ocbc commodities 2h18 outlook...2 • gold prices faded lower despite the uptick in risk aversion...

OCBC Commodities 2H18 Outlook:

Price rallies dissipated… What now? 26th June 2018

Barnabas Gan

Economist

Treasury Research & Strategy

1

2

• Gold prices faded lower despite the uptick in risk aversion into June, highlighting

gold’s disfavor with investors as a safe haven asset to-date. Since the start of 2018, gold

prices declined from its $1,300/oz handle to as low as $1,278.5/oz in mid-June.

• The yellow metal’s 60-day correlation with the greenback tuned stronger into May to

as strong as -0.77, suggesting that much of gold’s movement has been predicated by

dollar trend.

• Fundamentally, the relatively rosier US-centric economic indicators have supported

dollar strength, led by strong job gains, lower unemployment levels, higher household

spending and business fixed investment. Elsewhere, the surprisingly dovish central bank

rhetoric by the ECB and BOJ also gave the greenback further strength into June.

• Paper demand however, remains strong into end-June. Gold ETF holdings continue to

climb even as gold prices tumble, suggesting that investors’ need to diversify given

ongoing uncertainties can still be seen. Physical demand however, remains lacklustre.

• Inflation risks remain muted into end of 1H18, despite the higher oil prices seen to-

date. US-centric inflation expectations seen from the 5Y and 10Y TIPS suggest that CPI

pressures remains tame. This is seen to be trending in line with gold prices to-date.

• We downgrade our gold outlook at $1,300/oz at end-year. While a firmer dollar story

into 3Q18 could potentially keep gold bulls at bay, some unwinding of dollar strength in

4Q18 will likely give gold the necessary boost to our year-end target.

Gold: In disfavor with investors

3

Gold prices will depend on key correlation patterns

Source: Bloomberg, CEIC, OCBC Bank

-1-0.8-0.6-0.4-0.200.20.40.60.8

-0.8-0.6-0.4-0.20.00.20.40.60.81.0

01

-Jan

-17

01

-Fe

b-1

7

01

-Mar

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01

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r-1

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01

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01

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b-1

8

01

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r-1

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-18

01

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n-1

8

Correlation behaves in an orderly fashion into 1H18

30d VIX and Gold Correlation USD - Gold 30d Correlation (RHS)

• Gold prices have remained “well-behaved” based on correlation patterns. Gold-DXY 30-

day correlation sustained near close to -1.0 into end-June, while VIX-Gold correlation

remained in positive zone.

• Conventional wisdom indicates that a dearer greenback will depress gold prices, given

gold being a dollar-denominated asset. Sustained negative correlation with the greenback

suggest that dollar movement will likely persuade gold’s behavior into 2H18.

• The VIX index, on the other hand, has picked up modestly to-date. More commonly known

as the ‘fear index’, the uptick in the VIX suggest market concerns over the brewing US-

Sino trade tensions.

88

90

92

94

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100

102

1041000

1050

1100

1150

1200

1250

1300

1350

1400

1450

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

(In

vert

ed

)

$/o

z

Gold-DXY correlation remains water-tight

Gold Futures US Dollar Index (RHS-Inverted)

4

Dollar movement to persuade gold into 3Q18 1. US-centric economic indicators continue to print in a rosy fashion. Job gains have

been strong and unemployment rate has declined. Household spending has picked up

while business fixed investment has continued to grow strongly.

2. More rate hikes incoming: The recent FOMC dot-plot in June now points to four rate

hikes into 2018, up from three hikes in its March’s report. Since 2015, the US Federal

Reserve has hiked rates seven times in all (from 0.25% to 2.0%).

3. Surprisingly dovish central bank rhetoric by the European Central Bank and the Bank

of Japan.

4. Trade tariffs serves to narrow US trade deficit, which in theory should rally the

greenback.

5. Safe haven demand? The dollar has been traditionally a safe haven asset, and could be

re-positioned as such especially if risk events and uncertainties continue to brew into the

backdrop.

5

June’s FOMC dot-plot chart signals four rate hikes

Source: FOMC

• The FOMC committee’s recent dot-plot chart signals a total of four rate hikes into 2018,

and three more into 2019.

