China and its impact on global commodity markets.

1. 0
Past Performance Is Not Necessarily Indicative Of Future Results.
McVEAN
Trading & Investments, LLC
CHINA’S INFLUENCE ON
GLOBAL COMMODITY PRICES
September 27, 2017
Michael Drury
Chief Economist
McVean Trading and Investments, LLC
AIPRO
LITTLE ROCK, AR

2. 2017 GLOBAL GDP
$78.0 TRILLION
1Past Performance Is Not Necessarily Indicative Of Future Results.
EUROPE
$17.9T
EUROZONE
$11.7T
NAFTA
$22.0T
US
$19.4T
JAPAN+SOUTH
KOREA+TAIWAN
$6.9T
OPEC+
BRAZIL+
AUSTRALIA+
RUSSIA+
ARGENTINA
$8.7T
CHINA
$11.8T
OTHER
$10.7T
Source: IMF

3. CHINA CORRELATES THEIR POLLUTION
PROBLEM WITH CLIMATE CHANGE
2Past Performance Is Not Necessarily Indicative Of Future Results.

4. TENS OF MILLIONS HAVE
DIED IN FLOODS
3Past Performance Is Not Necessarily Indicative Of Future Results.

5. REPLACING COAL FOR ELECTRICITY
IS NECESSARY AND URGENT
4Past Performance Is Not Necessarily Indicative Of Future Results.
Source: NBS
895
320
131
66 43 27 39
48
12
18
4 34 7 2
0
200
400
600
800
1000
Coal Hydro Wind Gas Solar Nuclear Other
CHINA ENERGY CAPACITY
GIGAWATTS INSTALLED
2015 CAPACITY 2016 ADDITION

6. GAS IS ONE ANSWER
5Past Performance Is Not Necessarily Indicative Of Future Results.
Source: FORBES

7. MOST GAS IS FOR INDUSTRY
6Past Performance Is Not Necessarily Indicative Of Future Results.
Source: Clarkson Resources
Other
21%
Manufacturing
42%
Electricity
18%
Household
13%

8. AUTOS ARE THE KEY DRIVER FOR OIL
7Past Performance Is Not Necessarily Indicative Of Future Results.
Source: NBS
4
8
12
16
20
24
28
32
1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017
CHINESE MOTOR VEHICLE SALES
MILLIONS OF UNITS AT AN ANNUAL RATE

9. GASOLINE DEMAND AVERAGES 8.5% GROWTH
8Past Performance Is Not Necessarily Indicative Of Future Results.
Source: NBS
-2.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
15.0%
17.5%
1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017
CHINESE GASOLINE CONSUMPTION
BARRELS - 3 MO AVG % CH FROM YR AGO 3 MO AVG

10. STEADY 5% GROWTH IN CRUDE OIL USE
9Past Performance Is Not Necessarily Indicative Of Future Results.
Source: IEA
5.3
6.3 6.4
6.9
7.2 7.4
7.6
8.6
9.0
9.6
9.9
10.3
11.0
11.3
5.0
7.5
10.0
12.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
CHINESE OIL CONSUMPTION
MILLIONS OF BARRELS PER DAY

11. DOMESTIC CRUDE OIL OUTPUT FALLING
10Past Performance Is Not Necessarily Indicative Of Future Results.

12. CHINA LEADERSHIP SHUFFLE:
IS IT A DONE DEAL?
Provincial
Governor or Mayor
Provincial Party
Secretary
Pre-Xi 2 5
Pre-2016 3 3
2016 16 14
2017 9 9
Vacant 1 0
31 31
11Past Performance Is Not Necessarily Indicative Of Future Results.

13. CHINESE POLITBURO
STANDING COMMITTEE
Xi Jinping 1953
Li Keqiang 1955
Wang Qishan 1948
Li Zhanshu 1950
Wang Huning 1955
Wang Yang 1955
Zhao Leji 1957
Han Zheng 1954
Hu Chunhua 1963
Chen Min’er 1963
12
Past Performance Is Not Necessarily Indicative Of Future Results.

