at a glance

Contract: Coal API 5 FOB Newcastle FuturesTicker: ACMPrice quotation: USD per metric tonSettlement type: Physical


• Thermal coal production• Transportation cost• Productive capacity of mines

• Electricity generation costs1

• Prices of other fuels, mainly gas and petroleum• Drop in production due to natural disasters• Drop in production due to strikes or accidents in mines

• Economic growth, mainly in China and India


Thermal coal facts

1

• API 5 Coal tracks the fob Newcastle market and is the most closely-watched futures contract with global influence.• Power-generating companies prefer short-term coal supply contracts that rely more on cash market purchases.• The thermal coal market is divided into the Atlantic and the Pacific markets.

Industry IndustrialSectors

Coal usage by sector | share in %Fuel usage in industry | share in %

FOCUSECONOMICS Coking Coal


January 2016

Coking CoalCoking coal prices continue to weaken, furthering the downward trend that began in 2014. On 15 January, coking coal traded at USD 96.0 per metric ton, which was 5.9% lower than on the same day in December. While prices were stable on a year-to-date basis, they plunged by 33.8% in annual terms.

Following the trend of many key commodities, coking coal has been in decline due to weak demand in the past two years from Asian economies, in particular China. In addition, Australia, which is a key global shipper of coking coal, has maintained its production levels despite the declining prices, reinforcing downward price pressures.

A slowdown in emerging economies’ demand for coal and a sustained supply caused prices to fall sharply in 2015. Analysts surveyed this month expect prices to remain low in Q4 2016 and to average USD 80.2 per metric ton. Prices are expected to remain broadly stable through 2017 and average USD 82.6 per metric ton in Q4.

Australian Coking Coal (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago102 96.0 145

-5.9% 0.0% -33.8%



78.0-18.8%80.2

-16.4%82.6

-14.0%

Spot96.0

15-Jan-16

Q1 16

Q4 16

Q4 17

Coking Coal prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 243 265 297 252 210 158 121 81.8 82.6 92.5 103 113Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 142 125 116 103 78.0 77.8 79.5 80.2 80.8 81.6 81.8 82.6Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 78.3 77.9 77.8 77.5 77.8 78.2 79.1 79.5 79.9 80.1 80.3 80.3Futures Prices (15-Jan) - 92.8 80.7 83.8 80.8 79.7 80.2 76.1 77.4 78.0 76.4 -

1 | Australian Coking Coal

50

100

150

200

250

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

2 | Coking Coal | evol. of fcst.

80

90

100

110


Q4 2016 Q4 2017

3 | Consensus and futures

70

80

90

100



Notes and sources

General: Australian coking coal spot prices in USD per metric tone (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of Australian coking coal in USD/mt (aop).2 Quarterly price of Australian coking coal, evolution of Q4 2016 and Q4 2017 forecast during the last 8 months.3 Consensus Forecast of quarterly Australian coking coal average prices and futures prices traded on the New York Mercantile Exchange (NYMEX) at the end of each quarter.

Futures prices are as of spot date.

40

80

120

160


FOCUSECONOMICS Coal


January 2016

6,000

7,000

8,000

9,000

2007 2008 2009 2010 2011 2012 2013 2014


Steel production

76.0%

Alumina refining16.0%

Pharmaceuticals5.0%Cement

production3.0%

Share of coal usage in industry

Fact Sheet



China46.9%

US12.9%

Indonesia7.2%

Australia7.1%

India6.2%

Other19.7%

China50.6%

US11.7%

India9.3%

Japan3.3%

South Africa2.3%

Other22.9%


North America28.0%


2.2%


Africa5.5%

Asia32.7%



North America27.5%


1.6%


Africa3.6%

Asia32.3%

2007 2008 2009 2010 2011 2012 2013 2014Production | Million metric tonsGlobal 6,681 6,943 7,062 7,473 7,969 8,187 8,231 8,165North America 1,124 1,145 1,052 1,067 1,080 1,005 977 989Europe and Eurasia 1,249 1,267 1,198 1,209 1,273 1,293 1,244 1,196Africa 251 255 251 259 257 263 264 268Asia Pacific 3,971 4,187 4,477 4,854 5,263 5,528 5,644 5,607Other 84.6 87.7 83.5 84.5 95.6 99.2 101 105Consumption | Million metric tonsGlobal 6,976 7,104 7,143 7,487 7,779 7,948 8,034 8,058North America 1,106 1,088 966 1,019 965 846 876 877Europe and Eurasia 1,094 1,071 985 1,016 1,053 1,109 1,056 989Africa 163 181 178 176 172 168 170 173Asia Pacific 4,241 4,403 4,691 4,956 5,247 5,517 5,618 5,718Other 371 362 323 319 342 309 314 300



New York Mercantile Exchange (NYMEX) 1,000 metric tonsIntercontinental Exchange (ICE) 1,000 metric tons

Coking coal futures at a glance

Contract: Australian Hard Coking Coal FuturesTicker: ALWPrice quotation: USD per metric tonSettlement type: Financial


• Coking coal production• Transportation costs• Productive capacity of mines

1

• Drop in production due to natural disasters

• Economic growth, mainly in China, India and Japan• Drop in production due to strikes or accidents in mines

• Most coking coal is procured between producers and steel makers with annual contracts


Coking coal facts

1

• Coking coal also referred to as metallurgical coal is essentially used for iron and steel production.• Coking coal for steel production needs to be high quality (lower sulphur and phosphorous content).• Coking coal is more expensive than thermal coal (used in power generation).

FOCUSECONOMICS Uranium


January 2016

UraniumUranium prices have been broadly stable over the course of the last month. Uranium traded at USD 34.8 per pound on 15 January, which was down 2.9% over the same day in December and 1.5% higher on a year-to-date basis. Prices were 1.4% lower compared to the same day last year.

Prices have been subdued over the course of the last year, in particular due to lack of demand from U.S. utility companies as excess inventories covered most of the requirements. Low prices have discouraged investment in new uranium projects and this is likely to translate into a supply gap in the long term as it takes years to complete new mining projects. Despite the demand fl uctuation, last year was crucial for uranium as Japan reopened two of its nuclear plants for the fi rst time since the Fukushima accident.

Higher demand coupled with a supply shortage should bring prices up in 2016. Panelists expect prices to average USD 44.7 per pound in Q4 2016. They see prices picking up over the course of 2017 to an average of USD 49.5 per pound in Q4.

Uranium U3O8 (prices in USD/lb, aop) .

1m ago 31-Dec-15 1y ago35.8 34.3 35.3-2.9% 1.5% -1.4%



40.416.2%44.7

28.7%49.5

42.4%

Q4 16

Q4 17

Spot34.8

15-Jan-16

Q1 16

Uranium U3O8 prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per lb (aop) 46.4 46.4 57.0 48.9 38.7 33.4 36.8 39.4 42.6 45.7 48.4 51.0Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per lb (aop) 37.8 36.9 36.5 36.1 40.4 42.5 43.5 44.7 46.5 47.7 48.3 49.5Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per lb (aop) 39.8 40.4 40.9 42.0 42.5 43.0 43.1 43.5 43.9 44.5 44.7 44.9Futures Prices (15-Jan) - 34.8 34.8 34.8 35.0 35.0 35.3 35.3 35.5 35.6 35.6 35.7

1 | Uranium U308

25

30

35

40

45

50

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

2 | Uranium U3O8 | evol. of fcst.

40

45

50

55

60


Q4 2016 Q4 2017


30

35

40

45

50



Notes and sources

General: Uranium U308 spot prices in USD per pound (lb). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of Uranium U308 in USD/lb (aop).2 Quarterly prices of Uranium U308, evolution of Q4 2016 and Q4 2017 forecasts during the last 8 months.3 Consensus Forecast of quarterly Uranium U308 average prices and futures prices traded on the New York Mercantile Exchange (NYMEX) at the end of each quarter. Futures

prices are as of spot date.

30

35

40

45

50


FOCUSECONOMICS Uranium


January 2016

60

70

80

90

100

2013 2014 2015 2016 2017 2018 2019


North America37.9%

South & Central America

0.8%


Middle East0.2%

Africa0.6%

Asia Pacific13.8%

North America37.9%

S & C America

0.8%


Middle East0.2%

Africa0.6%

Asia Pacific13.9%

Major nuclear energy producers and consumers in 2014

Fact Sheet



Kazakhstan41.1%

Canada16.2%

Australia8.9%

Niger7.2%

Namibia5.8%

Other20.7%

USA30.6%

EU27.2%

China17.1%

Russia6.2%

Japan2.4%

Other16.5%

20085 million metric tons known recoverable uranium resources

Australia35.9%

Kazakhstan23.6%

Russia15.8%

South Africa12.6%

Canada12.2%

USA0.0%

Known recoverable Uranium resources in 2008 and 2013

2013 6 million metric tons known recoverable uranium resources

Australia42.9%

Kazakhstan17.1%

Russia12.7%

Canada12.4%

Namibia9.6%

USA5.2%

2013 2014 2015 2016 2017 2018 2019 2020Production from Mines | Thousand metric tonsGlobal 69.9 65.3 68.1 70.7 72.8 77.0 82.2 87.9Kazakhstan 26.5 26.4 26.9 26.9 26.9 27.3 27.8 28.3Canada 11.0 10.7 12.9 14.1 14.2 15.5 16.4 17.8Australia 5.0 5.7 6.2 6.2 6.1 6.5 7.5 8.5Africa 10.5 10.7 12.9 14.1 14.2 15.5 16.4 17.8Other 16.9 11.8 9.2 9.4 11.4 12.2 14.1 15.5Consumption | Thousand metric tonsGlobal 76.7 76.9 77.4 79.1 83.2 88.4 92.8 97.9 European Union 23.3 23.1 23.0 22.5 24.0 24.0 22.9 23.6 United States 23.1 22.2 22.8 23.1 23.1 23.1 23.6 24.4 China 7.9 9.1 9.8 12.5 14.8 17.1 18.3 20.4 Russia 6.0 6.4 6.0 6.2 6.5 7.0 7.6 7.6 Other 16.4 16.1 15.8 14.8 14.8 17.2 20.4 21.9



New York Mercantile Exchange (NYMEX) 250 poundsIntercontinental Exchange (ICE) 250 pounds

Uranium U308 futures at a glance

Contract: UxC Uranium U3O8 Futures ContractsTicker: UXPrice quotation: USD cents per poundSettlement type: Financial


• Mine production

1

• China has secured long-term contracts with Kazakhstan

• New nuclear reactors and increase in nuclear capacity

• Steady increase in demand for electricity • Russia stopped selling uranium

at market prices to build up inventories

Global production and consumption | Thousand metric tons

Uranium U308 facts

1

• Spot prices apply only to marginal trading, which represents about one quarter of supply. Most contracts are long-term.• Primary production from mines is mainly supplemented by secondary supplies coming from ex-military material.• Nuclear power has been slowly making a comeback as an electricity source of choice since the Fukushima disaster in2017

Consumption | %-share in WorldProduction | %-share in World

FOCUSECONOMICS Ethanol


January 2016

EthanolEthanol prices have been falling at a steady rate since the end of 2014 and reached multi-year lows in January. The fall was mainly driven by the slump in oil prices, which impacted demand for renewable fuel. The spot price for ethanol registered on 15 January was USD 1.39 per gallon. Ethanol prices fell 10.3% over the same day of the previous month and were 4.8% lower on a year-to-date basis. Ethanol prices were down 13.1% over the same day last year.

Despite the U.S. EPA’s recent adoption of higher targets for renewable fuel in the national gasoline supply, which may sustain ethanol prices going forward, ethanol producers deemed the target as insuffi cient. However, the main force behind the current downward trend is the ongoing weakness in the price of oil, which acts as a substitute for ethanol and thus lowers demand.

Against this backdrop, FocusEconomics Consensus Forecast panelists expect prices for ethanol to keep falling and average USD 1.35 per gallon in Q4 2016. Prices are expected to drop further in 2017 as panelists see an average price of USD 1.25 per gallon in Q4 2017.

NY Harbor Ethanol (prices in USD/gal, aop) .

1m ago 31-Dec-15 1y ago1.55 1.46 1.60

-10.3% -4.8% -13.1%



1.422.2%1.35-2.9%1.25

-10.1%

Spot1.39

15-Jan-16

Q1 16

Q4 16

Q4 17

Ethanol prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per gal (aop) 1.82 1.96 2.73 2.37 2.51 2.39 1.60 1.47 1.31 1.35 1.38 1.42Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per gal (aop) 1.56 1.67 1.60 1.59 1.42 1.49 1.45 1.35 1.36 1.32 1.28 1.25Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per gal (aop) 1.39 1.42 1.45 1.49 1.50 1.49 1.47 1.45 1.42 1.38 1.35 1.32Futures Prices (15-Jan) - 1.35 1.37 1.39 1.40 1.41 1.41 1.41 1.40 1.40 1.38 1.38

1 | NY Harbor Ethanol

1.0

1.5

2.0

2.5

3.0

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

2 | NY Harbor Ethanol | evol. of fcst.

1.0

1.5

2.0

2.5

3.0


Q4 2016 Q4 2017


1.2

1.3

1.4

1.5



Notes and sources

General: New York Harbor Ethanol spot prices in USD per gallons (gal). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of New York Harbor Ethanol in USD/gal (aop).2 Quarterly prices of New York Harbor Ethanol, evolution of Q4 2016 and Q4 2017 forecast during the last 8 months.3 Consensus Forecast of quarterly New York Harbor Ethanol average prices and futures prices traded on the New York Mercantile Exchange (NYMEX) at the end of each

quarter. Futures prices are as of spot date.

1.0

1.5

2.0

2.5


FOCUSECONOMICS Ethanol


January 2016

0

50

100

150

2000 2005 2010 2015 2020 2025 2030 2035


Compressed Natural Gas

4.0%

Electricity1.4%

Ethanol (E85)54.2%

LNG0.1% LPG

1.3%

Fuel-Electric Hybrid39.2% Chevrolet

21.5%

Chrysler4.4%Dodge

11.3%

Ford29.8%

GMC13.8%

Honda6.4%

Mercedes-Benz4.2%

Toyota8.4%

Fact Sheet



USA59.6%

Brazil27.4%

Europe4.7%

China2.9%

Canada2.2%

Other3.2%

USA57.9%

Brazil24.8%

Europe7.9%

China3.0%

Canada2.8%

Other3.6%

2010Total 9,488

thousand barrels

Brazil5.9%

Canada31.4%

China0.1%Finland

3.2%India7.6%Jamaica

5.2%Korea1.6%

Mexico5.1%

Netherlands19.1%

Nigeria2.2%

Philippines1.7%

Singapore1.5%

UAE7.5%

UK7.9%

2014Total 20,149

thousand barrels

Brazil14.5%

Canada43.7%

China0.4%

Finland0.8%

India5.2%

Jamaica2.7%

Korea4.7%

Mexico3.8%

Netherlands3.1%

Nigeria2.2%

Philippines8.8%

Singapore1.2%

UAE8.9%

UK0.0%

2000 2005 2010 2015 2020 2025 2030 2035Biofuels Production | Million tonnes of oil equivalent (Mtoe)Global 9.2 19.7 59.6 68.3 82.1 99.4 113.9 132.1North America 3.1 7.6 26.3 31.4 35.6 41.4 45.1 48.5South America 5.3 8.1 18.0 20.8 25.1 30.4 35.3 40.8Europe and Eurasia 0.7 3.2 11.2 10.4 13.6 15.6 15.7 15.2Asia Pacific 0.1 0.8 4.0 5.6 7.3 11.2 16.4 22.8Other 0.0 0.0 0.0 0.2 0.5 0.8 1.3 4.7Biofuels Consumption | Million tonnes oil of equivalent (Mtoe)Global 9.2 19.7 59.6 68.3 82.1 99.4 113.9 132.1

Global biofuels production and consumption outlook


Chicago Board of Trade (CBOT) 29,000 gallonsNew York Mercantile Exchange (NYMEX) 42,000 gallonsBM&FBOVESPA (Brazil) 30 cubic meters

Ethanol futures at a glance

Contract: Ethanol Futures Contract SpecsTicker: EH and ETHPrice quotation: USD per gallonSettlement type: Physical


• Global oil prices• Global corn prices• Sugar cane prices (in Brazil)• Gasoline prices• Transportation costs • Weather conditions

ç

• Countries’ environmental legislation• Economic growth and growth of motor vehicles markets


Ethanol facts

1

• Unlike petroleum, ethanol is a renewable resource made from plant material, such as corn, sugar cane, or grasses.• Using ethanol can reduce oil dependence and greenhouse gas emissions.• Anhydrous ethanol is used for blending with gasoline (E-10, E-25, E-85) and hydrous ethanol is used as a standalone fuel.

Distribution of U.S. ethanol exports by destination in 2004 and 2014

U.S. alternative fuel vehicles (AFV) data

AFV models in the market | share in %U.S. AFV in 2013 | share in %

FOCUSECONOMICS Gasoil


January 2016

GasoilEuropean Low Sulfur Gasoil prices have continued to fall and registered a new multi-year low at the end of 2015. On 15 January, gasoil traded at USD 256 per metric ton, which was down a substantial 19.1% compared to the previous month and 20.4% lower on a year-to-date basis. Compared to the same day last year, gasoil was 44.1% cheaper.

European gasoil prices have remained muted as a result of swelling inventories and subdued demand. Moreover, as crack spreads remain high, refi neries across Europe have maintained their pace of production and the market has been fl ooded by imports from refi neries in the United States and Asia. Prices are also expected to remain low during this quarter as warmer-than–average winter temperatures have brought down demand.

FocusEconomics panelists expect gasoil to trade at an average of USD 565 per metric ton in Q4 2016. Panelists expect prices to recover only slightly over the course of next year and to trade at an average of USD 603 per metric ton in Q4 2017.

European Gasoil 0.2% Sulfur (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago317 322 458

-19.1% -20.4% -44.1%



47786.4%565

120.7%603

135.5%

Spot256

15-Jan-16

Q1 16

Q4 16

Q4 17

Gasoil prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 517 670 931 953 919 838 488 581 658 684 708 733Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 517 570 473 395 477 481 528 565 569 569 586 603Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 483 475 474 471 479 492 513 528 543 557 566 571Futures Prices (15-Jan) - 279 286 293 298 304 310 316 322 328 337 342

1 | European Gasoil 0.2% Sulfur

200

400

600

800

1000

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

2 | European Gasoil | evol. of fcst.

400

600

800

1000


Q4 2016 Q4 2017


200

300

400

500

600



Notes and sources

General: European Gasoil (0.2% maximum sulphur content) spot prices in USD per metric tone (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of European Gasoil 0.2% sulfur in USD/mt (aop).2 Quarterly prices of European Gasoil 0.2% sulfur, evolution of Q4 2016 and Q4 2017 forecast during the last 8 months.3 Consensus Forecast of quarterly average European Gasoil 0.2% sulfur prices and futures prices traded on the New York Mercantile Exchange (NYMEX) at each quarter.

Futures prices are as of spot date.

300

400

500

600

700


FOCUSECONOMICS Gasoil


January 2016

16

17

18

19

20

21

2007 2008 2009 2010 2011 2012 2013 2014


France8.9%

Germany28.9%

Italy3.4%Spain

11.8%UK

7.8%

Belgium2.5%

Russia9.3%

Turkey5.7%

Poland2.9%

Czech Republic

6.1%

Other12.6%

France10.3%

Germany12.7%

Italy11.3%Spain

7.3%

UK9.8%

Netherlands2.4%

Russia11.9%

Turkey3.7%

Poland6.2%

Czech Republic

1.5%

Other22.9%

Fact Sheet

Consumption | %-share in World Consumption | %-share in World

Middle distillates

45.2%

Light distillates

24.7%

Others19.3%

Fuel oil10.8%

European consumption by distilate group in 2004 and 2014

Middle distillates

53.4%

Light distillates

20.6%

Others19.5%

Fuel oil6.5%

2004Total 24.8 milion barrels per day

Belgium3.0% France

8.0%

Germany9.4%

Greece1.7%

Italy10.1%

Netherlands5.2%

Norway1.3%Russian

Federation21.5%

Spain5.5%

Sweden1.8%

Turkey2.8%

United Kingdom

7.5%

Other22.3%

European oil refinery capacity in 2004 and 2014

2014Total 23.7 million barrels per day

Belgium3.3% France

5.8%Germany

8.7%Greece2.1%

Italy8.4%

Netherlands5.4%

Norway1.3%

Russian Federation

26.7%

Spain6.5%

Sweden1.8%

Turkey2.6%

United Kingdom

5.8%

Other21.7%

2007 2008 2009 2010 2011 2012 2013 2014Production | Million barrels per dayTotal Europe 17.8 17.6 17.8 17.7 17.4 17.1 17.2 17.2Russia 10.0 10.0 10.1 10.4 10.5 10.6 10.8 10.8Kazakhstan 1.4 1.5 1.6 1.7 1.7 1.7 1.7 1.7Norway 2.6 2.5 2.3 2.1 2.0 1.9 1.8 1.9United Kingdom 1.7 1.6 1.5 1.4 1.1 0.9 0.9 0.9

Consumption | Million barrels per dayTotal Europe 20.1 20.0 19.2 19.1 19.0 18.6 18.5 18.3France 1.9 1.9 1.8 1.8 1.7 1.7 1.7 1.6Germany 2.4 2.5 2.4 2.4 2.4 2.4 2.4 2.4Russia 2.8 2.9 2.8 2.9 3.1 3.1 3.2 3.2United Kingdom 1.7 1.7 1.6 1.6 1.5 1.5 1.5 1.5

European fuels production and consumption


Intercontinental Exchange (ICE) 100 metric tonsNew York Mercantile Exchange (NYMEX) 100 metric tons

Gasoil futures at a glance

Contract: European Low Sulfur Gasoil FuturesTicker: G (ICE), GLI (NYMEX)Price quotation: USD per metric tonSettlement type: Physical


• Global oil prices

• Storage and inventories• Refining and distribution costs • Severe weather conditions

1

• Steady increase in demand for automobiles

• Supply and demand in European markets

European production and consumption | Million barrels per day

Gasoil facts

Motor vehicle production and motor vehicle in use by country

Motor vehicle in use | share in %Motor vehicle production | share in %

1

• Gasoil or diesel (middle distillate) is mainly used for automotive diesel fuel and home heating oil.• Use of gasoil (diesel) is preferred in Europe due to legislation for green gas emissions. Gasoline is preferred in the U.S. due to lower nitrogenous oxide emissions.