• Expectations for higher US-centric rates, amid recent dovish rhetoric by ECB and BOJ

will likely dull gold’s luster as a store of value, given a relatively dearer greenback.

6

Recent pick-up in ETF demand… but?

Source: Bloomberg, OCBC Bank

70

120

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r-1

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7

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-17

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-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Tho

usa

nd

s

Net-long speculative interest in gold declined as dollar gained favor

Net Non-Commercial Combined Positions (RHS)

Gold (USD/t oz.)

• ETF demand continues to climb into June despite lower gold prices. Global ETF

holdings into mid-June clocked 70.7 million troy ounces, up from 66.3 million troy

ounces during the same period in 2017. The sustained demand for ETF exposure

suggest investors’ need for diversification especially during uncertainties seen to-date.

• Money-managers on the other hand, focused largely on a stronger dollar seen since

mid-April, and reduced speculative holdings in gold options and futures. Over a four-

week moving average, speculative net-long positions in gold has fallen to its lowest

since July 2017, a time when global economic fundamentals were showing clear signs

of broad-based recovery and optimism.

40

45

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10001050110011501200125013001350140014501500

Jul-

13

No

v-1

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-14

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No

v-1

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Mar

-15

Jul-

15

No

v-1

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Mar

-16

Jul-

16

No

v-1

6

Mar

-17

Jul-

17

No

v-1

7

Mar

-18

Mill

ion

s

$/o

z

Gold ETF demand continue to point north despite lower gold prices

Total Known ETF Holdings (RHS) Gold Futures

7

Physical gold demand remains lackluster

Source: World Gold Council, Bloomberg, OCBC Bank

• The World Gold Council reports that overall gold demand of 973.5 tonnes in

1Q18 was the lowest Q1 print since 2008, led by a sharp downturn in Indian jewelry

demand (-12% y/y), while China’s bar and coin demand fell by an alarming 26% y/y

over the same period.

• Central bank demand buoyed demand at +42% y/y, the highest 1Q growth since

2014. The higher demand was led by buying seen in Russia, Turkey and Kazakhstan.

• Industrial demand rose by a tepid 4.0% in 1Q, though the positive print does also

suggest the healthy demand in industrial products especially in the wireless and

memory sectors.

-60%

-40%

-20%

0%

20%

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80%

0

20

40

60

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140

Jan

-15

Ap

r-1

5

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15

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-15

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-16

Ap

r-1

6

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16

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-16

Jan

-17

Ap

r-1

7

Jul-

17

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-17

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Ap

r-1

8

kg t

ho

usa

nd

China gold import

HK Gold exports to China (kg) Growth (%)

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0%

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0

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-16

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Ap

r-1

7

Jul-

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Oct

-17

Jan

-18

Ap

r-1

8

ton

ne

s

India gold import

Gold Imports (Tonnes) Growth (%)

8

Tame inflationary pressures to keep gold at bay

• There remains little inflation risk to-date

despite stronger oil prices. Across key

economies, recent inflation prints remains

in-line with official targets.

• Tame inflationary pressures in past years

suggest that the yellow metal hasn’t been

regarded as an inflation-hedge.

• Gold prices appear to be in a sweet spot

given real interest rates levels across G7

and APXJ.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

US Euro Area Japan China S. Korea Vietnam

Inflation risk remains muted-neutral for now

CPI Official Target

1,000

1,050

1,100

1,150

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1,350

1.1

1.3

1.5

1.7

1.9

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2.3

Jan

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-16

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-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

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-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

%

No trigger for higher gold prices for nowUS 10Y expectations in line with gold prices

US 10Y expected inflation Gold Futures (RHS)

$1,000

$1,200

$1,400

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

2.2%

2.4%

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

US5Y breakeven appears tame around its 2.0% handle

US 5Y Breakeven Gold Futures (RHS)


9

Gold in a sweet spot for now


600

800

1,000

1,200

1,400

1,600

1,800-4

-3

-2

-1

0

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0

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p-1

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Ma

y-1

5

Ma

r-1

6

Ja

n-1

7

No

v-1

7

$/o

z

G7 Asia Pacific (ex-Japan) Gold Futures (RHS)

Negative r

eal

inte

rest

rate

sP

ositiv

e r

eal

inte

rest

rate

s

10

• Oil prices saw a knee-jerk reaction in late June, as investors reacted to a

seemingly lower-than-expected rise in OPEC’s production hike. According to the

OPEC meeting notes on Friday, it stated that countries “will strive to adhere to the overall

conformity level, voluntarily adjusted to 100%, as of 1 July 2018”. Anonymous sources

who are reported to be familiar with the deal’s technical aspects hint that production

gains translates into about 600,000 bpd for now.