14. YUAN PER US DOLLAR
(INVERTED SCALE)
13Past Performance Is Not Necessarily Indicative Of Future Results.
6
6.2
6.4
6.6
6.8
7
7.2
7.4
7.6
7.8
8
8.2
1/6/2006 1/6/2007 1/6/2008 1/6/2009 1/6/2010 1/6/2011 1/6/2012 1/6/2013 1/6/2014 1/6/2015 1/6/2016 1/6/2017

15. CHINA NOMINAL GDP GROWTH IN US$
CURRENT QUARTER % CHANGE FROM YEAR AGO
14Past Performance Is Not Necessarily Indicative Of Future Results.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

16. CORN VS COPPER
15Past Performance Is Not Necessarily Indicative Of Future Results.
50
100
150
200
250
300
350
400
450
500
150
250
350
450
550
650
750
850
Corn Copper

17. CRUDE OIL
MONTHLY
16Past Performance Is Not Necessarily Indicative Of Future Results.
20
40
60
80
100
120
140
Jan-02 Jan-05 Jan-08 Jan-11 Jan-14 Jan-17

18. CHINESE $ IMPORTS VS FX RESERVES
BILLIONS OF DOLLARS
17Past Performance Is Not Necessarily Indicative Of Future Results.
500
1000
1500
2000
2500
3000
3500
4000
4500
250
450
650
850
1050
1250
1450
1650
1850
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
IMPORTS (6 MO AVG) FX RESERVES

19. AVERAGE PRICE FOR NEW RESIDENTIAL
BUILDINGS IN CHINA
% CHANGE FROM YEAR AGO
18Past Performance Is Not Necessarily Indicative Of Future Results.
-7.5
-5
-2.5
0
2.5
5
7.5
10
12.5
15
1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017
%
X

20. CHINA SOCIAL FINANCING
12 MONTH AVERAGE
19Past Performance Is Not Necessarily Indicative Of Future Results.
250
500
750
1000
1250
1500
1750
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

21. 47
48
49
50
51
52
53
54
55
12/1/2014 3/1/2015 6/1/2015 9/1/2015 12/1/2015 3/1/2016 6/1/2016 9/1/2016 12/1/2016 3/1/2017 6/1/2017
MANUFACTURING SERVICES
CHINA MARKIT PMI: MANUFACTURING VS SERVICES
20Past Performance Is Not Necessarily Indicative Of Future Results.

22. US, EUROPE, JAPAN PMI
3 MONTH AVERAGE
21Past Performance Is Not Necessarily Indicative Of Future Results.
-10.00
5.00
20.00
35.00
50.00
65.00
80.00
30
35
40
45
50
55
60
1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017
Eurozone US JAPAN (RS)

23. CHINESE NOMINAL GROWTH VS PPI
PERCENT CHANGE FROM A YEAR AGO
22Past Performance Is Not Necessarily Indicative Of Future Results.
-2.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
15.0%
17.5%
20.0%
22.5%
25.0%
27.5%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
PPI NOMINAL GDP

24. CHINA PPI VS DEFLATOR
3 MO AVERAGE %CHANGE FROM YEAR AGO
23
Past Performance Is Not Necessarily Indicative Of Future Results.
-2.50%
0.00%
2.50%
5.00%
7.50%
10.00%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
PPI DEFLATOR

25. CHINA GDP GROWTH
CURRENT QUARTER %CH FROM YEAR AGO
24Past Performance Is Not Necessarily Indicative Of Future Results.
Q2 2017
-5.0
0.0
5.0
10.0
15.0
5.0
7.5
10.0
12.5
15.0
Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
REAL GDP (LHS) GDP DEFLATOR (RHS)

26. 0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17
PRIMARY & SECONDARY TERTIARY
CHINESE NOMINAL GDP BY SECTOR
3 MONTH AVERAGE % CHANGE FROM YEAR AGO
25Past Performance Is Not Necessarily Indicative Of Future Results.

27. CHINESE RAILROAD FREIGHT VS ELECTRICITY PRODUCTION
3 MONTH AVERAGE % CHANGE FROM YEAR AGO 3 MONTH AVERAGE
26Past Performance Is Not Necessarily Indicative Of Future Results.
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
RAIL ELECTRICITY PRODUCTION

28. BALTIC DRY FREIGHT INDEX
27Past Performance Is Not Necessarily Indicative Of Future Results.
0
500
1000
1500
2000
2500
1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017

29. -33.0%
-16.5%
0.0%
16.5%
33.0%
49.5%
66.0%
EXPORTS IMPORTS
CHINA EXPORTS VS IMPORTS
3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO
28Past Performance Is Not Necessarily Indicative Of Future Results.