FOCUSECONOMICS Gasoline


January 2016

GasolineThe price of the reformulated blendstock for oxygenate blending (RBOB) gasoline declined sharply at the beginning of the year. On 15 January, gasoline traded at USD 1.09 per gallon, which was down 25.7% compared to the previous month and has plunged 43.8% since the beginning of the year. On an annual basis, gasoline prices were only 1.9% lower.

Falling gasoline prices at the outset of the year are the result of declining oil prices and the seasonal slowdown in gasoline demand. Moreover, completion of seasonal refi nery maintenance exacerbated the price drop.

The Consensus view among analysts is that gasoline prices will start to increase gradually in Q2 2016. For Q4 2016, panelists expect gasoline to trade at an average of USD 1.63 per gallon. Over the course of next year, prices will increase further and trade at an average USD 1.84 per gallon in Q4 2017.

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017BMI Research - - - - - - - - 1.60 1.56BNP Paribas 1.57 1.60 1.64 1.67 1.86 1.93 1.90 1.79 1.62 1.88Deutsche Bank 1.39 1.70 1.68 1.50 - - - - 1.57 1.66Goldman Sachs 1.23 1.69 - 1.45 - - - - - -OCBC World Markets 1.17 1.33 1.50 1.67 - - - - - -Société Générale 1.50 1.57 1.62 - - - - - 1.57 1.82Toronto-Dominion 1.05 1.40 1.50 1.65 1.80 2.00 2.00 1.90 1.40 1.93Unicredit 1.36 1.69 2.02 1.83 - - - - 1.73 -Summary 1.31 1.45 1.61 1.64 1.73 1.90 1.96 1.90Minimum 1.05 1.33 1.50 1.45 1.80 1.93 1.90 1.79 1.40 1.56Maximum 1.57 1.70 2.02 1.83 1.86 2.00 2.00 1.90 1.73 1.93Median 1.36 1.60 1.63 1.66 1.83 1.96 1.95 1.84 1.58 1.82Consensus 1.32 1.57 1.66 1.63 1.83 1.96 1.95 1.84 1.58 1.77Additional ForecastsEIA (Jan. 2016) 1.21 1.41 1.39 1.22 1.26 1.57 1.62 1.48 2.03 2.20

RBOB Gasoline (prices in USD/gal, aop) .

1m ago 31-Dec-15 1y ago1.46 1.94 1.11

-25.7% -43.8% -1.9%



1.3221.7%1.63

49.6%1.84

69.4%

Q4 16

Q4 17

Spot1.09

15-Jan-16

Q1 16

Notes and sources

Reformulated Blendstock for Oxgenate Blending (RBOB) Gasoline spot prices in USD per gallon (gal). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast. Futures prices traded on the New York Mercantile Exchange (NYMEX). Futures are as of spot date.

1.0

1.5

2.0

2.5

3.0


Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per gal (aop) 1.85 2.22 2.90 3.04 2.92 2.66 1.94 1.58 1.77 1.83 1.90 1.96Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per gal (aop) 1.74 2.26 2.14 1.60 1.32 1.57 1.66 1.63 1.83 1.96 1.95 1.84Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per gal (aop) 1.25 1.33 1.39 1.51 1.57 1.62 1.64 1.66 1.68 1.65 1.63 1.60Futures Prices (15-Jan) - 1.02 1.05 1.26 1.28 1.27 1.26 1.24 1.21 1.07 1.04 1.02

Gasoline prices and futures prices

FOCUSECONOMICS Gasoline


January 2016

Gasoline56%

Diesel22%

Jet Fuel11%

Biofuels5%

Natural Gas3%

Other3%

Light trucks30.0%

Cars & Motorcycles

27.0%

Heavy trucks23.0% Aircraft

7.0%Boats4.0%

Train & Bus3.0%Military

3.0%Pipeline

2.5%Lubricants

0.5%

Share of fuel usage in transportation

Fact Sheet

Refinery prod. | %-share in World Refinery cons. | %-share in World


United States39.7%

China9.3%Japan

4.1%Russia4.0%

India3.1%

Other39.7%

United States38.4%

China8.4%

Japan4.3%

Russia3.6%

Canada3.5%

Other41.7% 2004

Total 85.1 milllion barrels per day

North America24.1%


7.5%


Middle East8.5%

Africa3.6%

Asia27.2%

Global oil refinery capacity in 2004 and 2014

2014Total 96.5 million barrels per day

North America22.0%


6.3%


Middle East9.8%

Africa3.7%

Asia33.6%

2010 2011 2012 2013 2014 2015 2016Production | Million barrels per dayGlobal 88.8 90.1 90.8 91.8 95.1 95.3 96.8 United States 9.3 10.1 11.1 12.4 14.1 14.8 15.4 OECD 21.1 22.6 23.5 24.9 26.9 26.5 27.2 Non-OECD 66.0 67.5 67.3 66.9 68.2 68.7 69.5 OPEC 35.4 36.9 36.6 35.8 36.6 37.4 38.0 Consumption | Million barrels per dayGlobal 89.6 90.2 91.1 92.1 93.6 94.4 95.7 United States 18.1 18.7 18.1 19.0 19.5 19.6 19.7 OECD 46.4 47.0 45.8 46.2 47.2 47.0 47.2 Non-OECD 42.6 43.2 45.3 45.8 46.4 47.3 48.5 Gasoline Inventories | Million barrelsUnited States 219 223 231 228 240 230 232



New York Mercantile Exchange (NYMEX) 42,000 gallonsIntercontinental Exchange (ICE) 1,000 barrels

Gasoline futures at a glance

Contract: RBOB Gasoline FuturesTicker: RB (NYMEX), LG (ICE)Price quotation: USD per gallonSettlement type: Physical and Financial


• Global oil prices

• Severe weather conditions • Storage and inventories

1

• Crude oil alone makes up for 70% of gasoline price

• Supply and demand in the U.S market

• Seasonal fluctuation in prices due to increased driving and air travel

• Refining and distribution costs

85

90

95

100

2010 2011 2012 2013 2014 2015 2016

Production

Consumption

Global production and consumption | Million barrels per day

Gasoline facts

Fuel usage by motor vehicle | share in %Fuel usage in transp. | share in %

1 11 1

• RBOB Gasoline is the new benchmark form of gasoline in the U.S. market.• As gasoline is derived from crude oil, its price shows strong correlation with crude oil prices.• The Crude-Gasoline crack spread is the margin that refineries earn when they refine oil into various products. World crack spread margins vary from USD 4 to USD 14.

Transportation MotorVehicles

FOCUSECONOMICS Aluminium


January 2016

Aluminium LME (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago1,472 1,500 1,7820.3% -1.6% -17.2%



1,468-0.5%1,6038.6%1,68614.2%

Q4 16

Q4 17

Spot1,476

15-Jan-16

Q1 16

Aluminium Aluminium prices rose slightly through most of December before falling again in the fi rst half of January. On 15 January, aluminium traded at USD 1,476 per metric ton, which was 0.3% higher than on the same day in December but 1.6% lower on a year-to-date basis. In annual terms, prices plunged 17.2%.

Aluminium prices have been dropping in recent years mainly due to a persistent supply surplus coupled with subdued global demand. Some producers have responded to low prices by taking measures to reduce oversupply. Nevertheless, many producers are still reluctant to cut production and some are even expanding despite of very low prices in order to compete for market share. For instance, Rio Tinto plans to increase production by 10% in 2016 thanks to productivity gains.

Some aluminum producers’ initiatives to reduce oversupply are likely to lift prices slightly going forward. Analysts surveyed this month expect aluminum prices to rise to an average of USD 1,603 per metric ton in Q4 2016. For Q4 2017, analysts project the average aluminium price to tick up to USD 1,686 per metric ton.

Panelists’ views on aluminum are somewhat divergent. This month, 8 panelists left their Q4 2016 projections unchanged, while 2 panelists raised their forecasts and 5 cut them.

Although the majority of analysts see aluminium prices increasing gradually in the coming quarters, sentiment among forecasters is mixed. For Q4 2016, the maximum price forecast is USD 1,900 per metric ton, while the minimum is USD 1,304 per metric ton.

.

↑ 2 ↑ 2 ↑ -

= 9 = 8 = 4

↓ 7 ↓ 5 ↓ 5


Panelist Spread

Q4 17Q1 16 Q4 16

Aluminium prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 1,673 2,175 2,401 2,021 1,846 1,867 1,664 1,541 1,640 1,686 1,686 1,781Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 1,802 1,769 1,594 1,495 1,468 1,515 1,549 1,603 1,617 1,645 1,658 1,686Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 1,459 1,468 1,478 1,501 1,514 1,529 1,533 1,549 1,564 1,590 1,604 1,615Futures Prices (15-Jan) - 1,476 1,473 1,473 1,473 1,475 1,477 1,480 1,484 1,487 1,489 1,492

1,200

1,400

1,600

1,800

2,000Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

1,250

1,500

1,750

2,000


Base Metals



January 2016

Aluminium | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 1,490 1,525 1,575 1,575 1,600 1,650 1,650 1,700 1,550 1,650ANZ 1,375 1,400 1,500 1,550 1,600 1,650 1,700 1,850 - -BMI Research - - - - - - - - 1,575 1,600BMO Capital Markets 1,433 1,433 1,433 1,543 1,543 1,543 1,543 1,543 1,461 1,543Capital Economics 1,525 1,575 1,638 1,713 1,763 1,788 1,813 1,838 1,613 1,800CIBC World Markets - - - - - - - - 1,508 1,740Commerzbank 1,450 1,475 1,500 1,550 1,600 - - - - -CPM Group 1,540 1,570 1,555 1,575 1,610 1,605 1,650 - 1,560 -Danske Bank 1,600 1,700 1,800 1,900 - - - - 1,750 -Deutsche Bank 1,455 1,490 1,530 1,580 1,550 1,580 1,620 1,630 1,514 1,595DZ Bank 1,350 1,450 1,550 - - - - - 1,433 -E2 Economia 1,542 1,601 1,648 1,679 1,678 1,693 1,712 1,728 1,617 1,703EIU 1,500 1,600 1,650 1,750 1,800 1,900 1,850 1,900 1,625 1,863Emirates NBD 1,500 1,550 1,600 1,650 - - - - 1,575 -FastMarkets Ltd - - - - - - - - 1,500 -Itaú BBA 1,459 1,484 1,509 1,534 1,545 1,550 1,555 1,559 1,497 1,552JPMorgan 1,460 1,550 1,500 1,600 - - - - 1,528 1,510Macquarie Bank 1,380 1,450 1,375 1,375 1,350 1,400 1,350 1,350 1,395 1,363OCBC 1,347 1,396 1,444 1,493 - - - - - -Oxford Economics 1,600 1,650 1,700 1,800 1,825 1,850 1,875 1,900 1,688 1,863Pezco Microanalysis 1,425 1,385 1,344 1,304 1,309 1,336 1,364 1,392 1,364 1,350Société Générale 1,500 1,550 1,550 - - - - - 1,550 1,600Standard Chartered 1,400 1,450 1,550 1,700 1,850 1,850 1,850 1,850 1,525 1,850Toronto-Dominion 1,475 1,521 1,587 1,587 1,631 1,631 1,676 1,676 1,543 1,653Unicredit 1,500 1,520 1,530 - - - - - 1,523 -Summary 1485 1492 1532 1576 1610 1631 1651 1672Minimum 1,347 1,385 1,344 1,304 1,309 1,336 1,350 1,350 1,364 1,350Maximum 1,600 1,700 1,800 1,900 1,850 1,900 1,875 1,900 1,750 1,863Median 1,468 1,521 1,550 1,580 1,600 1,641 1,663 1,700 1,536 1,625Consensus 1,468 1,515 1,549 1,603 1,617 1,645 1,658 1,686 1,541 1,640Additional ForecastsIMF (Oct. 2015) 1,722 1,730 1,744 1,755 - - - 1,738 1,784

Aluminium LME

4 | Aluminium Q4 2017 | evol. of fcst.

1,000

1,500

2,000

2,500




1,400

1,500

1,600

1,700



3 | Aluminium Q4 2016 | evol. of fcst.

1,200

1,500

1,800

2,100

2,400



Notes and sources

General: London Metal Exchange (LME) Aluminium spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of LME Aluminium in USD/mt (aop).2 Consensus Forecast of quarterly LME Aluminium average prices and futures prices traded on the London Metal Exchange

(LME) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of LME Aluminium, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of LME Aluminium, evolution of Q4 2017 forecast during the last 8 months.

1 | Aluminium | LME

1,400

1,600

1,800

2,000

2,200

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17



January 2016

40

50

60

70

80

2013 2014 2015 2016 2017 2018 2019 2020


2008Total 37,530

thousand tons

Building & Construction

26.2%

Transport25.6%Electrical

12.8%

Packaging15.4%

Consumer goods7.1%

Machinery & Equipment

8.1%

Other4.8%

2018Total 64,560

thousand tons

Building & Construction

20.8%

Transport26.5%

Electrical12.8%

Packaging11.2%

Consumer goods14.5%


9.2%

Other5.0%

Share of aluminium usage by industry

Fact Sheet



China48.7%

Russia7.0%

Canada5.7%

UAE4.7%

Australia3.5%

Other30.4%

China47.9%

United States10.4%

Germany4.5%

Japan4.0%

India3.0%

Other30.1%

2004Total 33,618

thousand tons

United States11.0%

Australia5.7%

Canada8.3%

China24.6%

Russia10.8%

Other39.6%

Distribution of smelting capacity in 2004 and 2014

2014Total 63,700

thousand tons

United States3.7%

China51.0%

Russia6.6%

India4.5%

Canada4.7%

Other29.5%

2013 2014 2015 2016 2017 2018 2019 2020Production | Million metric tons of primary aluminiumGlobal 50.5 52.9 55.6 59.5 63.1 66.6 69.7 73.2EU & N.America 8.5 8.1 8.3 8.8 9.3 9.4 9.4 9.4Middle East 4.3 5.2 5.5 5.6 5.6 5.7 5.7 5.7Russia 3.7 3.5 3.6 3.8 3.9 4.3 4.7 4.9China 24.8 27.1 28.8 31.0 33.6 35.7 38.1 40.4Other 9.2 9.0 9.4 10.3 10.7 11.5 11.8 12.8Consumption | Million metric tons of primary aluminiumGlobal 49.9 53.0 56.2 59.5 62.8 66.1 69.4 72.8EU15 8.4 8.6 8.8 9.0 9.2 9.4 9.6 9.8North America 5.9 6.1 6.4 6.8 7.0 7.3 7.5 7.6China 23.9 26.2 28.5 30.7 33.0 35.3 37.6 40.1Oth. Developing 11.6 12.0 12.5 13.1 13.8 14.4 15.1 15.9



London Metal Exchange (LME) 5 metric tonsShanghai Futures Exchange (SHFE) 5 metric tonsMulticommodity Exchange India (MCX) 5,000 kilograms

Aluminium futures at a glance

Contract: LME Aluminium FuturesTicker: AHPrice quotation: USD per metric tonSettlement type: Physical


• Bauxite imports• Smelting capacity• Regional deficits on production• Warehousing rules on the LME

• Demand and business cycles

• Currency strength in producing and exporting countries

• Recycled aluminium as a cheap substitute to primary aluminium• Energy costs (mainly coal and hydroelectric) related to the extraction of primary aluminium from bauxite

• Supply growth from China, producer of half the world's production


Aluminium facts

1

• It is the most extensively-used non-ferrous metal in the world and its future is the most liquid contract traded on the LME.• Smelting companies wage on futures to offset the risk from increasing energy costs and its effect on aluminium prices.• LME is prone to fluctuations in inventory cancelations and premiums due to change in regulation of load-in, load-out rules.

FOCUSECONOMICS Alumina & Aluminium Alloy


January 2016

AluminaAustralian Alumina (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago290 286 448

-4.5% -3.0% -38.2%



215-22.4%

233-16.1%

248-10.7%

Q4 16

Q4 17

Spot277

15-Jan-16

Q1 16

Alumina prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 342 426 471 429 427 425 394 225 241 326 385 444Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 438 427 389 324 215 227 227 233 236 238 242 248Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 211 215 218 225 227 228 226 227 228 231 232 234

200

300

400

500


Aluminium AlloyAluminium Alloy LME (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago1,573 1,599 1,815-0.4% -2.0% -13.7%



1,6686.5%1,77013.0%1,88320.2%

1,566Spot

Q4 16

Q4 17

15-Jan-16

Q1 16

Aluminium Alloy prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 1,470 2,090 2,269 1,936 1,798 1,950 1,721 1,718 1,852 1,995 2,112 2,230Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 1,797 1,769 1,700 1,619 1,668 1,701 1,735 1,770 1,805 1,841 1,878 1,883Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 1,662 1,667 1,674 1,689 1,701 1,713 1,723 1,735 1,747 1,763 1,771 1,776Futures Prices (15-Jan) - 1,566 1,572 1,579 1,586 1,591 1,596 1,601 1,606 1,611 1,616 1,621

1,400

1,600

1,800

2,000


Against a backdrop of further decreases in aluminium and alumina prices, Australian Alumina FOB prices continue hitting fresh multi-year lows. Alumina traded at USD 277 per metric ton on 15 January, which was an over-four-year low. Prices fell 4.5% compared to the same day in December and were down 3.0% on a year-to-date basis, while they declined 38.2% over the same day last year.

Despite the grim outlook, potential refi nery cuts and anticipated smelter restocking demand have halted the price plunge, while tightening supply and a more stable aluminium market may reverse the existing downward trend. Analysts project that prices will revert their downward trend and average USD 233 per metric ton in Q4 2016. Panelists expect prices to average USD 248 per metric ton in Q4 2017.

After steadily losing ground for most of 2015, aluminium alloy prices have stabilized on the tail winds of strong Q1 demand, which has primarily been driven by high levels of production in the car industry. Aluminium alloy traded at USD 1,566 per metric ton on 15 January. Prices fell 0.4% compared to the same day in December and were down 2.0% on a year-to-date basis. Compared to the same day last year, it traded 13.7% lower.

As newfound demand chases away low prices in the European market, prices are expected to regain some of the ground lost. Analysts project that prices will gradually pick up steam in 2016 and average USD 1,770 per metric ton in Q4. Panelists expect prices to continue rising in 2017 and average USD 1,883 per metric ton in Q4.

Alumina & Alum. Alloy

FOCUSECONOMICS Alumina & Aluminium Alloy


January 2016

75

100

125

150

2011 2012 2013 2014 2015 2016 2017 2018

Smelting Grade Alumina Available

Smelting Grade Alumina Requirement

Distribution of bauxite reserves in 1994, 2004 and 2014

SGA Alumina Available and Required | Million metric tons

Fact Sheet

Production | %-share in World

China46.1%

Australia18.6%

Brazil9.1%

Europe7.6%

North America

5.9%

Other12.6%

Major alumina producers in 2014

2004Total 25,000 million

tons

Australia22.8%

Brazil7.6%

Guinea29.6%

Jamaica8.0%

China2.8%

India3.1%

Other26.1%


tons

Australia23.2%

Brazil9.3%

Guinea26.4%

Jamaica7.1%

Vietnam7.5%

Indonesia3.6%

Other22.9%

2011 2012 2013 2014 2015 2016 2017 2018Production | Million metric tons of aluminaGlobal 98.2 102.6 107.3 111.5 117.8 124.1 128.6 130.3China 39.2 43.0 47.2 51.4 56.0 61.0 62.6 60.3Australia 19.6 21.6 21.8 20.8 20.7 21.1 21.3 21.4Brazil 10.3 10.4 9.9 10.2 10.3 10.5 10.7 10.8Europe 8.7 8.3 8.5 8.5 8.6 9.0 9.0 9.1North America 5.7 6.1 6.8 6.6 6.7 7.0 7.0 7.1India 3.9 3.8 3.7 4.9 6.0 6.7 7.0 7.5Capacity Util. (%) 83.4 81.6 82.0 80.5 83.0 84.9 85.9 84.7SGA Alumina | Million metric tons of smelting grade aluminaSGA Available 91.7 96.2 100.4 104.5 110.5 116.6 120.9 122.3SGA Requirement 91.0 95.0 99.6 105.1 111.5 117.7 121.6 125.8

Global production and requirement outlook

Aluminium Alloy futures at a glance

Contract: LME Aluminium Alloy FuturesTicker: AAPrice quotation: USD per metric tonSettlement type: Physical

Aluminium Alloy facts

1 1

• The LME contract for aluminium alloy makes reference to grades used in the production of automotive engine parts.• The main components of LME's underlying metal—A380.1 or 226—are aluminium, copper, silicon, magnesium and zinc.• The production of secondary aluminium alloy continues to increase as new techniques allow for more efficient recycling.

