Christoph Eibl: Outlook for commodity prices (Day 1 - Session 1: Strategic metals and the clean-tech revolution)
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Christoph Eibl: Outlook for commodity prices (Day 1 - Session 1: Strategic metals and the clean-tech revolution)

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Day 1 - Session 1: Strategic metals and the clean-tech revolution...

Day 1 - Session 1: Strategic metals and the clean-tech revolution

Outlook for commodity prices

Objective Capital Global Mining Investment Conference 2010
Stationers' Hall, City of London
28-29 September 2010
Speaker:
Christoph Eibl - Tiberius Asset Management

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  • Z:Tiberius_ServicesResearchModelleINDEXTiberius Commodity Beta-Timing (Leading Indicators).xlsxEngl. aktualisieren
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Christoph Eibl: Outlook for commodity prices (Day 1 - Session 1: Strategic metals and the clean-tech revolution) Presentation Transcript

  • 1. day 1 - session 2: SPECIALITY METALS
    Outlook for commodity prices
    ChristophEibl– Managing Partner,Tiberius Asset Management
  • 2. GLOBAL MININGINVESTMENT CONFERENCE 2010
    Lead sponsors:
    Media partners:
    Other sponsors & participating organisations:
  • 3. CommoditiesMarket Outlook
    Global Mining Investment Conference
    2010
  • 4. I. Tiberius Group
    Introduction
    Tiberius Group
    • A Swiss firm specialized in commodity management, with its headquarters in Zug as well asoffices in Geneva and Stuttgart.
    • 5. Expertise in fixed-income management on the basis of institutional funds.
    • 6. 33 employees with wide-ranging experience in commodity trading, portfolio management and research.
    • 7. A model-supported, quantitative investment philosophy with a structured and transparent investment process.
    • 8. The firm’s core competence lies in the active management of long- only and long/shortportfolios.
    • 9. Total assets currently under management by the Tiberius Group: 2.2 billion USD
    • 10. Tiberius is regulated by FINMA (Swiss Banking Supervisory Authority)
    4
  • 11. Tiberius Leading Indicator Index - despite slight decline at a very high level
    5
    Market Outlook
    Cyclical trend
  • 12. Market Outlook
    Evaluation of forward curves
    Forward curves have improved steadily since Q2 2009
    6
  • 13. Speculative sentiment has improved again
    7
    Market Outlook
    Short term capital flows
  • 14. Continued buying interest of institutional market participants
    8
    Market Outlook
    Long term capital flows
  • 15. Market Outlook
    Conclusion
    9
    The Lights for commodity investments mainly give positive signals
    1. Ecomomic Cycle- Uptrend in industrial production is intact
    2. Forward Curves- Gradual improvement
    3. Spot Price Level- After correction many markets at attractive entry level
    4. Short Term Speculative Capital Flows- Sentiment has turned especially in the agricultural sector
    5. Long Term Insitutional Capital Flows- Sustained Interest in Commodities
    6. Market Technicals- Lately first technical buy signals
    Conclusion: Outlook has recently improved significantly
  • 16. Our yearend forecast is still the same
    10
    Market Outlook
    Long term market analysis
  • 17. Market Outlook
    Crude oil
    Cruide Oil globally attractive; in the US, especially in Cushing, still high excess inventories
    11
  • 18. Market Outlook
    Crude Oil
    Despite constant demand high increasing excess inventories
    12
  • 19. Market Outlook
    Gasoline
    US Gasoline consumption is now at the level of 2008
    13
  • 20. Market Outlook
    Natural Gas
    Enhanced storage capacity and high short-exposure argue against a price decline;
    like in 2009 sudden price reversal is expected in 2010
    14
  • 21. Market Outlook
    Distillates
    US distillate consumption is disappointing given the economic upswing
    15
  • 22. Market Outlook
    Industrial Metals
    High correlation of industrialmetalsbased on a constant demand;
    average of the six at the LME trated metals approximantely +0.69 in 2010
    16
  • 23. Market Outlook
    Base Metals
    Rolling correlation of base metals and stock market currently near top
    17
  • 24. Market Outlook
    Base Metals
    Tin and copper - the only base metals showing market deficit in 2011
    18
  • 25. Market Outlook
    Copper
    Structural deficit of copper since turn of the millennium
    19
  • 26. Market Outlook
    Precious metal
    Price ratio between platinum and palladium again on a long-term average
    20
  • 27. Market Outlook
    Gold
    Gold benefited by the end of Q2 2010 from excessive risk aversion
    21
  • 28. Market Outlook
    Gold
    The original selling points for gold have disappeared
    In the year of 2000
    Gold market in comparison
    In the year of 2010
    1. Physical market balance
    High surplus
    Market deficit
    2. Strategic positions
    30% of production hedged
    Mines are unhedged
    Extreme net-long
    3. Spekulative positions
    Net-short
    Excessively positive
    4. Sentiment/Market penetration
    Extremely negative
    Too high
    5. Relative Value (CPI, Commod.)
    Too low
    6. Macro-environment
    - Inflation risks
    Low/middle
    Low/middle
    - Deflation/systemic-risk
    Middle
    High
    22
  • 29. Market Outlook
    Gold
    Seasonal tendence of gold purchase at the futures market and ETFs in the last years
    23
  • 30. Market Outlook
    Softs
    Increasing Net-Long volume of the Non-Commercials in grain sector
    24
  • 31. Market Outlook
    Wheat
    Significant production losses compared to previous year caused by extreme weather events
    25
    USDA: expected declines in wheat production and exports
    in million tonnes
    Exports
    Production
  • 32. Market Outlook
    Wheat
    Wheat stocks are still well above critically low level of 2007/08
    26
  • 33. Market Outlook
    Soybeans/ Corn
    Expected decline in the spread soybean vs. corn
    27
    Soybeans vs. CornDifference nearby-contracts in US cents per bushel
    • Substitution of wheat by corn as
    animal feed
    • Expected acreage shift in the U.S.: Growth of double-cropping (wheat followed by soybeans)
    • 34. Potential for higher U.S. corn exports
    • 35. Global corn market tighter than
    soybeans
  • 36. Market Outlook
    Cotton
    Continuous improvement of the fundamental data due to rising demand
    28
  • 37. 29
    Market Outlook
    Conclusion
    Metals will stay in contango in the course of the next 12 months
    Backwardation
    Contango
    Market surplus
    High inventories
    Market deficit
    Low inventories
  • 38. Contact
    Tiberius Asset Management AG
    Baarerstr. 53
    CH-6300 Zug
    Schweiz
    +41 41 560 00 81 (Phone)
    +41 41 560 00 82 (Fax)
    info@tiberiusgroup.com
    www.tiberiusgroup.com
  • 39.
  • 40. GLOBAL MININGINVESTMENT CONFERENCE 2010
    Lead sponsors:
    Media partners:
    Other sponsors & participating organisations: