World commodity prices 2004 - 2005 AIECE Spring Meeting Kiel, May 6 2004.

World commodity prices2004 - 2005

AIECE Spring Meeting

Kiel, May 6 2004

AIECE Commodity Report - May 2004 2

Commodity markets are thriving and prices are soaring…

HWWA composite price index (in USD terms): energy*

40

50

60

70

80

90

100

110

120

130

jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04Source : HWWA

2000 = 100

* coal + crude oil


HWWA composite price index (in USD terms): industry*

80

85

90

95

100

105

110

115

120

125

130


2000 = 100

* agricultural raw materials + ferrous & non-ferrous metals


HWWA composite price index (in USD terms): foodstuffs*

85

95

105

115

125

135

145


2000 = 100

* cereals + oilseeds & vegetable oil + tropical beverages + sugar


…as activity and trade recover


Latest market developments

Surge in raw materials prices… HWWA overall index up 72% between December 2001 (latest trough) and April 2004 Industrial commodities and foodstuffs have surged more than energy prices

…due to the Chinese “heat wave”… China, the world’s workshop, was in 2003 the world’s largest consumer of

coal, absorbing 40% of total world productionsteel and nickel, absorbing 25% of total world production aluminium, absorbing 19% of total world production

as natural resources become scarcer or uncompetitive in China

…highlighting capacity constraints worldwide Lack of investment in basic industries: overinvestment in ICT to the expense of basic

industries Prices of raw materials were until recently quite low on an historical perspective, too

low to boost investment


Where China mattersExample of coal prices

Coal ARA (Amsterdam, Rotterdam, Antwerp)

24

29

34

39

44

49

54

59

64

69

74

jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04

Source : Datastream

$ per tonne


Where China mattersExample of nickel prices

Nickel: prices and stocks on the LME

3500

5500

7500

9500

11500

13500

15500

jan-99 may sep jan-00 may sep jan-01 may sep jan-02 may sep jan-03 may sep jan-04Source: LME

0

10000

20000

30000

40000

50000

60000

70000$ per tonne stocks: metric tonne


Prices of raw industrial materials on a longer term perspective

60

70

80

90

100

110

120

130

140

91.Q1 92.Q1 93.Q1 94.Q1 95.Q1 96.Q1 97.Q1 98.Q1 99.Q1 00.Q1 01.Q1 02.Q1 03.Q1 04.Q1Source : HWWA

2000 = 100

HWWA composite price index: industry*

* agricultural raw materials + ferrous & non-ferrous metals

in USD

in euros


AIECE Commodity Group forecasts

Factors which could push raw material prices down In Europe: strong euro Seasonnal factors (agricultural commodities)

Factors sustaining raw material prices Strong growth expected in industrial demand in Asia, with China more and more

decisive for prices Supply deficit even on markets believed to be structurally in excess supply

(steel for example) Investment from pension funds away from bourses to commodity markets

(speculation on the London Metal Exchange)

The environment for European raw materials purchasers has deteriorated sensibly, despite a strong euro; no significant downturn is expected in

prices before 2006.



HWWA overall composite price index

50

60

70

80

90

100

110

120

130

93.Q1 94.Q1 95.Q1 96.Q1 97.Q1 98.Q1 99.Q1 00.Q1 01.Q1 02.Q1 03.Q1 04.Q1 05.Q1

Sources : HWWA / AIECE forecasts

2000 = 100

in USD

in euros



Aggregate price developments 2002-2005

HWWA commodity indices in US$ termsIndex values 2000=100 and % change

All commodities 90 103 119 116 1 14 15 -3

Total excl. energy 93 106 132 129 3 14 25 -2

Food total 104 112 140 134 12 8 25 -4

Industrial raw materials 88 103 128 126 -1 17 25 -2

Agricultural raw materials 85 104 118 121 -1 22 14 2

Non-ferrous metals 85 95 131 122 -4 12 38 -7

Ferrous raw materials 102 120 151 153 3 18 26 1

Energy raw materials 89 102 112 109 -1 14 10 -3

Crude oil 88 101 107 105 1 15 5 -2

Source: AIECE Commodity group

2003 2004 20052002



Aggregate price developments 2002-2005

HWWA commodity indices in Euros termsIndex values 2000=100 and % change

All commodities 88 84 88 86 -5 -4 5 -3

Total excl. energy 90 86 97 95 -3 -5 13 -2

Food total 101 92 103 99 6 -9 13 -4

Industrial raw materials 86 84 95 93 -6 -2 13 -2

Agricultural raw materials 83 85 87 90 -6 2 3 2

Non-ferrous metals 83 77 97 90 -9 -7 26 -7

Ferrous raw materials 100 98 111 113 -3 -1 14 1

Energy raw materials 86 83 83 81 -6 -4 0 -3

Crude oil 85 83 79 77 -4 -3 -4 -2

Source: AIECE Commodity group

2003 2004 20052002


AIECE Commodity Group forecastsAggregate prices


AIECE Commodity Group forecastsEnergy prices


AIECE Commodity Group forecastsNon-ferrous metals prices


AIECE Commodity Group forecastsFerrous metals prices


AIECE Commodity Group forecastsAgricultural prices


AIECE Commodity Group forecastsFood and beverages prices

World commodity prices2004 - 2005

AIECE Spring Meeting

Kiel, May 6 2004

World commodity prices 2004 - 2005 AIECE Spring Meeting Kiel, May 6 2004.

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