Factors influencing Aluminium Alloy prices

• Bauxite imports and prices• Transportation costs

• Smelting capacity

1

• Price fluctuations on major components of aluminium alloy

• Economic outlook for aerospace and automotive industries

• Demand as a substitute for copper in the construction of large power transmission lines

• Geopolitical pressures in countries that produce bauxite ore


tons

Australia24.3%

Brazil12.2%

Jamaica8.7%India

4.3%

Guinea24.3%

Guyana3.0%

Other23.0%

Factors influencing Alumina prices

• Bauxite imports and prices• Alumina smelting capacity• Transportation costs

• Barriers to enter into integrated bauxite/alumina projects

• Geopolitical pressures in countries producing Bauxite ore

• Scarcity of economical bauxite resources within China

• Lower demand for primary aluminium as recycled aluminium is used as a substitute• Energy costs related to the

electrolysis process to convert aluminium oxide into primary aluminium

Alumina facts

11

• Alumina price is generally linked to the LME primary aluminium price and normally measured as price FOB.• Alumina is a crucial input on aluminium production; it takes two metric tons of the former to produce a metric ton of the latter.• Aluminium oxide is mainly extracted from bauxite ore with a ratio of 2-3 metric ton of bauxite ore per metric ton of alumina.

Alumina futures at a glance

1

Alumina, despite its importance as the primary component for the production of aluminium, lacks a global market of futures and its price is instead measured as Chinese imports of Australian aluminium oxide in USD.

FOCUSECONOMICS Copper


January 2016

Copper LME (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago4,553 4,706 5,681-5.0% -8.0% -23.8%



4,6437.3%5,12318.4%5,53627.9%

Q4 16

Q4 17

Spot4,328

15-Jan-16

Q1 16

Copper Copper prices continued on their overall downward trajectory in recent weeks. While spot prices for copper fl uctuated slightly in the second half of December, prices fell during of the fi rst weeks of January. On 15 January, the price for copper closed at USD 4,328 per metric ton, which was down 5.0% over the same day in December and 8.0% lower on a year-to-date basis. Compared to the same day in 2015, copper prices fell 23.8%.

Due to its usefulness as an electrical conductor, copper has a vast number of uses, particularly in building construction and power generation. China’s rapid urbanization process required a great deal of copper and, as this process slows, the demand for copper is slowing as well. Suppliers are gradually adjusting to the lower levels of demand. Furthermore, demand is also being restrained by a strong U.S. dollar since most commodities, including copper, are priced in U.S. dollars.

Going forward, a recovery in copper prices is expected to be underpinned by a combination of strengthening global demand and reduced supply. Demand from China is foreseen picking up, due to increased infrastructure development, despite the country’s slower economic growth. On the supply-side, in response to low copper prices, several major producers cut back production last year and further reductions are expected going forward. FocusEconomics panelists project that prices will recover throughout this year and average USD 5,123 per metric ton in Q4 2016. Panelists expect prices continue rising next year and average USD 5,536 per metric ton in Q4 2017.

A pessimistic view on copper prices is shared by several panelists surveyed by FocusEconomics. 9 panelists revised down their projections for Q4 2016, while 7 kept them stable and 1 analyst revised up.

Along with other base metal prices, copper prices are trading at historic lows. Analysts expect that prices will increase progressively in the coming years, although opinions are mixed. For Q4 2016, the maximum price forecast is USD 6,000 per metric ton, while the minimum is USD 4,062 per metric ton.

Copper prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 5,179 7,556 8,820 7,954 7,330 6,863 5,509 4,975 5,331 5,467 5,739 6,011Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 5,845 6,051 5,272 4,884 4,643 4,827 4,956 5,123 5,266 5,355 5,443 5,536Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 4,602 4,641 4,684 4,773 4,826 4,882 4,902 4,957 5,008 5,087 5,126 5,156Futures Prices (15-Jan) - 4,328 4,330 4,331 4,330 4,330 4,329 4,329 4,328 4,327 4,327 4,326

4,000

5,000

6,000

7,000


.

↑ - ↑ 1 ↑ 1

= 8 = 7 = 4

↓ 11 ↓ 9 ↓ 5


Q1 16 Q4 16 Q4 17

Panelist Spread

3,000

4,000

5,000

6,000

7,000Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

FOCUSECONOMICS Copper January 2016


Copper | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 4,620 4,800 5,200 5,500 5,700 6,000 6,200 6,200 5,050 6,050ANZ 4,200 5,000 5,200 5,500 5,500 5,600 5,800 6,000 - -Barclays Capital 4,400 4,520 4,300 4,180 - - - - 4,350 5,075BBVA 4,211 4,277 4,542 4,784 4,960 5,049 5,115 5,181 4,453 5,071BMI Research - - - - - - - - 5,400 5,600BMO Capital Markets 4,409 4,079 4,630 4,519 4,519 4,519 4,519 4,519 4,409 4,519BofA Merrill Lynch 4,250 4,000 4,500 5,000 - - - - - -Capital Economics 4,753 4,900 5,125 5,375 5,625 5,875 6,125 6,375 5,038 6,000CIBC World Markets - - - - - - - - 5,200 5,800Commerzbank 4,700 4,900 5,100 5,400 5,600 - - - - -CPM Group 4,900 5,100 5,075 5,250 5,400 5,680 5,500 - 5,081 -Danske Bank 5,300 5,500 5,700 5,900 - - - - 5,600 -Deutsche Bank 4,600 4,800 4,500 4,400 4,500 4,600 4,800 5,000 4,575 4,725DZ Bank 4,400 4,900 4,900 - - - - - 4,675 -E2 Economia 4,691 4,784 4,876 4,969 4,987 5,006 5,045 5,084 4,830 5,030Emirates NBD 5,150 5,250 5,500 5,750 - - - - 5,412 -EIU 4,500 4,800 5,200 5,800 5,800 5,800 6,000 6,500 5,075 6,025FastMarkets Ltd - - - - - - - - 5,000 -Itaú BBA 4,478 4,588 4,754 4,920 4,985 5,000 5,015 5,030 4,685 5,007JPMorgan 4,500 4,600 4,100 4,500 - - - - 4,400 4,300Macquarie Bank 4,700 5,200 5,100 5,200 5,100 5,400 5,300 5,250 5,050 5,263Novobanco - - - - - - - - 5,625 -OCBC 4,514 4,676 4,838 5,000 - - - - - -Oxford Economics 5,250 5,550 5,750 5,950 6,150 6,250 6,350 6,375 5,625 6,281Pezco Microanalysis 4,622 4,435 4,249 4,062 4,077 4,193 4,309 4,425 4,342 4,251Société Générale 5,000 5,500 5,500 - - - - - 5,425 5,500Scotiabank Peru - - - - - - - - 5,071 -Standard Chartered 4,800 5,000 5,500 6,000 6,500 6,500 6,500 6,500 5,325 6,500Toronto-Dominion 4,380 4,600 4,750 4,750 4,850 4,850 5,071 5,071 4,620 4,960Unicredit 4,740 4,920 5,000 - - - - - 5,040 -Summary 4772 4735 4891 5039 5195 5310 5399 5490Minimum 4,200 4,000 4,100 4,062 4,077 4,193 4,309 4,425 4,342 4,251Maximum 5,300 5,550 5,750 6,000 6,500 6,500 6,500 6,500 5,625 6,500Median 4,620 4,800 5,000 5,100 5,250 5,400 5,300 5,215 5,045 5,169Consensus 4,643 4,827 4,956 5,123 5,266 5,355 5,443 5,536 4,975 5,331Additional ForecastsIMF (Oct. 2015) 5,650 5,662 5,674 5,685 - - - 5,668 5,711

Copper LME

4 | Copper Q4 2017 | evol. of fcst.

2,000

4,000

6,000

8,000

10,000




4,000

4,500

5,000

5,500



1 | Copper | LME

3 | Copper Q4 2016 | evol. of fcst.

3,000

4,200

5,400

6,600

7,800

9,000



Notes and sources

General: London Metal Exchange (LME) Copper spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of LME Copper in USD/mt (aop).2 Consensus Forecast of quarterly LME Copper average prices and futures prices traded on the London Metal Exchange

(LME) at the end of each quarter. Future prices are as of spot date. 3 Quarterly price of LME Copper, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of LME Copper, evolution of Q4 2017 forecast during the last 8 months.

4,000

5,000

6,000

7,000

8,000

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Copper January 2016


2004Total 470,000 thousand tons

Chile29.8%

United States7.4%

Indonesia7.4%Australia

5.1%Russia4.3%

Peru6.4%

Other39.6% 2014

Total 700,000 thousand tons

Chile29.9%

United States5.0%China

4.3%Australia13.3%

DRC2.9%

Peru9.7%

Other35.0%


Fact Sheet



China34.8%

Chile11.9%Japan

6.8%United States4.8%

Russia3.8%

Other38.0%

China49.8%

United States8.1%

Germany5.2%

Japan4.8%

Korea3.3%

Other28.8%

2004Total 14,600

thousand tons

Chile37.1%

United States7.9%Indonesia

5.8%Australia

5.8%

Russia4.6%

Peru7.1%

Other31.7%

Distribution of mining production in 2004 and 2014

2014Total 18,300

thousand tons

Chile31.7%

United States7.5%

China8.9%Australia

5.5%

DRC6.0%

Peru7.7%

Other32.8%

2016 2017 2018 2019 2020Mine Production | Thousand metric metric tons of non-refined copperGlobal 20,800 20,890 21,370 21,540 21,290Chile production 5,910 5,940 6,100 6,070 6,000Copper Production | Thousand metric metric tons of refined copperGlobal 23,950 24,200 24,910 25,110 24,950Smelting capacity 22,510 22,160 22,310 22,310 22,300Anode production 19,240 19,320 19,940 20,440 20,560Consumption | Thousand metric metric tons of refined copperGlobal 23,330 24,140 24,900 25,630 26,160China 10,880 11,410 11,970 12,500 12,820Western Europe 2,980 2,990 2,980 2,960 2,950United States 2,470 2,520 2,210 2,510 2,500BRI countries 1,640 1,710 1,780 1,850 1,930Other 5,360 5,510 5,960 5,810 5,960



London Metal Exchange (LME) 25 metric tonsNew York Mercantile Exchange (COMEX) 25,000 poundsShanghai Futures Exchange (SHFE) 5 metric tons

Copper futures at a glance

Contract: LME Copper FuturesTicker: CAPrice quotation: USD per metric tonSettlement type: Physical


• Supply of mined copper• Transportation costs• Productive capacity of mines

• Emerging markets demand1

• Stock build-up by the Chinese State Reserves Bureau (SRB)• Disruption factors in producing countries

• Impact of strength of U.S. dollar on costs denominated in local currency

• Substitution effect given that other base metals have similar uses

23,000

24,000

25,000

26,000

27,000

2016 2017 2018 2019 2020

Production

Consumption


Copper facts

1

• Copper concentrates well-above one third of its mining output in Latin America, making supply prone to local political turmoil.

• Copper exchange stocks follow cyclical changes that mostly affect SHFE due to the existence of stockpiling during winter.

• Copper remains the least-preferred long position among base metals due to the well-supplied market, oil prices and risks to China’s economic outlook.

FOCUSECONOMICS Lead


January 2016

Lead LME (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago1,703 1,797 1,766-6.0% -10.9% -9.3%



1,6805.0%1,78811.7%1,92520.3%

Q4 16

Q4 17

Spot1,601

15-Jan-16

Q1 16

Lead After rallying at the end of December, lead prices dropped in the beginning of January. On 15 January, the spot price closed at USD 1,601 per metric ton, marking a 6.0% monthly decrease. Prices recorded a 10.9% year-to-date decline, while a year-on-year comparison showed that lead prices had fallen 9.3%.

Prices have dropped drastically over the past year as global demand has declined. A slower-than-expected global recovery in 2015 has kept demand low and suppliers need time to scale back output. The recent suspension of mining operations by major producers will signal to markets that suppliers are beginning to adjust, and prices should increase in the next year as a result. However, China’s manufacturing slowdown and currency devaluation in early January caused lead prices to tumble.

This most recent devaluation of the Chinese yen brought lead futures down. Furthermore, sluggish demand from battery makers is putting downward pressure on lead futures. FocusEconomics panelists expect prices to recover in 2016. Panelists see prices averaging USD 1,788 per metric ton in Q4 2016 and expect prices to climb to an average of USD 1,925 per metric ton in Q4 2017.

Lead prices are expected to remain low in Q1 2016 although a gradual recovery in prices is foreseen in the upcoming quarters. This month, 2 panelists cut their projections for Q4 2016, while 6 left them unchanged.

Lead mine output continues to be cut, which is expected to push prices up in the coming quarters. Although the Consensus view is of a gradual increase, some panelists share the opinion that lead prices will remain low. For Q4 2016, panelists’ minimum price projected is USD 1,297 per metric ton, while the maximum is USD 2,090 per metric ton.

.

↑ 2 ↑ 1 ↑ -

= 6 = 6 = 5

↓ 2 ↓ 2 ↓ 1


Q1 16 Q4 16 Q4 17

Panelist Spread

Lead prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 1,724 2,149 2,398 2,062 2,139 2,095 1,787 1,746 1,894 1,910 1,962 2,014Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 1,811 1,939 1,718 1,684 1,680 1,697 1,731 1,788 1,842 1,866 1,894 1,925Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 1,681 1,679 1,681 1,687 1,696 1,707 1,715 1,730 1,746 1,773 1,789 1,803Futures Prices (15-Jan) - 1,601 1,597 1,596 1,597 1,599 1,600 1,602 1,603 1,604 1,606 1,607

1,500

1,750

2,000

2,250


1,000

1,500

2,000

2,500Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

FOCUSECONOMICS Lead January 2016


Lead | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017BMI Research - - - - - - - - 1,900 1,975BMO Capital Markets 1,653 1,543 1,653 1,764 1,764 1,764 1,764 1,764 1,653 1,764Capital Economics 1,774 1,775 1,825 1,875 1,913 1,950 1,988 2,025 1,812 1,969Commerzbank 1,625 1,675 1,725 1,775 1,850 - - - - -CPM Group 1,750 1,725 1,755 1,790 1,820 1,790 1,830 - 1,755 -Deutsche Bank 1,680 1,700 1,720 1,750 1,760 1,800 1,820 1,850 1,713 1,808EIU 1,680 1,700 1,750 1,880 1,950 1,950 2,100 2,240 1,753 2,060FastMarkets Ltd - - - - - - - - 1,800 -Itaú BBA 1,609 1,633 1,658 1,683 1,695 1,700 1,705 1,710 1,646 1,702Macquarie Bank 1,720 1,810 1,750 1,680 1,640 1,700 1,650 1,620 1,740 1,653Oxford Economics 1,790 1,890 2,040 2,090 2,150 2,180 2,200 2,220 1,953 2,188Pezco Microanalysis 1,536 1,456 1,376 1,297 1,297 1,338 1,379 1,420 1,416 1,359Société Générale 1,800 1,750 1,750 - - - - - 1,800 1,900Standard Chartered 1,600 1,680 1,730 1,850 2,150 2,150 2,150 2,150 1,715 2,150Toronto-Dominion 1,625 1,720 1,764 2,028 2,116 2,205 2,249 2,249 1,784 2,205Summary 1675 1688 1714 1760 1815 1854 1880 1909Minimum 1,536 1,456 1,376 1,297 1,297 1,338 1,379 1,420 1,416 1,359Maximum 1,800 1,890 2,040 2,090 2,150 2,205 2,249 2,249 1,953 2,205Median 1,680 1,700 1,750 1,783 1,835 1,800 1,830 1,938 1,754 1,935Consensus 1,680 1,697 1,731 1,788 1,842 1,866 1,894 1,925 1,746 1,894Additional ForecastsIMF (Oct. 2015) 1,825 1,830 1,836 1,842 - - - - 1,833 1,856

Lead LME

4 | Lead Q4 2017 | evol. of fcst.

1,200

1,800

2,400

3,000




1,400

1,600

1,800

2,000



1 | Lead | LME

3 | Lead Q4 2016 | evol. of fcst.

1,200

1,500

1,800

2,100

2,400

2,700



Notes and sources

General: London Metal Exchange (LME) Lead spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of LME Lead in USD/mt (aop).2 Consensus Forecast of quarterly LME Lead average prices and futures prices traded on the London Metal Exchange

(LME) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of LME Lead, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of LME Lead, evolution of Q4 2017 forecast during the last 8 months.

1,500

1,750

2,000

2,250

2,500

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Lead January 2016


2004Total 67,000

thousand tons

United States12.1%

Australia22.4%

China16.4%Kazakhstan

7.5%

Peru5.2%

Canada3.0%

Other33.4%

2014Total 87,000

thousand tons

United States5.7%

Australia40.2%

China16.1%

Mexico6.4%

Peru8.0%

Russia10.6%

Other12.9%


Fact Sheet



China41.2%

United States11.0%

Korea6.2%

India4.6%

Germany3.7%

Other33.3%

China41.0%

United States16.1%

Korea5.5%

India5.0%

Germany3.3%

Other29.1%

2004Total 3,150

thousand tons

United States14.1%

Australia21.5%

China30.2%

Mexico4.4%

Peru9.7%

Canada2.4%

Other17.6%


2014Total 5,460

thousand tons

United States6.5%

Australia13.2%

China54.0%

Mexico4.0%

Peru4.9%

Russia3.6%

Other13.7%

2012 2013 2014 2015 2016 2017 2018Mine Production | Thousand metric tons of non-refined leadGlobal 4,724 5,225 5,403 5,426 5,676 5,869 6,301China 2,474 2,813 2,957 2,978 3,136 3,292 3,445NA (incl. Mexico) 578 564 575 649 668 640 689S&C America 353 374 384 419 420 428 431Australia 568 655 672 610 687 684 685Lead Production | Thousand metric tons of refined leadGlobal 10,861 11,354 11,580 11,951 12,393 12,702 13,249China 4,681 5,103 5,288 5,941 6,267 6,392 6,392Primary prod. 5,730 5,885 5,876 5,905 6,083 6,265 6,453Consumption | Thousand metric tons of refined leadGlobal 10,769 11,205 11,621 12,027 12,442 12,873 13,316China 4,755 5,070 5,299 5,511 5,759 6,018 6,289




Lead futures at a glance

Contract: LME Lead futuresTicker: PBPrice quotation: USD per metric tonSettlement type: Physical


• Global economic growth• Strength of the U.S. dollar• Emerging markets demand

1

• Environmental and profitability issues on lead mine supplies• Market supply expectations based on existing stocks

• Supply of secondary lead due to its high recycling rate• Demand on lead-consuming sectors, mainly cars & e-bikes• Substitution effect as lead acid batteries are gradually supplanted by lithium ion

10,000

11,000

12,000

13,000

14,000

2012 2013 2014 2015 2016 2017 2018



Lead facts

1

• Lead is the fourth most used metal worldwide with the largest applications in batteries and communications.• It can be recycled indefinitely without losing its properties; recycled lead accounts for more than 60% of total production.• Lead is increasingly being used in radiation shields for X-ray equipment and nuclear reactors due to its absorption capacity.

FOCUSECONOMICS Nickel


January 2016

Nickel LME (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago8,506 8,780 14,414-1.7% -4.8% -42.0%



9,38412.3%10,87630.1%12,48749.4%

Q4 16

Q4 17

Spot8,360

15-Jan-16

Q1 16

NickelNickel prices fi nished 2015 at levels last seen in 2003 and it doesn’t appear that the downward trend is going to stop. On 15 January, nickel traded at USD 8,360 per metric ton, which marked a 1.7% decrease compared to the same day in December and a 4.8% fall over the beginning of this year. In year-on-year terms, prices were 42.0% lower.

Nickel prices have suffered from a combination of oversupply and weak demand from emerging economies since 2011, as have many other non-ferrous metals. However, most analysts expect prices to stabilize and then recover through 2016 as supply should decrease due to several major producers cutting their output, while demand from China should remain steady.

The aforementioned developments raise expectations of price increases in the medium run. Indeed, prices are expected to recover and average USD 10,876 per metric ton in Q4 2016. Analysts see prices continuing to rise gradually through 2017 and expect them to average USD 12,487 per metric ton in Q4 2017.

Price prospects are still positive as the uncertainty regarding the Fed’s rate hike has been relieved, although analysts are becoming less upbeat. For Q4 2016, 7 analysts left their projections for the price of nickel unaltered, while 7 cut them.

Although the Consensus view is that prices will increase gradually in the coming quarters, opinions are still varied. For Q4 2016, the maximum price forecast is USD 14,900 per metric ton, while the minimum price is USD 8,090 per metric ton.

.