• Oil prices may continue to dip further into the months ahead, following OPEC’s

decision to raise production into 2H18. Still, note that the proposed rise in production is

considered to be small, given a total of 2.4 million bpd of production cut seen since 2016.

Information regarding who and by how much the production hikes may affect remains to

be an unknown at this juncture.

• Further upside risk in US-led oil production cannot be ruled out. US crude oil

production rose to new record highs of 10.9 million barrels (+16.6% y/y) as of 15th June

2018. Oil-rig counts continue to gain as well into end 1H18, a leading indicator that US-

led production will likely grow further into 2018.

• Note that global fundamentals indicate that supplies have surpassed demand seen

since March 2018, and any exacerbation of the supply glut may persuade oil prices

lower. Accounting for further upside risk in oil production into 2H18 given potentially

higher US and OPEC supply, we continue to see lower WTI and Brent prices into the

second half to touch $65/bbl and $70/bbl, respectively.

Crude Oil: Look out for higher supplies

11

Chart of the month: Back in oversupply territories


96.5

97.0

97.5

98.0

98.5

99.0

99.5

100.0Ju

l-1

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Sep

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c-1

7

Jan

-18

Feb

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Mar

-18

Ap

r-1

8

mill

ion

bp

d

Global supply surpassed demand for the second month

Global Oil Product Supply Global Oil Product Demand

12

Production update: OPEC to raise production


60

.1%

58

.0%

61

.3%

64

.7%

71

.5%

63

.3%

72

.6%

86

.4%

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%

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%

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%

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%

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9.2

%

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%

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%

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%

16

8.6

%

-2600-2400-2200-2000-1800-1600-1400-1200-1000-800

0%

30%

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Jan

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-18

Feb

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Ap

r-1

8

May

-18 th

ou

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d b

arre

ls p

er

day

OPEC's compliance levels remains high into May 2018

Compliance Rate Production cut from reference levels (RHS)

0

500

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Jan

-17

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r-1

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7

Jan

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-18

Mar

-18

Ap

r-1

8

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-18

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tho

usa

nd

bar

rels

pe

r d

ay

US oil production: Volume change since Jan 2017

+1.99 million barrels per day

• OPEC has been complying with production cuts as per the implication of the Algiers

Accord to reduce production by around 1.2 million barrels per day (bpd). Since May

2018, total production cut in OPEC alone measured 2.4 million bpd.

• Over the same period, US oil production rose by almost 2.0 million bpd since

January 2017 to June’s print of 10.9 million bpd, less than the production cuts seen in

OPEC. Into end-2018, the US Energy Information Administration views total US oil

production to average 10.8 million bpd (currently 6M18 average: 10.4 million bpd).

• The uptick in OPEC supplies into 2H18 would invariably raise global oil

production, assuming sustained US production climb over the same period, and likely

exacerbate the over supply climate seen to-date.

13

US oil exports also a key wildcard into 2H18


0

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0200400600800

100012001400160018002000

Feb

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11

De

c-1

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-12

Oct

-12

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-13

Au

g-1

3

Jan

-14

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-14

No

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4

Ap

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5

Sep

-15

Feb

-16

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16

De

c-1

6

May

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-18

$/b

bl

No

. of

oil

rigs

US oil rig count climbs into 2018

Shale Gas & Tight Oil Rigs Conventional Rigs WTI (RHS)

7880828486889092949698

1 5 9 13 17 21 25 29 33 37 41 45 49

(%)

US refinery utilisation rates edged into the driving season

Highest (2013-2017) Lowest(2013-2017)