↑ - ↑ 1 ↑ -

= 8 = 7 = 4

↓ 10 ↓ 7 ↓ 5


Q1 16 Q4 16 Q4 17

Panelist Spread

Nickel prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 14,699 21,852 22,874 17,522 15,023 16,898 11,835 10,152 11,676 12,529 13,726 14,923Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 14,391 13,043 10,589 9,412 9,384 9,799 10,336 10,876 11,342 11,635 12,095 12,487Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 9,330 9,369 9,455 9,629 9,790 9,978 10,142 10,340 10,526 10,761 10,891 10,975Futures Prices (15-Jan) - 8,359 8,373 8,387 8,395 8,408 8,420 8,432 8,444 8,456 8,466 8,477

5,000

10,000

15,000

20,000


6,000

9,000

12,000

15,000

18,000Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

FOCUSECONOMICS Nickel January 2016


Nickel | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 8,940 9,200 9,900 10,500 10,800 11,000 11,500 11,000 9,650 11,100ANZ 9,000 9,500 10,500 11,000 11,500 12,000 13,500 15,000 - -BMI Research - - - - - - - - 10,500 11,500BMO Capital Markets 8,488 7,937 9,370 9,921 9,921 9,921 9,921 9,921 8,929 9,921Capital Economics 8,890 9,250 10,000 10,750 11,500 12,500 13,500 14,000 9,723 12,875CIBC World Markets - - - - - - - - 9,360 11,020Commerzbank 8,750 9,500 10,250 11,000 11,500 - - - - -CPM Group 9,500 9,850 10,300 10,450 10,600 10,900 10,600 - 10,025 -Danske Bank 10,000 11,000 12,000 13,000 - - - - 11,500 -Deutsche Bank 9,000 9,500 10,000 10,500 11,000 11,500 12,000 12,500 9,750 11,750DZ Bank 9,000 9,250 9,750 - - - - - 9,313 -E2 Economia 9,112 9,624 10,053 10,420 10,538 10,541 10,542 10,543 9,802 10,541EIU 10,482 11,584 12,162 13,264 14,146 14,808 15,028 15,285 11,873 14,817FastMarkets Ltd - - - - - - - - 10,500 -Itaú BBA 8,557 8,645 8,778 8,911 8,973 9,000 9,027 9,053 8,723 9,013JPMorgan 9,000 9,500 8,000 8,500 - - - - 8,750 7,000Macquarie Bank 9,000 10,000 10,000 11,000 12,000 12,000 12,000 12,000 10,000 12,000OCBC 9,604 9,949 10,294 10,638 - - - - - -Oxford Economics 12,350 12,600 14,100 14,900 14,500 14,750 15,250 15,750 13,488 15,063Pezco Microanalysis 8,947 8,661 8,376 8,090 8,178 8,453 8,728 9,003 8,518 8,591Société Générale 12,000 12,000 13,000 - - - - - 13,000 15,000Standard Chartered 8,500 9,500 10,500 13,100 14,500 14,500 14,500 14,500 10,400 14,500Toronto-Dominion 8,650 8,825 9,225 9,820 10,472 11,023 13,228 13,779 9,130 12,125Unicredit 9,300 9,900 10,500 - - - - - 10,250 -Summary 9545 9592 10067 10606 11109 11489 11865 12291Minimum 8,488 7,937 8,000 8,090 8,178 8,453 8,728 9,003 8,518 7,000Maximum 12,350 12,600 14,100 14,900 14,500 14,808 15,250 15,750 13,488 15,063Median 9,000 9,500 10,053 10,569 11,000 11,262 12,000 12,500 9,802 11,625Consensus 9,384 9,799 10,336 10,876 11,342 11,635 12,095 12,487 10,152 11,676Additional ForecastsIMF (Oct. 2015) 11,565 11,609 11,649 11,685 - - - - 11,627 11,754

Nickel LME

4 | Nickel Q4 2017 | evol. of fcst.

5,000

10,000

15,000

20,000

25,000




8,000

10,000

12,000

14,000



1 | Nickel | LME

3 | Nickel Q4 2016 | evol. of fcst.

5,000

10,000

15,000

20,000

25,000



Notes and sources

General: London Metal Exchange (LME) Nickel spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of LME Nickel in USD/mt (aop).2 Consensus Forecast of quarterly LME Nickel average prices and futures prices traded on the London Metal Exchange

(LME) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of LME Nickel, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of LME Nickel, evolution of Q4 2017 forecast during the last 8 months.

5,000

10,000

15,000

20,000

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Nickel January 2016


2004Total 62,000

thousand tons

Russia10.6%

Canada7.9%

New Caledonia

7.1%

Indonesia5.2%

Australia35.5%

Brazil7.3%

Other26.5%

2014Total 71,000

thousand tons

Australia23.5%

Brazil11.2%

Indonesia5.6%

New Caledonia

14.8%

Cuba6.8%

Russia9.8%

Other28.4%


Fact Sheet



China33.5%

Russia12.8%Japan

9.3%Australia

7.2%

Canada6.0%

Other31.2%

China44.9%

Japan9.5%

United States9.0%

Korea5.9%

Taiwan3.9%

Other26.8%

2004Total 1,400

thousand tons

Russia22.5%

Canada13.4%

New Caledonia

8.4%Indonesia9.5%

Australia12.7%

Colombia5.4%

Other28.1%


2014Total 2,400

thousand tons

Australia9.2%

Canada9.7%

Indonesia10.0%

New Caledonia

6.9%

Philippines18.3%

Russia10.8%

Other35.1%

2013 2014 2015 2016 2017 2018 2019 2020Mine Production | Thousand metric tons of non-refined nickelGlobal 2,468 1,846 1,961 2,126 2,157 2,214 2,295 2,279Australia 233 272 261 240 216 200 196 195Indonesia 822 175 179 233 282 376 476 476Philippines 236 307 324 339 315 315 315 315Canada 223 227 234 245 241 235 235 228Russia 243 235 238 232 217 221 219 219Nickel Production | Thousand metric tons of refined nickelGlobal 2,010 1,984 1,942 1,929 2,025 2,191 2,286 2,295Consumption | Thousand metric tons of refined nickelGlobal 1,823 1,939 1,979 2,013 2,105 2,161 2,208 2,256Stainless 1,248 1,335 1,357 1,372 1,444 1,487 1,521 1,556Non-stainless 575 604 622 641 660 673 687 701



London Metal Exchange (LME) 6 metric tonsShanghai Futures Exchange (SHFE) 1 metric tonMulticommodity Exchange India (MCX) 250 kilograms

Nickel futures at a glance

Contract: LME Nickel futuresTicker: NIPrice quotation: USD per metric tonSettlement type: Physical


• Global economic growth• Strength of the U.S. dollar• Grade level of existing stocks

1

• Nickel recycled from scraps as a cheap metal source• Demand for stainless steel, which accounts for two-thirds of total nickel consumption

• Market supply expectations based on existing stocks

• Geopolitical pressure in nickel ore producing countries

• Substitution effects due to cheaper Nickel Pig Iron

1,800

2,000

2,200

2,400

2013 2014 2015 2016 2017 2018 2019 2020



Nickel facts

1

• Nickel's substitute in the stainless steel industry, Nickel Pig Iron (NPI), normally tracks LME's refined nickel prices.

• The high melting point and resistance to corrosion make this alloying metal crucial in the stainless steel industry.• SHFE premiums for LME grade nickel generally track increases in Chinese imports that affect market conditions.

FOCUSECONOMICS Tin


January 2016

Tin LME (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago14,532 14,591 19,322-8.5% -8.9% -31.2%



14,88111.9%15,91519.7%17,52631.8%

Q4 16

Q4 17

Spot13,29615-Jan-16

Q1 16

Tin After gaining some ground in December, tin prices decreased at the outset of 2016. Prices plummeted to a record-low in early-January. On 15 January, prices traded at USD 13,296 per metric ton. This represented an 8.5% decrease over the same day in December and an 8.9% drop on a year-to-date basis. The price was down a signifi cant 31.2% over the same day last year.

Tin prices are being weighed down by the continued increase in supply, in particular from Myanmar and China. The emergence of Myanmar as a producer has put a l id on price growth as exports from Myanmar helped to cover the defi cit between demand and supply in China—the world’s biggest producer and consumer of tin. Indonesia, the world’s largest tin exporter, has responded to the jump in supply by slashing domestic production.

The regulations that the Indonesian government recently imposed with the objective of controlling the pace of exports coupled with a decrease in production will contribute to a gradual pickup in prices going forward. In addition, it remains uncertain whether Myanmar will be able to continue as a relevant player in the long run. The International Tin Research Institution’s forecasts suggest that in 2016, production will drop at a faster pace than consumption in the global tin market. Against this backdrop, our panel projects the price to average USD 15,915 per metric ton in Q4 2016 and to increase further and average USD 17,526 per metric ton in Q4 2017.

This month, the majority of the panelists we surveyed maintained their projections unchanged for Q4 2016. Conversely, only 3 panelists revised down their forecasts.

The majority of forecasters foresee tin prices increasing gradually throughout 2016 after having been low last year. That said, some panelists maintain the view that tin will actually lose ground over the course of 2016 and the minimum forecast for Q4 2016 this month was USD 12,728 per metric ton. On the other hand, the maximum price forecast for the last quarter of 2016 is USD 20,200 per metric ton.

.

↑ - ↑ - ↑ -

= 7 = 7 = 5

↓ 4 ↓ 3 ↓ 1


Q1 16 Q4 16 Q4 17

Panelist Spread

Tin prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 13,607 20,415 26,006 21,100 22,273 21,879 16,053 15,658 17,102 17,583 18,517 19,451Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 18,374 15,614 15,217 15,073 14,881 15,303 15,629 15,915 16,914 17,103 17,124 17,526Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 14,788 14,877 14,977 15,175 15,301 15,433 15,513 15,634 15,740 15,865 15,926 15,955Futures Prices (15-Jan) - 13,296 13,308 13,305 13,300 13,297 13,294 13,290 13,287 13,284 13,281 13,278

14,000

16,000

18,000

20,000


10,000

15,000

20,000

25,000Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

FOCUSECONOMICS Tin January 2016


Tin | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017BMI Research - - - - - - - - 15,000 16,500Capital Economics 14,696 15,400 16,750 17,750 18,250 18,750 19,250 19,750 16,149 18,250Commerzbank 14,500 14,750 15,250 15,750 16,500 - - - - -CPM Group 15,100 15,300 15,400 15,800 16,050 16,000 15,750 - 15,400 -Deutsche Bank 15,000 15,000 15,000 15,000 16,000 16,000 16,000 16,000 15,000 16,000EIU 16,200 17,700 17,500 18,600 18,700 18,900 18,300 19,100 17,500 18,750FastMarkets Ltd - - - - - - - - 16,250 -Itaú BBA 14,355 14,247 14,139 14,031 14,023 14,064 14,106 14,149 14,193 14,085Macquarie Bank 14,000 14,000 14,500 14,500 15,000 15,000 15,000 15,000 14,250 15,000OCBC 13,277 13,753 14,229 14,706 - - - - - -Oxford Economics 17,200 18,250 19,050 20,200 21,873 22,190 22,412 22,636 18,675 22,277Pezco Microanalysis 14,239 13,735 13,232 12,728 12,745 13,022 13,299 13,577 13,483 13,161Société Générale 16,000 17,000 17,000 - - - - - 17,000 17,000Standard Chartered 14,000 14,500 15,500 16,000 20,000 20,000 20,000 20,000 15,000 20,000Summary 15054 15092 15466 15772 16415 17008 17114 17325Minimum 13,277 13,735 13,232 12,728 12,745 13,022 13,299 13,577 13,483 13,161Maximum 17,200 18,250 19,050 20,200 21,873 22,190 22,412 22,636 18,675 22,277Median 14,598 14,875 15,325 15,750 16,275 16,000 16,000 17,550 15,200 16,750Consensus 14,881 15,303 15,629 15,915 16,914 17,103 17,124 17,526 15,658 17,102Additional ForecastsIMF (Oct. 2015) 14,263 14,261 14,271 14,277 - - - - 14,268 14,268

Tin LME

4 | Tin Q4 2017 | evol. of fcst.

10,000

15,000

20,000

25,000




12,000

14,000

16,000

18,000



1 | Tin | LME

3 | Tin Q4 2016 | evol. of fcst.

10,000

15,000

20,000

25,000

30,000



Notes and sources

General: London Metal Exchange (LME) Tin spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of LME Tin USD/mt (aop).2 Consensus Forecast of quarterly LME Tin average prices and futures prices traded on the London Mercantile Exchange

(LME) at the end of each quarter. Futures prices are as of spot date.3 Quarterly price of LME Tin, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of LME Tin, evolution of Q4 2017 forecast during the last 8 months.

10,000

15,000

20,000

25,000

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Tin January 2016


2004Total 6,100

thousand tons

China27.9%

Indonesia13.1%

Malaysia16.4%

Peru11.6%

Brazil8.9%

Bolivia7.4%

Other14.8%

2014Total 4,800

thousand tons

China31.3%

Brazil14.6%

Bolivia8.3%

Australia7.7%

Indonesia16.7%

Russia7.3%

Other14.2%


Fact Sheet



China48.4%

Indonesia17.6%

Peru9.6%

Bolivia6.7%

Myanmar4.1%

Other13.5%

China50.9%

United States7.7%

Japan7.1%

Germany5.0%

Korea3.7%

Other25.6%

2004Total 264 thousand

tons

China41.7%

Indonesia25.0%

Peru15.9%

Bolivia6.4%

Brazil4.6%

Other6.4%



tons

China42.2%

Indonesia28.4%

Peru8.0%

Myanmar3.7%

Brazil4.1%

Bolivia6.1%

Other7.5%

2010 2011 2012 2013 2014 2015 2016Mine Production | Thousand metric tons of non-refined tinGlobal 282 281 272 273 282 279 282China 93.0 105.0 95.0 95.0 96.0 97.0 99.0Indonesia 84.0 78.0 90.0 84.0 76.0 70.0 69.0Peru 34.0 29.0 26.0 24.0 21.0 18.0 15.0Myanmar 1.0 2.0 2.0 9.0 25.0 28.0 31.0Tin Production | Thousand metric tons of refined tinGlobal 360 372 368 357 380 379 385Primary 273 271 262 264 272 269 272Consumption | Thousand metric tons of refined tinGlobal 370 382 363 361 374 381 387Solder 195 197 183 177 186 191 197Tinplate 60.0 63.0 61.0 62.0 63.0 63.0 63.0



London Metal Exchange (LME) 5 metric tonsShanghai Futures Exchange (SHFE) 1 metric ton

Tin futures at a glance

Contract: LME Tin futuresTicker: SNPrice quotation: USD per metric tonSettlement type: Physical


• Global economic growth• Strength of the U.S. dollar• Demand for semiconductors

1

• Recycling of clean scraps as a supply source of secondary tin• Substitution effects from plastics and aluminium• Indonesian geopolitical pressure due to its relevance for Chinese imports• Market supply expectations

based on existing stocks

• China sourcing tin from its own mines versus importing refined tin

340

355

370

385

400

2010 2011 2012 2013 2014 2015 2016



Tin facts

1

• Tin is mainly sourced from the 'tin belt', a geographical area stretching through China, Myanmar and Indonesia.• Tin is mainly used as a protective coating on other metals due to its outstanding corrosion resistance properties.• Indonesia, the world's leading exporter of tin, created the Indonesia Tin Exchange (ICDX) in 2013 to allow for domestic trade.

FOCUSECONOMICS Zinc


January 2016

High Grade Zinc LME (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago1,484 1,593 2,054-1.0% -7.8% -28.5%



1,62610.7%1,80222.8%2,04038.9%

Q4 16

Q4 17

Spot1,468

15-Jan-16

Q1 16

ZincThe freefall in zinc prices that started in mid-2015 continued at the outset of 2016 when prices plummeted to record-low levels. On 15 January, zinc traded at USD 1,468 per metric ton, which marked a 1.0% drop over the same day in December and a 7.8% decrease on a year-to-date basis. Zinc prices were 28.5% lower on an annual basis.

The continued drop in prices has been due to LME stocks being signifi cantly higher than expected, Chinese oversupply and weak global demand for galvanized steel, which accounts for more than half of the end-use consumption of zinc. Moreover, investors’ confi dence has been shaky on renewed concerns about the Chinese economy. As a result, many major zinc producers are rebalancing their output due to the current sluggish demand—the latest of which is Nyrstar, which recently announced production cuts—and thus tightening the market.

Expectations that the zinc market will gradually tighten and a pickup in global demand are lifting analysts’ sentiment toward higher prices going forward. Prices are expected to average USD 1,802 per metric ton in Q4 2016. Forecasters expect prices to continue rising gradually through next year and average USD 2,040 per metric ton in Q4 2017.

This month, 7 of the panelists FocusEconomics polled maintained their forecasts unchanged for Q4 2016. Conversely, 7 of them lowered their projections, while only 1 revised up their forecast.

The Consensus view among most panelists is that prices will increase gradually. However, uncertainty persists and analysts’ opinions are split. The maximum average price projected for Q4 2016 is USD 2,150 per metric ton, while the minimum average price forecast is of USD 1,115 per metric ton.

.

↑ - ↑ 1 ↑ -

= 8 = 7 = 4

↓ 10 ↓ 7 ↓ 5


Q1 16 Q4 16 Q4 17

Panelist Spread

Zinc prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 1,663 2,162 2,193 1,948 1,910 2,162 1,929 1,743 1,942 2,025 2,126 2,227Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 2,080 2,188 1,846 1,611 1,626 1,677 1,742 1,802 1,848 1,909 1,963 2,040Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 1,619 1,624 1,635 1,656 1,676 1,699 1,719 1,743 1,765 1,790 1,804 1,813Futures Prices (15-Jan) - 1,469 1,470 1,473 1,477 1,481 1,484 1,488 1,491 1,495 1,497 1,500

1,500

1,750

2,000

2,250

2,500


1,000

1,500

2,000

2,500Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

FOCUSECONOMICS Zinc January 2016


Zinc | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 1,540 1,650 1,750 1,800 1,825 1,900 2,000 2,100 1,700 1,950ANZ 1,550 1,600 1,650 1,700 1,800 1,900 2,000 2,100 - -BMI Research - - - - - - - - 1,750 1,850BMO Capital Markets 1,764 1,543 1,874 1,874 1,874 1,874 1,874 1,874 1,764 1,874Capital Economics 1,609 1,638 1,700 1,800 1,900 1,975 2,050 2,150 1,687 2,019CIBC World Markets - - - - - - - - 1,820 2,088Commerzbank 1,600 1,675 1,750 1,850 1,950 - - - - -CPM Group 1,640 1,635 1,720 1,750 1,765 1,715 1,735 - 1,686 -Danske Bank 1,800 1,900 2,000 2,100 - - - - 1,950 -Deutsche Bank 1,620 1,680 1,700 1,720 1,720 1,750 1,780 1,800 1,680 1,763DZ Bank 1,450 1,550 1,650 - - - - - 1,538 -E2 Economia 1,559 1,611 1,658 1,702 1,746 1,785 1,821 1,854 1,632 1,801EIU 1,650 1,740 1,820 1,890 1,900 1,950 2,000 2,100 1,775 1,988FastMarkets Ltd - - - - - - - - 1,750 -Itaú BBA 1,584 1,646 1,708 1,770 1,795 1,800 1,805 1,811 1,677 1,803JPMorgan 1,550 1,700 1,600 1,650 - - - - 1,625 1,600Macquarie Bank 1,600 1,780 1,900 2,050 2,100 2,250 2,400 2,500 1,833 2,313OCBC 1,557 1,612 1,668 1,724 - - - - - -Oxford Economics 1,900 2,050 2,100 2,150 2,205 2,230 2,240 2,280 2,050 2,239Pezco Microanalysis 1,465 1,349 1,232 1,115 1,121 1,188 1,255 1,322 1,290 1,221Scotiabank Peru - - - - - - - - 1,984 -Société Générale 1,900 2,000 2,000 - - - - - 2,000 2,100Standard Chartered 1,750 1,600 1,700 1,800 1,900 2,200 2,200 2,200 1,750 2,200Toronto-Dominion 1,500 1,580 1,650 2,000 2,116 2,205 2,315 2,425 1,683 2,265Unicredit 1,560 1,680 1,760 - - - - - 1,725 -Summary 1630 1652 1710 1772 1825 1878 1936 2001Minimum 1,450 1,349 1,232 1,115 1,121 1,188 1,255 1,322 1,290 1,221Maximum 1,900 2,050 2,100 2,150 2,205 2,250 2,400 2,500 2,050 2,313Median 1,600 1,646 1,708 1,800 1,874 1,900 2,000 2,100 1,738 1,969Consensus 1,626 1,677 1,742 1,802 1,848 1,909 1,963 2,040 1,743 1,942Additional ForecastsIMF (Oct. 2015) 2,021 2,028 2,034 2,039 - - - - 2,030 2,046

High Grade Zinc

4 | Zinc Q4 2017 | evol. of fcst.

1,000

2,000

3,000

4,000




1,200

1,500

1,800

2,100



1 | High Grade Zinc

3 | Zinc Q4 2016 | evol. of fcst.

1,000

2,000

3,000

4,000



Notes and sources

General: High Grade Zinc spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of High Grade Zinc in USD/mt (aop).2 Consensus Forecast of quarterly High Grade Zinc average prices and futures prices traded on the London Metal Exchange

(LME) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of High Grade Zinc, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of High Grade Zinc, evolution of Q4 2017 forecast during the last 8 months.

1,500

1,750

2,000

2,250

2,500

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Zinc January 2016



United States13.6%

Australia15.0%

Canada5.0%

China15.0%Kazakhstan

13.6%

Peru7.3%

Other30.5%


Australia27.0%

China18.7%

Peru12.6%

Mexico7.0%

United States4.3%

India4.8%

Other25.7%


Fact Sheet



China43.1%

Korea6.8%India

5.2%

Canada4.8%

Japan4.3%

Other35.9%

China46.9%

United States7.0%

Korea4.7%

India4.6%

Japan3.7%

Other33.0%

2004Total 9,549

thousand tons

United States7.7%

Australia13.6%

Canada8.3%

China24.1%

Mexico4.8%

Peru12.6%

Other28.9%


2014Total 13,300

thousand tons

United States6.2% Australia

11.3%

China37.6%Peru

9.8%

India5.3%

Mexico5.3%

Other24.7%

2012 2013 2014 2015 2016 2017 2018Mine Production | Thousand metric tons of non-refined zincGlobal 12,759 12,914 13,065 13,811 14,008 14,453 14,755China 4,500 4,715 4,960 5,198 5,622 5,982 5,401North America 1,979 1,796 1,787 1,852 1,934 1,909 1,985South America 1,823 1,905 1,894 2,082 2,190 2,308 2,350Australia 1,477 1,481 1,507 1,607 1,238 1,245 1,516Zinc Production | Thousand metric tons of refined zincGlobal 12,454 12,939 13,361 14,211 14,665 15,079 15,898China 4,820 5,209 5,747 6,601 6,936 7,036 7,236Capacity util. (%) 80.6 83.4 82.5 86.5 92.3 96.6 105.1Consumption | Thousand metric tons of refined zincGlobal 12,826 13,311 13,881 14,429 15,032 15,690 16,376China 5,606 6,063 6,486 6,875 7,300 7,775 8,250




Zinc futures at a glance

Contract: LME Zinc futuresTicker: ZSPrice quotation: USD per metric tonSettlement type: Physical


• Global economic growth• Strength of the U.S. dollar• Demand for electric goods

1

• Demand from sectors that rely heavily on galvanizing• Zinc recycled from scraps as a cheaper metal source• Exhaustion of Western mines

and lack of new mine projects • Margins on refining charges and treatment charges (TC) for zinc refineries

• Market supply expectations based on existing stocks

12,000

13,200

14,400

15,600

16,800

2012 2013 2014 2015 2016 2017 2018



Zinc facts

1

• Galvanization of other metals accounts for around half of world zinc consumption due to its anticorrosive properties.• Exchange stocks are expected to deplete over the shortfalls in mine production caused by closure of Western zinc mines.• Zinc can be recycled indefinitely without any loss of its physical or chemical properties.

FOCUSECONOMICS Iron Ore


January 2016

Iron Ore CFR China (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago39.0 43.5 69.02.6% -8.0% -42.0%



45.213.0%48.7

21.6%54.1

35.1%

Q4 16

Q4 17

Spot40.0

15-Jan-16

Q1 16

Iron OreIron ore prices have fallen steadily over the past two years amid increased supply and weakening demand. The benchmark iron ore 62% Fe import price including freight and insurance at the Chinese port of Tianjin traded at USD 40.0 per metric ton on 15 January. Prices are up 2.6% from a seven-month low on the same day of December, however, they have fallen 8.0% since the beginning of the year. Prices have plummeted 42.0% compared to the corresponding day of last year. The struggle for market share has driven down prices in China, where more than two-thirds of the world’s iron is consumed. Major suppliers from Australia and Brazil are competing with each other, as well as with domestic Chinese suppliers, and this, combined with weakening demand from China, has dragged prices down to historical lows. The slim profi t margins producers are facing have forced smaller-scale and higher-cost producers out of the market, thereby increasing the potential for prices to rise in the future.

The cheap supply of high-quality iron ore has allowed Chinese steel mills to keep operating and to provide ample iron products to global markets. Analysts foresee iron ore prices gradually increasing this year and averaging USD 48.7 per metric ton in Q4 2016. For Q4 2017, analysts expect prices to increase modestly and average USD 54.1 per metric ton.

As stockpiles increase and suppliers continue competing, downward pressures on iron ore prices will continue to mount. Since last month, none of our panelists felt that the upside risks to iron ore prices outweighed the downside risks. Instead, the majority of panelists revised their Q4 2016 forecasts downward, while the rest left them unchanged. Lower steel output and underlying weak iron ore consumption have prompted iron prices to drop sharply. Prices are expected to stabilize at the outset of 2016 and to increase slowly throughout the year. Panelists are more or less evenly distributed near the USD 50.0 per metric ton mark for Q4 2016, wit h one panelist seeing prices hitting USD 55.0 per metric ton, while the lowest forecaster sees prices at just USD 42.0 per metric ton.

.

↑ - ↑ - ↑ -

= 5 = 3 = 3

↓ 4 ↓ 5 ↓ 3


Q1 16 Q4 16 Q4 17

Panelist Spread

Iron Ore prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 78.9 119.1 140.7 131.8 136.6 97.3 55.7 47.1 50.6 53.5 58.3 63.2Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 62.9 58.3 55.1 46.9 45.2 46.3 47.6 48.7 49.8 51.4 52.6 54.1Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 45.0 45.2 45.4 45.8 46.3 46.7 47.2 47.7 48.1 48.5 48.7 48.8Futures Prices (15-Jan) - 39.2 37.4 36.5 35.9 35.3 34.5 34.4 34.3 33.5 33.1 32.5

30

40

50

60

70

80Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

40

50

60

70




January 2016

Aluminium | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 41.0 41.0 42.0 45.0 50.0 52.0 55.0 55.0 42.0 53.0ANZ 40.0 45.0 45.0 50.0 50.0 52.0 52.0 55.0 - -BMI Research - - - - - - - - 48.0 49.0BMO Capital Markets 42.0 40.0 44.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0Capital Economics 41.5 41.0 43.0 44.5 46.0 48.5 51.0 53.5 43.0 50.0CIBC World Markets - - - - - - - - 45.0 42.0Commerzbank 46.0 47.0 48.0 50.0 52.0 - - - - -Deutsche Bank 50.0 42.0 45.0 48.0 48.0 52.0 52.0 54.0 46.3 51.5EIU 50.0 50.0 50.0 50.0 54.0 54.0 54.0 54.0 50.0 54.0FastMarkets Ltd - - - - - - - - 43.0 -Macquarie Bank 48.0 52.0 52.0 48.0 45.0 45.0 45.0 45.0 50.0 45.0Oxford Economics 51.0 54.0 53.0 54.0 56.0 57.0 57.0 58.0 53.0 57.0Société Générale - - - - - - - - 50.0 50.0Toronto-Dominion 40.0 45.0 50.0 55.0 55.0 60.0 65.0 70.0 48.0 63.0Unicredit 47.7 52.0 52.0 - - - - - 51.7 -Summary 46 46 47 48 49 51 52 53Minimum 40.0 40.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0Maximum 51.0 54.0 53.0 55.0 56.0 60.0 65.0 70.0 53.0 63.0Median 46.0 45.0 48.0 49.0 50.0 52.0 52.0 54.0 48.0 50.0Consensus 45.2 46.3 47.6 48.7 49.8 51.4 52.6 54.1 47.1 50.6Additional ForecastsIMF (Oct. 2015) 44.5 44.3 44.0 43.8 - - - - 44.1 43.5

Iron Ore FIne CFR China

4 | Iron Ore Q4 2017 | evol. of fcst.

40

50

60

70

80




30

40

50

60



3 | Iron Ore Q4 2016 | evol. of fcst.

35

45

55

65

75



Notes and sources

General: Iron ore fines 62% Fe - CFR China Port spot prices in USD per metric ton (mt). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of iron ore fines 62% Fe - CFR China Port in USD/mt (aop).2 Consensus Forecast of quarterly 62% Fe - CFR China Port average prices and futures prices traded on the New York

Mercantile Exchange (NYMEX) at the end of each quarter. Future prices are as of spot date. 3 Quarterly price of iron ore, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of iron ore, evolution of Q4 2017 forecast during the last 8 months.

1 | Iron Ore Fine | CFR China

0

50

100

150

200

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17



January 2016

1,200

1,300

1,400

1,500

1,600

2014 2015 2016 2017 2018

Seaborne Supply

Seaborne demand

Rio Tinto20.0%

BHP13.9%

FMG8.1%Vale

24.8%

Other33.2%

Rio Tinto23.1%

BHP18.8%

FMG11.2%

Vale26.1%

Other20.8%

Seaborn exports by major companies in 2013 and 2018

Fact Sheet



Australia31.1%

Brazil18.4%China

13.6%

CIS countries

10.4%

India6.9%

Other19.7%

China55.0%

European Union7.2%

CIS countries

7.0%

Japan6.9%

India6.2%

Other17.8%


tons

India5.3%

Australia11.3%

Brazil20.3%

Russia17.7%

China8.9%

Ukraine11.4%

Other25.2%



tons

Australia26.4%

Brazil18.4%

Russia16.1%

China8.3%

India6.0%

Canada2.6%

Other22.2%

2014 2015 2016 2017 2018Seaborne supply | Million dry metric tons of iron oreGlobal 1,293 1,326 1,426 1,494 1,566Australia 643 698 768 806 843Brazil 319 339 374 407 437North America 42 50 48 40 37South Africa 65 60 62 61 61Russia 66 66 66 66 73Seaborne demand | Million dry metric tons of iron oreGlobal 1,301 1,280 1,302 1,304 1,314China 864 847 855 848 848Japan 126 126 129 132 135EU 27 109 110 114 116 118Korea 68 65 67 69 71

Global supply and demand outlook


New York Mercantile Exchange (NYMEX) 500 dry metric tonsSingapore Exchange (SGX) 500 dry metric tonsDalian Commodity Exchange (DCE) 100 dry metric tons

Iron ore futures at a glance

Contract: Iron Ore 62% Fe, CFR China (TSI)Ticker: TIOPrice quotation: USD per dry metric tonSettlement type: Financial


• Global economic growth• Transportation costs

1

• Expected growth of Chinese construction activity

• Renminbi (RMB) closely tracking U.S. dollars

• Market supply expectations based on mine production

• Impact of China's supply sustainability on mined iron and imports

• Demand for steel in developing countries where steel from scrap is more scarce

Global production and consumption | Million dry metric tons

Iron ore facts

1

• Iron ore is mostly traded in world markets under contracts, with prices negotiated by iron ore producers and steel manufacturers. Australian and Brazilian fines are the most traded category, followed by lump iron ore.• The annual benchmark price was the most used system until 2010; it has since been dropped in favor of quarterly prices.• Vale, Rio Tinto and BHP Billiton account for around 75% of seaborne trade.

2013 2018

FOCUSECONOMICS Steel


January 2016

Steel EURHot Rolled Coil Steel EUR (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago346 342 4682.2% 3.4% -24.4%



352-0.5%3694.4%3766.2%

Q4 16

Q4 17

Spot354

15-Jan-16

Q1 16

300

400

500

600


Steel USAHot Rolled Coil Steel USA (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago370 379 6016.2% 3.7% -34.6%



4012.1%444

13.1%460

16.9%

Q4 16

Q4 17

Spot393

15-Jan-16

Q1 16

Steel (USA) prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 488 613 746 657 630 658 462 458 472 476 487 499Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 544 456 461 390 401 420 431 444 452 456 458 460Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 397 401 406 415 420 426 427 431 436 442 445 447Futures Prices (15-Jan) - 197 202 207 211 216 221 226 231 236 241 246

300

400

500

600

700


The U.S. stee l market showed a moderate recovery in January in spite of the global oversupply that has kept prices constrained. The commodity traded at USD 393 per metric ton on 15 January, which was up 6.2% compared to the same day in December and was 3.7% higher on a year-to-date basis. Prices fell 34.6% over the same day last year.

Prices are expected to rise, albeit gradually, in the coming years due to ongoing trade disputes being resolved, which is expected to reduce steel imports from China and other markets. Our panel projects that prices will average USD 444 per metric ton in Q4 2016, while panelists project prices to continue to increase in 2017 and average USD 460 per metric ton in Q4.

Steel (Europe) prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt (aop) 571 692 777 659 614 568 420 390 425 438 448 457Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt (aop) 458 439 424 362 352 366 370 369 378 402 389 376Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt (aop) 355 357 352 359 363 366 368 369 370 369 372 369

The European steel market remained stable in January as domestic demand struggled to push prices up in the face of lessening pressure from Chinese imports. Steel traded at USD 354 per metric ton on 15 January. Prices were 2.2% higher compared to the same day in December and were 3.4% higher on a year-to-date basis. Prices were 24.4% lower than on the same day last year.

In spite of the European Union delaying the decision to grant China market economy status, pressures driven by domestic steelmakers and a weak euro are expected to pave the way for an increase in prices. Analysts project that prices will average USD 369 per metric ton in Q4 2016. Panelists forecast prices to continue the trend in 2017, averaging USD 376 per metric ton in Q4.

Steel EUR & Steel USA

FOCUSECONOMICS Steel


January 2016

Metal products14.0%


14.0%

Transport16.0%

Domestic appliances

3.0%

Electrical equipment

3.0%

Construction50.0%

Ingots and semi-finished

11.8%

HR Sheets and Coils

17.3%

Galvanised Sheet9.1%

Steel tubes and fittings

9.3%CR Sheets and Coils

8.4%

HR Bars and

Rods6.9%

Wire Rod6.8%

Plates7.7%

Other22.7%

Share of steel by industry and product

Fact Sheet



China49.8%

Other Asia18.2%

European Union10.1%

CIS countries6.6%

United States5.3%

Other10.0%

China45.0%

Other Asia17.2%

European Union9.1%

United States8.3%

South America

3.9%

Other16.4%


European Union19.0%

CIS countries

11.0%

United States9.4%

China22.9%

Japan11.4%

Korea4.8%

Other21.5%

Distribution of mine production in 2003 and 2013

2013Total 1,649,303 thousand tons

European Union10.1% CIS

countries6.6%

United States5.3%

China49.8%

Japan6.1%

Korea4.0%

Other18.1%

2012 2013 2014 2015 2016 2017 2018Crude Steel production | Million metric tons of crude steelGlobal 1,533 1,625 1,637 1,626 1,649 1,671 1,697China 731 822 823 810 805 800 800European Union 169 166 169 172 177 180 184NAFTA 122 118 120 120 123 128 130Japan 107 111 111 111 114 117 119India 78 81 83 89 94 99 105Korea 69 66 71 72 74 77 79Russia 70 69 71 75 77 79 81Brazil 35 34 34 33 33 34 34Turkey 36 35 34 32 37 38 39Taiwan 21 22 23 23 23 24 24Ukraine 33 33 27 19 22 25 28

Global production outlook


New York Mercantile Exchange (NYMEX) 20 short tonsShanghai Futures Exchange - Rebars 10 metric tonsLondon Metal Exchange (LME) - Billets 65 metric tons

Steel futures at a glance

Contract: U.S. Midwest Domestic Hot-Rolled Coil Steel

Ticker: HRPrice quotation: USD per short tonSettlement type: Financial


• Global economic growth• Transportation costs• Emerging markets demand

1

• Steel mill location as a relevant share of fixed costs• China's increasing self-sufficiency on steel inputs• New construction projects as a

key driver of demand • Price of collateral metals for specific steel products, such as nickel for stainless steel

• Market supply expectations based on producers' capacity

1,400

1,500

1,600

1,700

1,800

2012 2013 2014 2015 2016 2017 2018

Production

Global production | Million metric tons

Steel facts

1

• Average world steel use per capita has increased steadily from 150 kilograms in 2001 to 251.2 kilograms in 2012.

• Prices are set in contracts between major producers and clients; settlements are remarkably disaggregated among regional markets. Markets use different varieties of steel, but Hot Rolled Coil (HRC) is considered a referential price.

• Housing and construction sectors account for around half the total consumption of steel produced.

Industry Steel product

Steel exports by product | share in %Steel industry usage | share in %

FOCUSECONOMICS Gold


January 2016

Gold LME (prices in USD/toz, aop) .

1m ago 31-Dec-15 1y ago1,061 1,062 1,2652.7% 2.6% -13.8%



1,076-1.3%1,083-0.7%1,1707.3%

Q4 16

Q4 17

Spot1,090

15-Jan-16

Q1 16

Gold After hitting a multi-year low in mid-December, gold prices have rallied in recent weeks, although they still remain at low levels. On 15 January, gold closed the trading day at USD 1,090 per troy ounce, which represented a 2.7% rise over the same day in December and a 2.6% gain so far in 2016. However, the price has fallen by 13.8% compared to the same day last year.

Gold prices have come under pressure from a variety of factors in recent months, specifi cally a slow global economic recovery, a low-infl ation environment and a strong U.S. dollar. Moreover, the Federal Reserve’s decision to hike U.S. interest rates on 16 December drove gold prices to a six-year low on 17 December. The rate hike placed downward pressure on the price for gold as it makes the metal less competitive with yield-bearing assets. That said, gold prices had taken a beating in the previous months, suggesting that part of the rate-hike may already have been priced in.

Prices are expected to stabilize in the coming quarters and regain some of the lost ground after December’s multi-year low. Robust demand from China and India should support a moderate rise in prices over the course of the year, while global turmoil and high uncertainty bolster the metal’s appeal as a safe haven asset. Analysts project the price to average USD 1,083 per troy ounce in Q4 2016. The panel sees gold prices rising further next year and averaging USD 1,170 per troy ounce in Q4 2017.

After a largely pessimistic view on gold prices last month, panelists took a wait-and-see approach in January. For Q4 2016, the majority of panelists left their forecasts unchanged, with 10 making no change to their projections. However, 5 panelists revised down their projections, while the forecast was raised by only 1 panelist.

Most of our panelists see the price recovering slightly, yet remaining at historically-low levels throughout 2016. However, divergent views persist. For Q4 2016, the maximum price forecast was USD 1,225 per troy ounce, while the minimum was USD 925 per troy ounce.

.

↑ 2 ↑ 1 ↑ -

= 12 = 10 = 5

↓ 4 ↓ 5 ↓ 1


Panelist Spread

Q4 17Q1 16 Q4 16

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per toz (aop) 973 1,226 1,572 1,669 1,411 1,266 1,160 1,088 1,116 1,159 1,209 1,258Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per toz (aop) 1,219 1,193 1,125 1,105 1,076 1,063 1,073 1,083 1,139 1,144 1,160 1,170Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per toz (aop) 1,082 1,075 1,071 1,062 1,062 1,063 1,070 1,073 1,077 1,080 1,083 1,085Futures Prices (15-Jan) - 1,092 1,091 1,091 1,091 1,091 1,092 1,092 1,093 1,094 1,095 1,096

Gold prices and futures prices

1,000

1,100

1,200

1,300


800

1,000

1,200

1,400

1,600Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Precious Metals

FOCUSECONOMICS Gold January 2016


Gold | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 1,056 1,025 975 925 900 925 963 988 995 944ANZ 1,100 1,125 1,150 1,175 1,250 1,300 1,350 1,400 - -Barclays Capital 1,075 1,060 1,050 1,030 - - - - 1,054 -BMI Research - - - - - - - - 1,000 1,025BMO Capital Markets 1,100 1,000 1,050 1,050 1,100 1,100 1,100 1,100 1,050 1,100BofA Merrill Lynch 1,090 950 1,050 1,100 - - - - - -Capital Economics 1,080 1,125 1,175 1,225 1,250 1,250 1,250 1,250 1,151 1,250CIBC World Markets - - - 950 - - - 1,000 - -Commerzbank 1,100 1,125 1,150 1,200 1,250 - - - - -CPM Group 1,120 1,123 1,114 1,131 1,144 1,141 1,152 1,164 1,122 1,150Credit Agricole 1,025 1,000 1,000 1,025 1,050 1,100 1,175 1,200 - -Danske Bank 1,075 1,100 1,115 1,130 - - - - 1,105 -Deutsche Bank 1,100 1,050 1,000 980 1,050 1,100 1,100 1,150 1,033 1,100DZ Bank 1,050 980 960 950 - - - - 985 -EIU 1,070 1,070 1,100 1,140 1,200 1,220 1,210 1,190 1,095 1,205Emirates NBD 1,033 1,085 1,122 1,159 - - - - 1,099 -FastMarkets Ltd - - - - - - - - 1,148 -Goldman Sachs 1,100 1,050 - 1,000 - - - - - -Itaú BBA 1,047 1,042 1,037 1,032 1,027 1,022 1,018 1,016 1,039 1,021JPMorgan 1,075 1,080 1,110 1,150 - - - - 1,104 -Macquarie 1,140 1,125 1,150 1,160 1,200 1,200 1,225 1,250 1,144 1,219Novobanco - - - - - - - - 1,215 -OCBC 1,025 1,000 975 950 - - - - - -Scotiabank Peru - - - - - - - - 1,185 -Société Générale 1,025 1,000 1,000 - - - - - 1,000 950Standard Chartered 1,095 1,125 1,140 1,160 1,180 1,200 1,225 1,250 1,130 1,214Toronto-Dominion 1,085 1,100 1,150 1,200 1,200 1,175 1,150 1,125 1,134 1,163Summary 1,081 1,069 1,068 1,078 1,111 1,141 1,152 1,165Minimum 1,025 950 960 925 900 925 963 988 985 944Maximum 1,140 1,125 1,175 1,225 1,250 1,300 1,350 1,400 1,215 1,250Median 1,080 1,070 1,075 1,115 1,180 1,158 1,164 1,177 1,097 1,140Consensus 1,076 1,063 1,073 1,083 1,139 1,144 1,160 1,170 1,088 1,116

Gold LME

4 | Gold Q4 2017 | evol. of fcst.

800

1,000

1,200

1,400

1,600




1,050

1,100

1,150

1,200



1 | Gold | LME

3 | Gold Q4 2016 | evol. of fcst.

800

1,000

1,200

1,400

1,600



Notes and sources

General: London Bullion Market Gold (LME) spot prices in USD per troy ounce (toz). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of London Bullion Market Gold (LME) in USD/toz (aop).2 Consensus Forecast of quarterly London Bullion Market Gold (LME) average prices and futures prices traded on the New

York Mercantile Exchange (COMEX division) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of London Bullion Market Gold (LME), evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of London Bullion Market Gold (LME), evolution of Q4 2017 forecast during the last 8 months.

1,000

1,200

1,400

1,600

1,800

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Gold January 2016


Total 20142,195

metric tons

Jewellery87%

Electronics3%

Other Industrial

2%Official Coins

4%Medals

4%

Total 2014631

metric tons

Jewellery48%

Electronics33%

Dentistry5%

Other Industrial

7%

Official Coins

7%

Usage of gold by industry in developing and developed countries

Fact Sheet



China14.7%

Australia8.7%

Russia8.4%

US6.5%

Peru5.5%

South Africa5.2%

Other50.9%

China27.9%

India26.5%US

7.5%

Germany4.0%

Japan3.7%

Other30.3%

Total World 200431,584 metric tons

US25.9%

Germany10.9%

France9.6%Italy

7.8%Switzerland

5.2%

Netherlands2.5%

Other38.1%

Central banks’ gold reserves in 2004 and 2014

World 32180.0 metric tons in 2014

US25.4%

Germany10.6%

Italy7.7%France

7.6%Russia3.8%

China3.3%

Other41.7%

2007 2008 2009 2010 2011 2012 2013 2014Supply | Metric tonsGlobal 3,072 3,424 4,106 4,349 4,539 4,513 4,310 4,362Mine production 2,499 2,429 2,612 2,742 2,846 2,875 3,061 3,133Scrap 1,006 1,352 1,728 1,713 1,675 1,677 1,287 1,125Net hedging -432 -357 -234 -106 18 -40 -39 103Demand | Metric tonsGlobal 2,864 3,460 3,038 3,807 4,515 4,321 5,041 4,158Jewellery 2,426 2,308 1,819 2,033 2,034 2,008 2,439 2,213Industrial 487 471 422 476 468 426 419 400Net official sector -484 -235 -34 77 457 544 409 466Real investment 436 916 830 1,221 1,556 1,343 1,775 1,079

Global supply and demand


New York Mercantile Exchange (COMEX) 100 ouncesDubai Gold and Commodities Exchange 32 ouncesMulti Commodity Exchange of India 100 ounces

Gold futures at a glance

Contract: CMX-Gold 100 ozTicker: GCPrice quotation: USD per ounceSettlement type: Deliverable


• Strength of the U.S. dollar

• Demand from China and India• Geopolitical tensions• Inflation pressures• Central banks' reserves

1

• Declining confidence in paper money

• Mining and new exploration costs • Stock markets and interest

rates

• Gold production, supply and demand disequilibria

2,000

3,000

4,000

5,000

6,000

2007 2008 2009 2010 2011 2012 2013 2014

SupplyDemand

Global supply and consumption | Metric tons

Gold facts

• India is the world’s largest market for gold jewelry.1

• Comex futures contracts refer to gold of a minimum of 995 fineness.• London is the world's biggest clearing house; Dubai, Hong Kong, Istanbul and Singapore are gateways to important consuming regions.

Industry in developed | share in %Industry in developing | share in %

FOCUSECONOMICS Silver


January 2016

Handy & Harman Silver (prices in USD/toz, aop) .

1m ago 31-Dec-15 1y ago13.7 13.9 17.12.0% 1.0% -18.2%



14.43.0%15.18.1%16.4

17.1%

Q4 16

Q4 17

Spot14.0

15-Jan-16

Q1 16

Silver Silver prices tumbled to a multi-year low in mid-December, and, after a short-lived rebound, have languished at low levels. On 15 January, silver closed the trading day at USD 14.0 per troy ounce, which represented a 2.0% rise over the same day in December and 1.0% gain year-to-date. However, silver has lost a notable 18.2% of its value compared to the same day last year.

The downward pressure comes amid weaknesses in both the gold and industrial metals markets. Silver prices are uniquely affected by both markets due to silver’s many industrial uses as well as its role as a store of value, along with gold, for investors. Both of these markets have experienced downturns in recent months, battering silver prices. Notably, the price fell to an over-six-year low on 17 December, the day after the Fed decided to hike interest rates. The prices of both gold and silver plunged as the rate hike erodes the metals’ competitiveness as an investment.

Silver prices are expected to remain under pressure in the coming quarters, but are seen regaining some lost ground at the end of the year. The price should recover as the global economy picks up steam and demand for industrial uses increases. In addition, bullion demand is expected to remain strong and the U.S. Mint announced in January that it had set the fi rst weekly allocation of American Eagle silver coins at four million ounces, which is quadruple the amount rationed in the last fi ve months of 2015. Our panel sees the price of silver averaging USD 15.1 per troy ounce in Q4 2016. For 2017, the panel sees prices rising further and averaging USD 16.4 per troy ounce in Q4.

Despite the recent downward momentum in prices, the majority of our panelists maintained their forecasts this month. For Q4 2016, 9 panelists made no change to their forecasts, while 4 lowered them.

All of our panelists see prices increasing, however, divergent views persist regarding the extent of the increase. For Q4 2016, panelists’ minimum price projected is USD 13.3 per troy ounce, while the maximum is USD 17.0 per troy ounce.

.

↑ 1 ↑ - ↑ -

= 10 = 9 = 4

↓ 4 ↓ 4 ↓ 2


Q1 16 Q4 16 Q4 17

Panelist Spread

14

15

16

17

18


10

15

20

25Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per toz (aop) 14.7 20.2 35.3 31.1 23.8 19.1 15.7 14.9 16.0 17.3 18.8 20.4Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per toz (aop) 16.8 16.4 14.9 14.8 14.4 14.4 14.8 15.1 16.1 16.3 16.5 16.4Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per toz (aop) 14.5 14.4 14.4 14.3 14.4 14.5 14.6 14.8 14.9 15.0 15.2 15.2Futures Prices (15-Jan) - 13.9 13.9 13.9 13.9 14.0 14.0 14.0 14.0 14.1 14.1 14.1

Silver prices and futures prices

FOCUSECONOMICS Silver January 2016


Siver | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 13.7 13.8 14.3 14.8 15.3 15.8 16.5 17.5 14.1 16.3ANZ 14.9 15.5 16.2 16.9 18.4 19.5 20.8 21.9 - -BofA Merrill Lynch 14.5 12.7 14.0 14.7 - - - - - -BMO Capital Markets 13.5 13.3 14.3 15.0 15.0 15.0 15.0 15.0 14.0 15.0Capital Economics 14.0 14.5 15.3 16.1 16.6 16.9 17.3 17.8 15.0 17.1CIBC World Markets - - - 13.4 - - - 14.7 - -Commerzbank 14.5 15.0 16.0 17.0 17.0 - - - - -CPM Group 14.5 14.6 14.2 14.6 15.0 14.9 14.7 14.5 14.5 14.8Deutsche Bank 14.8 14.6 14.0 13.6 14.5 15.0 15.5 16.0 14.3 15.3DZ Bank 14.5 14.0 13.8 13.3 - - - - 13.9 -EIU 14.2 14.2 14.6 15.1 15.9 16.2 16.1 15.8 17.8 18.1FastMarkets Ltd - - - - - - - - 14.5 -Goldman Sachs 15.3 14.8 - 14.5 - - - - - -JPMorgan 15.2 15.2 15.7 16.2 - - - - 15.6 -Macquarie 15.1 14.8 15.3 16.0 17.0 18.0 19.0 18.5 15.3 18.1OCBC 14.4 14.5 14.6 14.6 - - - - - -Société Générale 14.0 14.0 14.0 - - - - - 14.0 14.0Scotiabank Peru - - - - - - - - 16.5 -Standard Chartered 14.4 14.7 15.0 15.1 15.5 15.2 14.8 15.0 14.8 15.1Toronto-Dominion 14.3 14.8 15.8 16.5 16.6 16.3 15.3 15.0 15.3 15.8Unicredit 13.8 14.0 14.2 - - - - - 14.3 -Summary 14.5 14.4 14.6 15.0 15.6 16.2 16.4 16.4Minimum 13.5 12.7 13.8 13.3 14.5 14.9 14.7 14.5 13.9 14.0Maximum 15.3 15.5 16.2 17.0 18.4 19.5 20.8 21.9 17.8 18.1Median 14.4 14.5 14.6 15.0 15.9 16.0 15.8 15.4 14.5 15.5Consensus 14.4 14.4 14.8 15.1 16.1 16.3 16.5 16.4 14.9 16.0

Handy & Harman Silver

4 | Silver Q4 2017 | evol. of fcst.

10

15

20

25

30




13

14

15

16

17



1 | Silver | Handy & Harman

3 | Silver Q4 2016 | evol. of fcst.

10

15

20

25



Notes and sources

General: Handy & Harman, 99.9% refined grade Silver spot prices in USD per troy ounce (toz). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of Handy & Harman, 99.9% refined grade Silver in USD/toz (aop).2 Consensus Forecast of quarterly Handy & Harman, 99.9% refined grade Silver average prices and futures prices traded

on the New York Mercantile Exchange (COMEX division) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of Handy & Harman, 99.9% refined grade Silver, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of Handy & Harman, 99.9% refined grade Silver, evolution of Q4 2017 forecast during the last 8 months.

10

20

30

40

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Silver January 2016


Total 20148209.0

metric tons

China29.5%

US20.4%Japan

12.7%

Germany6.3%

India6.1%

South Korea5.2%

Taiwan4.7%

Russia3.8%

Mexico2.2%

Others9.0%

Total 2014 2056 metric tons

China56.9%

US8.9%

India4.0%

UK3.3%

Germany3.2%

Japan3.1%

South Korea2.7%

Others18.0%

Industrial sector usage by country in 2014

Fact Sheet



Mexico21.0%

Peru13.2%

China12.5%

Australia6.5%

Chile5.5%

Bolivia4.7%

Other36.8%

China23.5%

India20.1%

US12.1%

Japan7.0%

Canada3.1%

Italy2.7%

Other31.4%

Total 2005270,000 metric tonsPoland

18.9%

Mexico13.7%

Peru13.3%

Australia11.5%

China9.6%

US9.3%

Canada5.9%Other

17.8%

Reserves by country in 2005 and 2015

Total 2015530,000

metric tonsPeru18.7%

Poland16.0%

Australia16.0%

Chile14.5%

China8.1%

US4.7%

Bolivia4.2%

Others17.8%

2008 2009 2010 2011 2012 2013 2014Supply | Million ouncesGlobal 907 916 1,073 1,041 1,005 1,001 1,062Mine production 683 716 751 755 789 835 878Net gov. sales 30.5 15.6 44.2 12.0 7.4 7.9 -Scrap 202 201 228 262 256 193 169Net hedging -8.7 -17.4 50.4 12.2 -47.1 -35.4 15.8Demand | Million ouncesGlobal 1,078 860 1,031 1,075 963 1,112 1,067Jewellery 178 178 191 189 186 212 215Coins and bars 187 88 143 211 138 244 196Silverware 58.4 53.2 51.6 47.2 43.7 58.8 60.7Industrial fabric. 654 542 645 628 595 598 595

Global supply and demand


New York Mercantile Exchange (COMEX) 5,000 ouncesEuronex Liffe NYSE 5,000 ouncesTokyo Commodity Exchange (TOCOM) 10,000 grams

Silver futures at a glance

Contract: CMX-Silver 5,000 ozTicker: SIPrice quotation: USD per ounceSettlement type: Deliverable


• Health of electronics industry• Strength of the U.S. dollar• Gold price dynamics

• Geopolitical tensions1

• Decline in production of film photography• Development of new technologies• Economic growth, mainly in

China and India • Commodity-specific events like mine or plant closures

800

900

1,000

1,100

1,200

2008 2009 2010 2011 2012 2013 2014

SupplyDemand

Global supply and demand | Million ounces

Silver facts

• Lead ore is the main source of silver.

1

• London Bullion Market Association (LBMA) is the metal’s main physical market.• Comex is the futures and options exchange where most fund activities are focused.

• Silver is suitable for a wide range of applications such as in medicine, water purification and nanotechnology.

Electronics industry | share in % Brazing industry | share in %

FOCUSECONOMICS Palladium


January 2016

Palladium LME (prices in USD/toz, aop) .

1m ago 31-Dec-15 1y ago558 555 780

-11.8% -11.4% -36.9%



59120.1%679

38.0%737

49.9%

Q4 16

Q4 17

Spot492

15-Jan-16

Q1 16

PalladiumPalladium prices continued their downward trajectory in recent weeks and dropped to the lowest level in over fi ve years on 12 January. On 15 January, the price of palladium closed the day at USD 492 per troy ounce, which was down 11.8% from the same day in December. The result represents a signifi cant 11.4% fall in prices so far this year and a massive 36.9% decline over the same day in 2015.

Palladium prices have come under pressure in recent months due to a variety of factors. A strong U.S. dollar, negative investor sentiment and a broader selloff across the metals market has pushed the price to multi-year lows. This downward momentum comes despite data showing robust automobile sales in both the U.S. and China in 2015. One of the main uses of palladium is in gasoline vehicles.

Looking forward, prices are expected to pick up gradually in the upcoming quarters, as a supply defi cit and resilient demand for cars from the U.S. propels steady gains. Analysts polled for this month’s FocusEconomics Consensus Forecast project that the price will average USD 679 per troy ounce in Q4 2016 and see prices rising to an average of USD 737 per troy ounce in Q4 2017.

This month, the majority of panelists took a wait-and-see approach and held their forecasts for Q4 2016, with 8 leaving them unchanged. In contrast, 3 panelists had a more pessimistic view and cut their projections.

The Consensus view of our panel of analysts is that palladium prices will rise gradually in 2016 following the lows registered at the beginning of January. However, panelists have divergent views on the extent of the recovery. For Q4 2016, the maximum price forecast is USD 750 per troy ounce, while the minimum is projected to be USD 575 per troy ounce.

.

↑ - ↑ - ↑ -

= 6 = 8 = 4

↓ 7 ↓ 3 ↓ 2


Q1 16 Q4 16 Q4 17

Panelist Spread

400

600

800

1,000


400

500

600

700

800

900Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per toz (aop) 264 528 733 643 725 803 691 622 709 783 847 912Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per toz (aop) 786 759 616 606 591 622 650 679 692 705 717 737Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per toz (aop) 585 590 597 612 621 632 639 650 660 673 680 684Futures Prices (15-Jan) - 487 488 487 487 488 488 489 - - - -

Palladium prices and futures prices

FOCUSECONOMICS Palladium January 2016


Palladium | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 506 475 525 575 613 638 663 688 520 650ANZ 600 640 680 700 725 750 775 800 - -Barclays Capital - - - - - - - - - -BMO Capital Markets 550 600 700 750 750 750 750 750 650 750Capital Economics 553 575 650 725 770 808 843 880 626 825Commerzbank 575 600 650 700 750 - - - - -CPM Group 560 590 575 595 615 640 620 635 580 628Deutsche Bank 580 620 650 660 650 660 640 730 628 670EIU 650 650 650 650 690 690 690 690 650 690FastMarkets Ltd - - - - - - - - 535 -Goldman Sachs 720 725 - 750 - - - - - -JPMorgan 650 650 675 700 - - - - 669 -Macquarie 580 625 650 700 675 700 725 750 639 713OCBC 653 658 663 669 - - - - - -Société Générale 650 680 750 - - - - - 695 725Standard Chartered 570 640 660 680 700 715 735 750 638 725Toronto-Dominion 525 600 625 650 675 700 725 750 600 713Unicredit 530 620 640 - - - - - 623 -Summary 608 606 636 664 685 699 711 727Minimum 506 475 525 575 613 638 620 635 520 628Maximum 720 725 750 750 770 808 843 880 695 825Median 578 623 650 690 690 700 725 750 633 713Consensus 591 622 650 679 692 705 717 737 622 709

Palladium LME

4 | Palladium Q4 2017 | evol. of fcst.

400

600

800

1,000

1,200

1,400




400

500

600

700

800



1 | Palladium | LME

3 | Palladium Q4 2016 | evol. of fcst.

200

400

600

800

1,000


Maximum

Consensus

Minimum

Notes and sources

General: London Metal Exchange (LME) Palladium spot prices in USD per troy ounce (toz). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of London Metal Exchange (LME) Palladium in USD/toz (aop).2 Consensus Forecast of quarterly London Metal Exchange (LME) Palladium average prices and futures prices traded on

the New York Mercantile Exchange (COMEX division) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of London Metal Exchange (LME) Palladium, evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of London Metal Exchange (LME) Palladium, evolution of Q4 2017 forecast during the last 8 months.

400

600

800

1000

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Palladium January 2016



ounces

North America25.4%

Europe24.4%

Japan13.5%

China23.2%

Other13.4%


ounces

North America14.5%

Europe40.4%

Japan5.4%

China17.4%

Other22.3%

Fact Sheet



Russia44.0%

South Africa31.3%

Canada8.6%

US6.6%

Zimbabwe5.4%

Other4.0%

North America21.6%

Europe20.9%

Japan14.2%

China21.7%

Other21.7%

2005World mine

production 6,953 thousand ounces

South Africa37.3%

North America13.4%

Russia45.1%

Other4.3%


2015World mine

production 6,627 thousand ounces

South Africa34.3%

North America14.6%

Russia40.0%

Zimbabwe5.0%

Other6.0%

2014 2015 2016 2017 2018 2019 2020Supply | Thousand ouncesGlobal 8,102 8,671 8,936 9,161 9,321 9,512 9,738South Africa 1,771 2,276 2,421 2,511 2,521 2,546 2,585North America 976 969 951 944 938 931 924Russia 2,650 2,650 2,650 2,650 2,650 2,650 2,650Zimbabwe 279 332 342 342 342 342 342Autocat. recycling 1,926 2,044 2,172 2,314 2,470 2,643 2,837Demand | Thousand ouncesGlobal 9,821 9,471 9,703 9,970 10,257 10,535 10,803Autocatalyst 7,460 7,834 8,151 8,496 8,857 9,207 9,548Dental 450 445 430 415 403 390 375Electrical 601 511 441 373 306 241 176Chemical 510 551 553 560 567 575 584Investment 800 130 128 126 124 122 120



New York Mercantile Exchange (NYMEX) 100 ouncesTokyo Commodity Exchange (TOCOM) 500 gramsMoscow Exchange (MOEX) 10 ounces

Palladium futures at a glance

Contract: NYM-Palladium 100 ozTicker: PAPrice quotation: USD per ounceSettlement type: Deliverable


• Health of electronics industry• Stocks movements• Mines' productive capacities

• Variation in platinum prices1

• Automotive industry's growing demand• Development of new technologies• Commodity-specific events like

mine or plant closures • Russian and South African geopolitical pressure

8,000

9,000

10,000

11,000

2014 2015 2016 2017 2018 2019 2020

Supply

Demand

Global supply and demand | Thousand ounces

Palladium facts

1

• Palladium is one of the rarest metals on earth: It's 15 times more rare than platinum and 30 times than gold.

• Palladium's application is in the catalytic converters as substitute for platinum, followed by electronics and jewellery.

• The London Platinum and Palladium Market is the world's leading market for platinum and palladium. LPPM members fix the bid prices twice a working day.

Chemicals | share in %Autocatalysts | share in %

Industry share of palladium usage by country

FOCUSECONOMICS Platinum


January 2016

Platinum LME (prices in USD/toz, aop) .

1m ago 31-Dec-15 1y ago852 868 1,258

-1.5% -3.3% -33.3%



9007.3%976

16.4%1,07828.4%

839Spot

Q4 16

Q4 17

15-Jan-16

Q1 16

Platinum Platinum prices languished near multi-year lows in the beginning of 2016 amid a backdrop of subdued metals prices. On 15 January, platinum traded at 839 USD per troy ounce, which represented a 1.5% loss over the same day in December. In addition, the price has declined 3.3% year-to-date and has nosedived 33.3% compared to the same day last year.

The drastic deterioration in prices over the past months has been mainly driven by surplus supply, which is partly attributed to a recovery in production in South Africa following past mining strikes. In addition, the Volkswagen scandal and a broad-based fall in commodity prices have contributed to the decline. Besides jewelry, platinum’s main use is in vehicles for treating emissions and the fallout from the VW scandal has pushed prices down further.

Platinum prices are expected to recover going forward, albeit moderately. The low-price environment seen in the past months has led to cuts in production, which, in the medium-term, should improve the supply-demand inequalities and put upward pressure on prices. The potential for tighter emissions legislation to be enacted in the aftermath of the Volkswagen scandal could also increase prices going forward. Analysts surveyed by FocusEconomics see prices averaging 976 USD per troy ounce in Q4 2016. The panel sees prices rising to USD 1,078 per troy ounce in Q4 2017.

This month, most of the panelists maintained their forecasts for Q4 2016 unchanged, despite recent developments. 8 Panelists left their projections stable, while 2 panelists cut their forecast.

All of our panelists see prices rising from their current low level, however, their opinions differ regarding how large the gain will be. For Q4 2016, analysts’ projections rest between a maximum forecast of USD 1,200 per troy ounce and a minimum of USD 875 per troy ounce.

.

↑ 2 ↑ - ↑ -

= 7 = 8 = 3

↓ 3 ↓ 2 ↓ 2


Q1 16 Q4 16 Q4 17

Panelist Spread

750

1,000

1,250

1,500


600

800

1,000

1,200

1,400Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per toz (aop) 1,205 1,611 1,719 1,549 1,485 1,384 1,052 968 1,071 1,166 1,249 1,332Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per toz (aop) 1,193 1,126 988 906 900 910 952 976 989 995 1,014 1,078Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per toz (aop) 903 898 899 901 909 921 939 952 964 972 978 979Futures Prices (15-Jan) - 826 827 828 828 828 830 832 - - - -

Platinum prices and futures prices

FOCUSECONOMICS Platinum January 2016


Platinum | Forecasts and futures prices

Annual averageIndividual Forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 847 813 838 875 925 975 1,025 1,075 843 1,000ANZ 850 875 890 900 900 900 900 900 - -Barclays Capital - - - - - - - - - -BMO Capital Markets 825 725 900 950 950 950 950 950 850 950Capital Economics 872 888 938 988 1,013 1,038 1,075 1,125 921 1,063Commerzbank 900 950 1,050 1,100 1,200 - - - - -CPM Group 880 900 880 930 1,000 1,050 1,025 1,010 898 1,021Deutsche Bank 880 900 1,000 950 900 920 950 1,020 933 948EIU - - - - - - - - 1,135 1,170Emirates NBD 946 988 1,032 1,071 - - - - 1,009 -FastMarkets Ltd - - - - - - - - 1,000 -Goldman Sachs 950 925 - 925 - - - - - -JPMorgan 1,050 1,100 1,150 1,200 - - - - 1,125 -Macquarie 875 825 850 900 950 1,000 1,050 1,100 863 1,025OCBC 882 889 897 905 - - - - - -Société Générale 1,000 1,025 1,025 - - - - - 1,025 1,050Standard Chartered 915 970 1,000 1,025 1,075 1,120 1,150 1,210 978 1,139Toronto-Dominion 850 890 925 950 975 1,000 1,000 1,025 904 1,000Summary 936 905 931 964 983 992 1,004 1,046Minimum 825 725 838 875 900 900 900 900 843 948Maximum 1,050 1,100 1,150 1,200 1,200 1,120 1,150 1,361 1,135 1,253Median 880 900 925 950 963 1,000 1,025 1,050 933 1,038Consensus 900 910 952 976 989 995 1,014 1,078 968 1,071

Platinum LME

4 | Platinum Q4 2017 | evol. of fcst.

800

1,000

1,200

1,400

1,600




800

900

1,000

1,100



1 | Platinum | LME

3 | Platinum Q4 2016 | evol. of fcst.

700

900

1,100

1,300

1,500



Notes and sources

General: London Free Market Platinum (LME) spot prices in USD per troy ounce (toz). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast.1 Quarterly prices of London Free Market Platinum (LME) in USD/toz (aop).2 Consensus Forecast of quarterly London Free Market Platinum (LME) average prices and futures prices traded on the

New York Mercantile Exchange (COMEX division) at the end of each quarter. Futures prices are as of spot date. 3 Quarterly price of London Free Market Platinum (LME), evolution of Q4 2016 forecast during the last 8 months.4 Quarterly price of London Free Market Platinum (LME), evolution of Q4 2017 forecast during the last 8 months.

500

1,000

1,500

2,000

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17

FOCUSECONOMICS Platinum January 2016


2014Total 3,003

thousand ounces

North America15.0%

Europe42.8%Japan

9.3%

China9.4%

Other23.5%


ounces

North America13.5%

Europe16.4%

Japan7.7%

China25.9%

Other36.6%

Fact Sheet



South Africa65.2%

Russia15.3%

Zimbabwe8.5%

Canada5.3%

US2.5%

Other3.3%

North America15.9%

Europe25.3%

Japan9.4%

China30.7%

Other18.7%

2005World Mine

Production was 6,624 thousands

ounces

South Africa76.3%

North America

5.4%

Russia14.5%

Other3.8%


2015World Mine

Production was 5493 thousand

ounces

South Africa68.7%

North America

6.6%Russia13.8%

Zimbabwe7.3%

Other3.5%

2014 2015 2016 2017 2018 2019 2020Supply | Thousand ouncesGlobal 6,064 6,983 7,308 7,715 7,768 7,903 8,066South Africa 2,992 3,776 3,913 4,185 4,061 4,088 4,130North America 378 360 360 345 350 350 350Russia 760 760 760 760 760 760 760Zimbabwe 403 402 448 448 448 448 448Other 205 195 200 205 210 215 220Autocat. recycling 1,326 1,490 1,627 1,773 1,939 2,042 2,159Demand | Thousand ouncesGlobal 7,380 7,525 7,766 7,943 7,693 7,753 7,902Autocatalyst 3,273 3,407 3,539 3,634 3,760 3,855 3,957Chemical 650 655 644 652 659 666 675Jewellery 2,221 2,385 2,382 2,390 2,309 2,225 2,247Other 1,236 1,078 1,201 1,267 965 1,007 1,023



New York Mercantile Exchange (NYMEX) 50 ouncesTokyo Commodity Exchange (TOCOM) 500 gramsJohannesburg Stock Exchange (JSE) 10 ounces

Platinum futures at a glance

Contract: NYM-Platinum 50 ozTicker: PLPrice quotation: USD per ounceSettlement type: Deliverable


• Health of the auto industry• Technological developments

• Demand for gold

1

• Currency movement, interest rates, global economy

• Consumers' choices in jewelry industry

• Labor conditions and collective bargaining in South Africa

• Demand for palladium in autocatalytic applications

• Economic conditions in major consuming countries like USA, Europe, Japan

5,000

6,000

7,000

8,000

9,000

2014 2015 2016 2017 2018 2019 2020

Supply

Demand

Global supply and demand | Thousad ounces

Platinum facts

1

• Platinum is the rarest precious metal and its unique chemical and physical properties make it a key element in a wide range of environmental and industrial applications.• The London Platinum and Palladium Market is the world’s leading market for platinum and palladium. LPPM members fix the bid prices twice per working day.• Platinum's most important application is in catalytic converters, but it is also used in medical applications like chemotherapy.

Industry share of platinum usage by country

Chemicals | share in %Autocatalytics | share in %

FOCUSECONOMICS Corn


January 2016

CornCorn prices have followed a mild downward trajectory since mid-December and continued to decrease slightly during the fi rst days of the year before picking up slightly in mid-January. The spot price recorded on 15 January was USD 355 cents per bushel. The price was 3.7% lower than on the same day in December, but was up 1.4% on a year-to-date basis. In annual terms, the price was down 1.8%.

The slight downward trend in prices between mid-December and early-January came partly on the back of a slowing pace of both domestic demand in the U.S. and U.S. exports. In addition, favorable weather conditions in South Africa and South America triggered expectations of production rising. However, prices ticked up following the release of several reports on 12 January, including the key World Agricultural Supply and Demand Estimates Report, which lowered estimates for recent U.S. harvests and plantings last winter.

Prices are expected to gain some momentum and panelists project corn prices to average USD 402 cents per bushel in Q4 2016. For Q4 2017, panelists forecast the price to average USD 411 cents per bushel.

Annual averageIndividual forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 375 395 415 415 - - - - 415 -ANZ 390 400 370 360 430 440 410 400 - -BMI Research - - - - - - - - 425 435Capital Economics 352 343 338 333 335 350 370 390 341 361Commerzbank 432 432 445 445 457 - - - - -Danske Bank 375 400 410 420 - - - - 401 -DZ Bank 405 410 425 450 - - - - 423 -E2 Economia 352 338 338 341 344 346 349 351 342 347EIU 457 470 470 483 483 495 495 508 470 495Goldman Sachs 375 375 - 375 - - - - - -Itaú BBA 376 385 393 402 406 407 408 408.6 389 407Société Générale 412 399 384 - - - - - 415 415Summary 390 393 397 401 406 408 407 409Minimum 352 338 338 333 335 346 349 351 341 347Maximum 457 470 470 483 483 495 495 508 470 495Median 376 399 402 409 418 407 408 400 415 411Consensus 391 395 399 402 409 408 406 411 402 410Additional ForecastsIMF (Oct. 2015) 449 454 446 439 - - - - 447 443

Corn CBOT (prices in USD cents/bu, aop) .

1m ago 31-Dec-15 1y ago369 350 362

-3.7% 1.4% -1.8%



39110.1%402

13.3%411

15.9%

Q4 16

Q4 17

Spot355

15-Jan-16

Q1 16

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD cents per bu 355 403 670 699 598 398 362 402 410 419 437 456Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD cents per bu 366 354 364 363 391 395 399 402 409 408 406 411Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD cents per bu 390 391 392 394 395 396 397 399 400 402 402 403Futures Prices (15-Jan) - 363 368 373 378 385 394 400 404 399 399 407

Corn prices and futures prices

Notes and sources

Corn spot prices in USD cents per bushel (bu). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast. Consensus Forecast of quarterly corn average prices and annual average prices. Futures prices traded on the Chicago Board of Trade (CBOT). Futures prices are as of spot date.

300

350

400

450


Agricultural

FOCUSECONOMICS Corn


January 2016

800,000

900,000

1,000,000

1,100,000

2011/12 2012/13 2013/14 2014/15 2015/16

Production

Consumption


2004/2005Total 131,320 thousand tons

United States40.9%

China27.8%

European Union5.7%

Brazil3.2%

Mexico3.4%

Other18.9%


United States21.1%

China48.1%

European Union4.4%

Brazil5.6%

Mexico2.0%

Other18.8%

Distribution of ending stocks in 2004/05 and 2014/15

Fact Sheet



United States35.8%

China21.4%

Brazil8.4%

European Union7.5%

Argentina2.6%

Other24.3% United

States30.9%

China20.7%

Brazil5.8%

European Union2.3%

Indonesia1.5%

Other38.7%


United States32.8%China

19.1%

European Union7.5%

Brazil5.6%

Mexico4.1%

Other30.8%

Distribution of total use in 2004/05 and 2014/15


United States30.9%

China20.7%European

Union8.0%

Brazil5.8%

Mexico3.5%

Other31.0%

2011/12 2012/13 2013/14 2014/15 2015/16Production | Thousand metric tonsGlobal 889,772 870,303 991,433 1,008,788 974,866Brazil 73,000 81,500 80,000 85,000 81,500China 192,780 205,614 218,490 215,670 225,000European Union 68,123 58,896 64,630 75,730 57,751United States 312,789 273,192 351,272 361,091 346,815Others 243,080 251,101 277,041 271,297 263,800Consumption | Thousand metric tonsGlobal 885,051 865,187 949,456 975,462 971,164Brazil 51,500 52,500 55,000 57,000 59,000China 188,000 200,000 208,000 202,000 214,000European Union 17,200 17,500 19,600 22,000 22,300United States 277,961 262,973 292,965 301,851 301,131



Chicago Board of Trade (CBOT) 5,000 bushelsTokyo Grain Exchange (TGE) 50,000 kilogramsBrazilian Mercantile and Futures Exchange 27,000 kilograms

Corn futures at a glance

Contract: CBOT Corn FutureTicker: CPrice quotation: USD cents per bushelSettlement type: Deliverable


• Ethanol production• Crude oil prices• Regional deficits on production • Geopolitical issues• Climate outlook • El Niño effect

• Investor/speculator effect

• Pressure from Chinese demand

Corn facts

1

• Corn is the primary grain used to produce ethanol, which is made by fermenting and distilling the simple sugars in it.

• Japan is the world's largest corn importer; while producing almost no coarse grains, Japan is a very large meat producer.

• Corn is the most widely-produced feed grain in the U.S. and it is the main energy ingredient in livestock feed.

FOCUSECONOMICS Soybeans


January 2016

SoybeansSoybean prices, which had lost some ground over the course of December, recovered slightly at the beginning of January. On 15 January, soybeans traded at USD 878 cents per bushel. Prices were up 1.9% compared to the previous month and 1.7% higher year-to-date. Soybean prices declined 10.2% on an annual basis, thus continuing the broad downward trend that has been in place since the beginning of 2015.

Prices have been under pressure on concerns that the dry weather in Brazil—the world’s second-largest soybean producer—will impact production. Moreover, recently-introduced reforms in Argentina—the world’s third-largest soybean producer— are expected to put downward pressure on prices. Last month, the newly-elected government scrapped export taxes and devalued the peso, which will drive an increase in the supply of soybeans on the already saturated international market.

In the short term, prices are expected to gain some strength due to a pick-up in demand. FocusEconomics panelists expect prices to average USD 912 cents per bushel in Q4 2016. For Q4 2017, panelists expect prices to average USD 955 cents per bushel.

Annual averageIndividual forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 875 875 890 900 - - - - 890 -ANZ 930 870 860 940 1,030 970 960 1,040 - -BBVA 885 893 904 912 917 920 920 925 898 921BMI Research - - - - - - - - 975 1,050Capital Economics 856 838 833 828 828 840 863 888 838 854Commerzbank 850 875 875 900 920 - - - - -Danske Bank 875 900 925 950 - - - - 913 -DZ Bank 860 890 920 950 - - - - 905 -E2 Economia 884 893 907 922 938 952 967 980 901 959EIU 980 993 966 980 993 1,007 993 1,007 980 1,000Goldman Sachs 875 875 - 875 - - - - - -Itaú BBA 868 871 875 879 881 884 886 888 873 885Société Générale 936 953 871 - - - - - 973 1,035Summary 891 892 893 903 921 929 930 943Minimum 850 838 833 828 828 840 863 888 838 854Maximum 980 993 966 980 1,030 1,007 993 1,040 980 1,050Median 875 883 890 912 920 936 940 953 903 959Consensus 889 894 893 912 930 929 931 955 915 958

Soybeans CBOT (prices in USD cents/bu, aop) .

1m ago 31-Dec-15 1y ago862 863 9781.9% 1.7% -10.2%



8891.3%9123.9%9558.7%

Q4 16

Q4 17

Spot878

15-Jan-16

Q1 16

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD cents per bu 1,021 1,032 1,298 1,455 1,420 1,251 936 915 958 997 1,046 1,094Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD cents per bu 980 957 942 868 889 894 893 912 930 929 931 955Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD cents per bu 889 889 890 893 894 895 891 893 896 906 912 919Futures Prices (15-Jan) - 879 879 884 886 884 885 891 892 896 901 899

Soybeans prices and futures prices

Notes and sources

Soybeans spot prices in USD cent per bushel (bu). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast. Consensus Forecast of quarterly soybeans average prices and annual average prices. Futures prices traded on the Chicago Board of Trade (CBOT). Futures prices are as of spot date.

800

900

1,000

1,100


FOCUSECONOMICS Soybeans


January 2016

200,000

250,000

300,000

350,000

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Production

Consumption

2004/2005Total 48,180

thousand tons

United States14.4%

Argentina35.3%

Brazil34.8%

European Union1.8%

China9.8%

Other3.9%

2014/2015Total 77,580

thousand tons

United States6.7%

Argentina40.1%

Brazil23.7%

European Union1.1%

China23.2%

Other5.2%

Distribution by ending stocks in 2004/05 nad 2014/15

Fact Sheet


Major producers and consumers in 2014/15

United States33.5%

Brazil30.2%

Argentina19.1%

China3.9%

Paraguay2.5%

Other10.8%

China29.0%

United States18.3%

Argentina15.1%

Brazil14.4%

European Union5.0%

Other18.2%


United States25.0%

Argentina14.0%

Brazil15.6%

European Union7.5%

China19.6%

Other18.3%

Total use by country in 2004/05 and 2014/15


United States18.3%

Argentina15.1%

Brazil14.4%European

Union5.0%

China29.0%

Other18.2%

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16Production | Thousand metric tonsGlobal 263,590 240,427 268,824 283,145 318,679 321,015United States 90,610 84,291 82,791 91,389 106,878 108,354Brazil 75,300 66,500 82,000 86,700 96,200 100,000Argentina 49,000 40,100 49,300 53,500 60,800 57,000China 15,100 14,485 13,050 12,200 12,350 11,500Others 33,580 35,051 41,683 39,356 42,451 44,161Consumption | Thousand metric tonsGlobal 251,960 256,960 260,530 275,730 299,240 310,470United States 48,400 48,720 48,830 50,090 54,910 55,060Argentina 39,210 37,500 36,050 40,570 45,180 47,050European Union 13,460 13,230 13,650 14,220 14,940 15,670China 65,950 72,070 76,180 80,600 86,700 93,200



Chicago Board of Trade (CBOT) 5,000 bushelsDalian Commodity Exchange (DCE) 10,000 kilogramsTokyo Grain Exchange (TGE) 50,000 kilograms

Soybeans futures at a glance

Contract: CBOT Soybeans FutureTicker: SPrice quotation: USD cents per bushelSettlement type: Deliverable


• Emerging markets demand • El Niño effect• Demographic pressure • Crude oil prices• Weather conditions • Demand for biodiesel• Government regulation


Soybeans facts

1

• As a staple crop across many countries, soybeans are widely used in sectors ranging from food to industrial products.• Low labour cost and extensive fertile lands are behind the remarkable growth of soybean production in South America.• In 2007, the EU-27 countries combined imported 24.8 million tons of soy meal and 15.5 million tons of soybeans.

FOCUSECONOMICS Wheat


January 2016

WheatWheat prices have been relatively stable since the second half of 2015. The spot price for wheat recorded on 15 January was USD 437 cents per bushel. Prices rose 0.9% over the same day in December and were 3.9% higher on a year-to-date basis. Compared to the same day last year, prices fell 18.4%.

While prices stabilized recently, they have been on a sharp downward trend since their peak at the beginning of January 2015, mostly driven by record-high global wheat production. The impact of the large global supply has offset uncertainties related to geopolitical risks in key producers like Ukraine.

Looking forward, analysts believe that wheat prices will regain momentum and return to levels last seen at the start of 2015. FocusEconomics Consensus Forecast panelists expect prices to average USD 531 cents per bushel in Q4 2016. Prices are expected to pick up further over the course of 2017 and average USD 565 cents per bushel in Q4 2017.

Annual averageIndividual forecasts Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 2016 2017ABN AMRO 475 500 500 500 - - - - 515 -ANZ 540 520 530 540 610 590 600 610 - -BMI Research - - - - - - - - 530 540Capital Economics 458 443 438 433 435 450 470 490 443 461Commerzbank 490 503 503 517 517 - - - - -Danske Bank 510 530 540 550 - - - - 533 -DZ Bank 520 540 565 590 - - - - 554 -E2 Economia 472 479 488 498 506 514 521 527 484 517EIU 626 640 640 640 653 680 680 680 636 674Goldman Sachs 530 530 - 530 - - - - - -Itaú BBA 494 500 507 513 516 517 518 520 504 518Société Générale 498 492 496 - - - - - 489 490Summary 508 513 518 526 535 545 554 562Minimum 458 443 438 433 435 450 470 490 443 461Maximum 626 640 640 640 653 680 680 680 636 674Median 498 503 505 524 516 517 521 527 515 517Consensus 510 516 521 531 540 550 558 565 521 533Additional ForecastsIMF (Oct. 2015) 594 597 598 608 - - - - 559 562

Wheat CBOT (prices in USD cents/bu, aop) .

1m ago 31-Dec-15 1y ago433 420 5350.9% 3.9% -18.4%



51016.9%531

21.6%565

29.5%

Q4 16

Q4 17

Spot437

15-Jan-16

Q1 16

Wheat prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD cents per bu 405 540 706 749 700 578 482 521 533 542 558 574Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD cents per bu 528 503 464 435 510 516 521 531 540 550 558 565Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD cents per bu 509 510 511 514 516 518 518 521 523 528 531 534Futures Prices (15-Jan) - 474 479 485 493 507 517 523 520 - - -

Notes and sources

Wheat spot prices in USD cents per bushel (bu). All data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast. Consensus Forecast of quarterly wheat average prices and annual average prices. Futures prices traded on the Chicago Board of Trade (CBOT). Futures prices are as of spot date.

400

500

600

700


FOCUSECONOMICS Wheat


January 2016

650,000

675,000

700,000

725,000

750,000

2011/12 2012/13 2013/14 2014/15 2015/16



European Union16.6%

China25.6%

India2.7%

Russia2.6%

United States9.7%

Other42.7%


European Union6.3%

China35.0%

India8.1%Russia

3.0%

United States9.7%

Other37.9%

Fact Sheet


Major producers and consumers in 2014/15

European Union21.6%

China17.4%

India13.2%Russia

8.1%

United States7.6%

Other32.1%

European Union17.5%

China16.8%

India13.2%

Russia5.0%

United States4.5%

Other43.1% 2004/2005

Total 610,110 thousand tons

European Union18.9%

China16.7%

India11.9%Russia

6.1%

United States5.2%

Other41.1%

Distribution of proven reserves in 2004/05 and 2014/15


European Union16.8%

China16.7%

India13.4%

Russia4.9%

United States4.9%

Other43.3%

2011/12 2012/13 2013/14 2014/15 2015/16Production | Thousand metric tonsGlobal 696,057 658,702 715,107 725,122 732,984China 117,400 121,023 121,930 126,170 130,000European Union 138,182 133,949 144,428 156,466 157,274India 86,874 94,882 93,506 95,850 88,940United States 54,244 61,298 58,105 55,147 55,840Russia 56,240 37,720 52,091 59,080 60,500Others 243,117 209,830 245,047 232,409 240,430Consumption | Thousand metric tonsGlobal 697,522 679,210 698,652 707,045 717,373China 122,500 125,000 116,500 118,500 118,000European Union 127,234 119,250 117,300 123,500 126,750India 81,408 83,824 93,848 93,130 93,940



Chicago Board of Trade (CBOT) 5,000 bushelsMinneapolis Grane Exchange (MGE) 5,000 bushelsKansas City Board of Trade (KCBOT) 5,000 bushels

Wheat futures at a glance

Contract: Chicago SRW Wheat FuturesTicker: WPrice quotation: USD cents per bushelSettlement type: Deliverable


• Emerging markets demand • Strength of the U.S. dollar• Demographic pressure • El Niño effect• Weather conditions • Crude Oil prices• Government regulation • Demand for ethanol


Wheat facts

1

• The majority of wheat is used in human consumption rather than in the production of biofuels or feeding livestock.• Wheat can be divided in two major groups—spring and winter—depending on the planting and harvesting seasons.• The EU as an aggregate is the world’s largest producer of wheat, followed by China and the U.S.

Distribution by ending stocks in 2004/05 and 2014/15

FOCUSECONOMICS Cocoa & Sugar


January 2016

CocoaCocoa CBOT (prices in USD/mt, aop) .

1m ago 31-Dec-15 1y ago3,389 3,269 3,010-12.4% -9.2% -1.4%



3,2569.7%3,2068.0%3,39114.2%

2,969Spot

Q4 16

Q4 17

15-Jan-16

Q1 16

Cocoa prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD per mt 2,890 3,131 2,977 2,391 2,441 3,064 3,137 3,162 3,149 3,058 2,971 2,885Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD per mt 2,917 3,068 3,255 3,301 3,256 3,255 3,221 3,206 3,310 3,324 3,351 3,391Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD per mt 3,252 3,258 3,259 3,262 3,256 3,248 3,231 3,221 3,213 3,209 3,205 3,206Futures Prices (15-Jan) - 2,905 2,909 2,913 2,909 2,893 2,887 2,885 2,882 2,883 - -

2,750

3,000

3,250

3,500


SugarSugar ISA (prices in USD cents/lb, aop) .

1m ago 31-Dec-15 1y ago14.3 14.9 15.61.8% -2.7% -6.7%



14.1-3.0%14.3-1.4%14.4-0.9%

Q4 16

Q4 17

Spot14.5

15-Jan-16

Q1 16

Sugar prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD cents per lb 18.2 21.2 26.0 21.5 17.7 17.0 13.4 15.0 15.5 15.6 15.6 15.7Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD cents per lb 14.4 13.0 12.1 14.4 14.1 13.8 13.8 14.3 14.1 14.0 14.1 14.4Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD cents per lb 14.2 14.1 14.0 13.8 13.8 13.8 13.7 13.8 13.9 14.2 14.3 14.5Futures Prices (15-Jan) - 14.9 14.5 14.2 14.2 14.6 14.3 14.0 13.8 14.0 13.8 13.6

10

12

14

16


Cocoa prices reversed their trend at the end of 2015: while prices had increased through most of the year, they fell at the end of December and continued dropping in the fi rst weeks of 2016. On 15 January, the spot price was USD 2,969 per metric ton. Prices were down 12.4% compared to the same day in December and were 1.4% lower compared to the same day last year. Since the beginning of 2016, prices have lost 9.2% of their value.

Prices are expected to regain momentum during the course of the year. Analysts expect prices to average USD 3,206 per metric ton in Q4 2016 and to increase further to an average of USD 3,391 per metric ton in Q4 2017.

The last cane harvest exceeded market expectations in terms of total production levels as well as sugar found in cane, and the resulting oversupply drove sugar prices down. Sugar traded at USD 14.5 cents per pound on 15 January. Prices rose 1.8% compared to the same day in December, but traded 2.7% lower on a year-to-date basis. On an annual basis, sugar prices decreased 6.7%.

Analysts foresee that, despite the drier weather conditions that are forecast, supply will glut demand and prices will continue their gradual downward trend. FocusEconomics panelists project that prices will average USD 14.3 cents per pound in Q4 2016. They expect prices to continue rising in 2017 and inch up to an average of USD 14.4 cents per pound in Q4.

Cocoa & Sugar

FOCUSECONOMICS Cocoa & Sugar


January 2016

3,800,000

4,000,000

4,200,000

4,400,000

2010/11 2011/12 2012/13 2013/14 2014/15


155,000

160,000

165,000

170,000

175,000

180,000

2011/12 2012/13 2013/14 2014/15 2015/16




Côte d'Ivoire13.6%

Netherlands12.5%

United States9.8%

Germany9.8%Indonesia

7.6%

Other46.8%

Fact Sheet Cocoa

Fact Sheet Sugar

Global production and consumption | Metric tons

2000/01 2010/11 2011/12 2012/13 2013/14 2014/15Production | Metric tonsGlobal 2,851,500 4,309,000 4,095,400 3,945,200 4,370,100 4,157,700Côte d'Ivoire 1,214,000 1,511,300 1,485,900 1,449,000 1,746,200 1,750,000Ghana 395,000 1,024,600 879,300 835,500 896,900 695,700Indonesia 385,000 440,000 440,000 410,000 375,000 350,000Nigeria 180,000 240,000 245,000 238,000 248,000 210,000Brazil 162,800 199,800 220,000 185,300 228,200 230,000Grindings | Metric tonsGlobal 3,041,100 3,938,100 3,971,800 4,139,700 4,303,500 4,131,100Côte d'Ivoire 285,000 360,900 430,700 471,100 519,400 560,000Netherlands 451,900 540,000 500,000 545,000 528,500 515,500United States 444,700 401,300 386,900 429,200 446,000 406,000Germany 226,600 438,500 407,000 402,000 412,000 404,000


• Oligopolistic market• Geopolitical tensions• Global warming• Discretionary income

• Seasonality

• Environmental pressure on pollinator bee colonies• Emerging markets growing demand

Côte d'Ivoire42.1%

Ghana16.7%

Indonesia8.4%

Brazil5.5%

Nigeria5.1%

Other22.2%

Major producers and consumers in 2014/15 Factors influencing prices

India15.9%

European Union10.9%

China10.3%

Brazil6.7%United

States6.3%

Other49.8%

Global production and consumption | Thousand Metric tons

2011/12 2012/13 2013/14 2014/15 2015/16Production | Thousand metric tonsGlobal 172,371 177,624 175,558 175,103 172,146Brazil 36,150 38,600 37,800 35,950 35,000India 28,620 27,337 26,605 30,240 28,530European Union 18,320 16,655 16,020 16,750 16,100Thailand 10,235 10,024 11,333 10,790 10,800Others 79,046 85,008 83,800 81,373 81,716Consumption | Thousand metric tonsGlobal 159,599 165,626 166,522 170,825 172,768India 24,180 25,588 26,023 27,195 28,000European Union 18,200 18,250 18,500 18,700 18,800China 14,200 15,100 16,445 17,558 17,500Brazil 11,500 11,200 11,260 11,500 11,150


• Strength of Brazilian real• Geopolitical tensions• Health concerns • Pressure from substitutes• Demand for Ethanol • Weather conditions• Stock levels • Emerging markets demand

• Government intervention with subsidies and import tariffs

Brazil20.5%

India17.3%

European Union9.6%China

6.3%Thailand

6.2%

Other40.2%

Major producers and consumers in 2014 Factors influencing prices

FOCUSECONOMICS Coffee & Oats


January 2016

CoffeeCoffee Arabica (prices in USD cents/lb, aop) .

1m ago 31-Dec-15 1y ago122 128 171

-1.9% -6.7% -30.3%



13412.1%144

20.3%157

31.8%

Q4 16

Q4 17

Spot119

15-Jan-16

Q1 16

100

130

160

190


OatsOats CBOT (prices in USD cents/bu, aop) .

1m ago 31-Dec-15 1y ago228 272 314

11.4% -6.8% -19.3%



2717.0%2716.8%2716.7%

Q4 16

Q4 17

Spot254

15-Jan-16

Q1 16

Annual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD cents per bu 221 274 364 367 387 402 285 418 427 435 444 453Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD cents per bu 318 286 272 263 271 271 271 271 271 271 271 271Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD cents per bu 271 271 271 271 271 271 271 271 271 271 271 271Futures Prices (15-Jan) - 199 199 204 210 206 206 206 206 206 206 206

Oats prices and futures prices

250

275

300

325

350


Brazilian currency troubles and adverse weather conditions in Vietnam—the world’s second-largest producer—continue to put pressure on the coffee market, thus confi rming that the downward momentum will continue. Coffee traded at USD 119 cents per pound on 15 January, which was 1.9% lower than on the same day in December and down 6.7% on a year-to-date basis. Prices fell 30.3% over the same day last year. Prices are expected to reverse the trend in Q1 2016 and to gradually recover ground in the upcoming quarters. Our panel projects an average price of USD 144 cents per pound in Q4 2016. Analysts expect prices to rise in 2017 and average USD 157 cents per pound in Q4.

The downward trajectory in oats prices resumed following the increase seen a few days before Christmas that was due to holiday trading volatility. The spot price at the close of trade on 15 January was USD 254 cents per bushel. Oats prices were 11.4% higher compared to the previous month, but traded 6.8% lower on a year-to-date basis. The price was down 19.3% over the same day last year.

Prices are expected to stay broadly stable over the course of the year. FocusEconomics panelists expect prices to average USD 271 cents per bushel in Q4 2016. Panelists see prices remaining stable at an average of USD 271 cents per bushel in Q4 2017.

Coffee prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD cents per lb 115 154 248 175 122 171 132 135 146 140 138 136Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD cents per lb 149 133 123 125 134 137 143 144 149 154 156 157Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD cents per lb 133 134 134 136 137 139 142 143 144 144 144 143Futures Prices (15-Jan) - 115 117 119 121 124 126 127 129 130 132 -

Coffee & Oats

FOCUSECONOMICS Coffee & Oats


January 2016

20,000

21,000

22,000

23,000

24,000

2011/12 2012/13 2013/14 2014/15 2015/16


130,000

140,000

150,000

160,000

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16



European Union30.1%

United States16.4%Brazil

13.9%

Japan5.3%

Canada3.2%

Other31.1%

Fact Sheet Coffee

Fact Sheet Oats

Global production and consumption | Thousand 60-kg bags

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16Production | Thousand 60-kg bags Global 140,417 143,882 154,943 154,308 146,263 152,651 Brazil 54,500 49,200 57,600 56,000 51,200 52,400 Vietnam 19,415 26,000 26,500 29,833 28,167 28,600 Colombia 8,525 7,655 9,927 12,075 12,500 13,000 Indonesia 9,325 8,300 10,500 9,500 8,800 11,000 Ethiopia 6,125 6,320 6,500 6,345 6,475 6,500 Others 42,527 46,407 43,916 40,555 39,121 41,151 Consumption | Thousand 60-kg bags Global 134,535 142,384 142,476 142,762 145,973 147,684 European Union 41,350 45,250 43,270 41,405 43,875 43,900 United States 22,383 22,946 23,027 23,811 23,974 23,700 Brazil 19,420 20,025 20,110 20,210 20,330 20,580


Production | %-share in World Consumption | %-share in World • Drought in Brazil

• Quality and availability• Transportation costs • Exchange rates• Discretionary income • Health concerns

• Geopolitical tension in producing countries

• Competition between Arabica and Robusta producers

Brazil35.0%

Vietnam19.3%

Colombia8.5%

Indonesia6.0%

Ethiopia4.4%

Other26.7%


European Union34.3%

Russia23.2%

United States10.8%

Canada7.5%

Australia3.9%

Other20.3%


2011/12 2012/13 2013/14 2014/15 2015/16Production | Thousand metric tonsGlobal 22,308 21,119 23,508 22,403 22,836European Union 7,927 7,909 8,386 7,849 7,719Russia 5,332 4,027 4,932 5,267 5,000Canada 3,158 2,830 3,906 2,979 3,350Australia 1,262 1,121 1,255 1,096 1,300Others 4,629 5,232 5,029 5,212 5,467Consumption | Thousand metric tonsGlobal 22,088 21,957 23,022 22,390 22,846European Union 7,800 7,700 8,075 7,675 7,675Russia 5,000 4,300 4,900 5,200 5,100United States 2,499 2,743 2,757 2,424 2,828Canada 1,361 1,592 1,660 1,676 1,650


• Emerging markets demand • Strength of the U.S. dollar• Demographic pressure • El Niño effect• Weather conditions • Crude oil prices• Government regulation

European Union35.0%

Russia23.5%

Canada13.3%

Australia4.9%

United States4.5%

Other18.7%


FOCUSECONOMICS Cotton & Wool


January 2016

CottonCotton ICAC (prices in USD cents/lb, aop) .

1m ago 31-Dec-15 1y ago62.0 62.6 58.0-2.1% -3.1% 4.8%



64.96.8%64.15.6%67.1

10.6%

Q4 16

Q4 17

Spot60.7

15-Jan-16

Q1 16

Cotton prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020USD cents per lb 52.6 88.0 132.6 74.4 79.6 73.4 61.5 64.5 66.8 68.2 68.8 69.5Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17USD cents per lb 60.2 62.9 61.5 61.3 64.9 63.9 64.6 64.1 65.5 65.6 65.7 67.1Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16USD cents per lb 65.2 64.8 64.5 63.9 63.9 63.9 64.6 64.6 64.7 64.3 64.2 63.9Futures Prices (15-Jan) - 61.4 61.9 62.4 62.0 62.5 63.4 63.7 64.0 63.9 63.2 62.8

55

60

65

70


WoolWool AWEX EMI (prices in AUD cents/kg, aop) .

1m ago 31-Dec-15 1y ago1,250 1,265 1,054

2.6% 1.3% 21.6%



1,3102.2%

1,2920.8%

1,3344.1%

Q4 16

Q4 17

Spot1,282

15-Jan-16

Q1 16

Wool prices and futures pricesAnnual data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020AUD cents per kg 800 915 1,279 1,088 1,072 1,047 1,198 1,112 1,118 1,045 985 925Quarterly data Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17AUD cents per kg 1,079 1,236 1,241 1,234 1,310 1,303 1,296 1,292 1,291 1,305 1,320 1,334Monthly data Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16AUD cents per kg 1,312 1,310 1,308 1,305 1,303 1,300 1,298 1,296 1,294 1,292 1,291 1,291

1,000

1,100

1,200

1,300

1,400


Cotton prices rallied as a looming production defi cit drove the possibility of demand outstripping supply by around one million tons in 2016. The spot price registered on 15 January was USD 60.7 cents per pound, which was down 2.1% compared to the same day in December and down 3.1% on a year-to-date basis. Compared to the same day last year, the price was 4.8% higher.

Looking forward, declining production and rising demand should cause global stocks to fall moderately and result in a marginal increase in prices. Analysts project that prices will average USD 64.1 cents per pound in Q4 2016. In Q4 2017, panelists expect production cuts to outweigh existing stocks and see prices averaging USD 67.1 cents per pound.

Wool has been trading within a relatively tight and stable range since the second half of 2015. The stabilization is mostly due to the balanced effects of increased Chinese demand and lower cotton prices. However, the most recent auctions have indicated a renewed upward trend and wool fi nished 2015 on a strong note, which seem to have passed through to the fi rst half of January. The price of wool closed 15 January at AUD 1,282 cents per kilogram. Prices were up 2.6% over the same day in December and had risen 1.3% on a year-to-date basis. Prices were 21.6% higher than on the same day last year.

Analysts project the price to average AUD 1,292 cents per kilogram in Q4 2016 and see it picking up to AUD 1,334 cents per kilogram in Q4 2017.

Cotton & Wool

FOCUSECONOMICS Cotton & Wool


January 2016

Production | %-share in World


China29.9%

India22.2%Pakistan

9.6%

Turkey5.8%

Bangladesh5.0%

Other27.5%

Fact Sheet Cotton

Fact Sheet Wool

22,000

24,000

26,000

28,000

2011/12 2012/13 2013/14 2014/15 2015/16

Production

Consumption


2011/12 2012/13 2013/14 2014/15 2015/16Production | Thousand metric tonsGlobal 27,743 26,971 26,216 25,934 22,580India 6,314 6,205 6,750 6,423 6,205China 7,403 7,620 7,131 6,532 5,291United States 3,391 3,770 2,811 3,553 2,837Pakistan 2,308 2,025 2,068 2,308 1,742Others 8,327 7,351 7,456 7,118 6,505Consumption | Thousand metric tonsGlobal 22,666 23,598 23,939 24,032 24,252China 8,274 7,838 7,512 7,185 7,076India 4,235 4,736 5,062 5,334 5,508Pakistan 2,177 2,341 2,264 2,308 2,199Turkey 1,219 1,317 1,372 1,393 1,393


• Seasonal growing conditions

• Demand for cottonseed• U.S. Federal subsidies • Strength of the U.S. dollar• Emerging markets demand • Global stocks

• Prices of competing crops used for biofuels• Demand for synthetic fibers,

mainly Nylon and Acetate

China25.2%

India24.8%United

States13.7%

Pakistan8.9%

Brazil5.9%

Other21.6%


2,000,000

2,040,000

2,080,000

2,120,000

2,160,000

2008 2009 2010 2011 2012 2013

Production

Global production | Metric tons

2008 2009 2010 2011 2012 2013Production | Metric tonsGlobal 2,091,810 2,065,574 2,020,033 2,089,519 2,093,605 2,126,898Argentina 65,000 65,000 54,000 48,000 45,000 45,000Australia 407,880 370,600 352,740 368,330 362,100 360,520China 367,687 364,002 386,768 443,981 437,119 471,111Iran 73,700 74,655 60,000 61,000 61,500 61,500India 42,901 43,224 42,991 44,700 46,100 46,500Morocco 53,449 55,029 55,300 55,500 56,000 56,000New Zealand 157,500 185,800 176,300 163,700 165,000 165,000Russia 53,491 54,658 53,521 52,575 55,253 54,651Sudan (former) 53,098 54,668 55,000 55,000 56,000 56,000UK 63,290 65,393 67,000 67,500 68,000 68,000Others 753,814 732,545 716,413 729,233 741,533 742,616

Global production

• Available stocks• Quantity and quality on offer

• Exchange rates

• Discretionary income

• Consumer preferences and fashon trends

• Demand for synthetic and cotton fiber • Emerging markets demand

China22.2%

Australia17.0%

New Zealand

7.8%United Kingdom

3.2%

Iran2.9%

Other47.1%

Major producers in 2014 Factors influencing prices

FOCUSECONOMICS


January 2016

Notes and Statements

DISCLOSURE STATEMENT

The FocusEconomics Consensus Forecast (“Forecast”) is based on information obtained from sources believed to be reliable. FocusEconomics and the participating panelists (“Information Providers”) do not guarantee that the information supplied in the Forecast is accurate, complete or timely. The Information Providers do not make any warranties with regard to the results obtained from the Forecast. The Information Providers are not responsible for any errors or omissions, or for any injuries or damages resulting from the use of this information, including incidental and consequential damages. Recipients should not regard the Forecast as a substitute for the exercise of their own judgement. The recommendations made in the Forecast may be unsuitable for investors depending on their specific investment objectives and financial position. The Forecast has been prepared solely for informational purposes and is not a solicitation of any transaction or an offer to enter into any transaction. Any opinions expressed in this report are subject to change without notice and the Information Providers are under no obligation to update the information contained herein.

PUBLICATION NOTE Consensus Forecasts are mean averages of projections of economic forecasters surveyed by FocusEconomics for our monthly publication. Quarterly averages may not correspond to the annual figures due to different forecast panels. Monthly forecasts are interpolated values based on quarterly averages.

The production-weighted averages for the FocusEconomics Global Commodity Index and Energy, Base Metals, Precious Metals and Agricultural Indices refer to commodities surveyed by FocusEconomics on a monthly basis, and include the following commodities:

Energy (9 commodities): Brent Crude Oil, WTI Crude Oil, Natural Gas, Thermal Coal, Coking Coal, Uranium U308, Ethanol, Gasoil and Gasoline. Base Metals (11 commodities): Aluminium, Alumina, Aluminium Alloy, Copper, Lead, Nickel, Tin, Zinc, Iron Ore, Steel (USA) and Steel (Europe)Precious Metals (4 commodities): Gold, Silver, Palladium, Platinum. Agricultural (9 commodities): Corn, Soybeans, Wheat, Cocoa, Sugar, Coffee, Oats, Cotton and Wool.

Weights are based on global production volumes and reflect the latest forecasts on production and market prices.

COPYRIGHT NOTE © Copyright 2016 FocusEconomics S.L. Duplication, reproduction, transmission, publication or redistribution in any form or by any means electronic, mechanical, or otherwise without prior written consent of FocusEconomics S.L. is strictly prohibited. Please cite source when quoting. All rights reserved under International Copyright Conventions.

The FocusEconomics Consensus Forecast Commodities is a monthly publication of FocusEconomics. Communications to the Editor or FocusEconomics in general should be addressed as follows:

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