Average(2012-2017) 2018

Week

Refinery Maintenance Season

Refinery Maintenance Season

Driving Season

5000

6000

7000

8000

9000

10000

11000

0

2000

4000

6000

8000

Oct

-10

Ap

r-1

1

Oct

-11

Ap

r-1

2

Oct

-12

Ap

r-1

3

Oct

-13

Ap

r-1

4

Oct

-14

Ap

r-1

5

Oct

-15

Ap

r-1

6

Oct

-16

Ap

r-1

7

Oct

-17

Ap

r-1

8

Cru

de

Oil

Pro

d -

10

00

bar

rels

/day

Exp

ort

s -

10

00

bar

rels

/day

US Oil production and exports(10 week moving-average)

Crude Oil Exports Finished Motor Gasoline ExportsKerosene-type Jet Fuel Exports Distillate Fuel ExportsResidual Fuel Oil Exports Propane/Propylene ExportsOther Oils Exports Crude Oil Production (RHS)

• US crude oil exports grew into mid-

June to new record highs of 2.1 million

bpd over a 10-week moving average.

• US rig counts continue to climb over

the same period, a leading indicator

that oil production may rise into 2H18.

• Note that while US crude oil

inventories remain near its 5-year

average, much of the decline is also due

to stronger refinery utilisation rates into

mid-year.

14

Demand has been slowing in key importers


-30%

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0%

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30%

Jan

-07

Jul-

07

Jan

-08

Jul-

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Jan

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Jan

-11

Jul-

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Jan

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Jan

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Jul-

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Jan

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Jan

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Jul-

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Jan

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Slowing demand already seen in China and India (12mma - YoY)

US China India EU28 Japan

15

Bullish bets on crude oil dissipated

Source: Bloomberg, CFTC, OCBC Bank

0

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0

20

40

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Jul-

17

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-18

Tho

usa

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s

Crude Oil (WTI)


WTI Futures (USD/bbl.)

0

100

200

300

400

500

600

700

10

30

50

70

90

110

130

Jan

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No

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1

Ap

r-1

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Sep

-12

Feb

-13

Jul-

13

De

c-1

3

May

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Oct

-14

Mar

-15

Au

g-1

5

Jan

-16

Jun

-16

No

v-1

6

Ap

r-1

7

Sep

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Feb

-18

Tho

usa

nd

s

Crude Oil (Brent)


Brent Futures (USD/bbl.)

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

40,000

02

-Jan

-18

09

-Jan

-18

16

-Jan

-18

23

-Jan

-18

30

-Jan

-18

06

-Fe

b-1

8

13

-Fe

b-1

8

20

-Fe

b-1

8

27

-Fe

b-1

8

06

-Mar

-18

13

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-18

20

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-18

27

-Mar

-18

03

-Ap

r-1

8

10

-Ap

r-1

8

17

-Ap

r-1

8

24

-Ap

r-1

8

01

-May

-18

08

-May

-18

15

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-18

22

-May

-18

29

-May

-18

05

-Ju

n-1

8

12

-Ju

n-1

8

19

-Ju

n-1

8

Bullish bets on oil are fading (CFTC spec net-longs - 4-week average change)

16

• The disconcerting aspect of palm oil prices is the surprisingly weak demand

despite the recent Ramadan season. Demand has been surprisingly weak into June

2018, a key driver for falling palm oil prices of late. Statistically, Malaysia’s crude palm oil

exports in May fell 70.5% y/y to 107 thousand metric tonnes, the lowest level since Feb

2007. Indonesia’s crude palm oil exports has also contracted by four consecutive months

into April 2018.

• Production declined as well, seen from a 7.8% y/y contraction in Malaysia’s CPO

production in May. Inventories however remain flushed at 2.2 million metric tonnes in the

same period, highlighting that supplies remain adequate to-date. Still, supplies are also

expected to expand further into October 2018 given seasonal factors, a rather persuasive

driver that could keep palm oil bulls at bay for now.

• Trade tariffs and China’s threat to restrict soybean imports from the US should drive

palm oil prices higher, though it remains to be seen at this juncture. Should history be of

reference, palm oil prices surged on fresh trade tariff-related news in April 2018,

highlighting market bets over potentially higher Chinese palm-related imports.

• We continue to stay bearish over palm oil prices into 2H18 given the fundamental

picture. With supplies likely to print higher into the third quarter amid lackluster demand,

we keep our 3Q price outlook at MYR2,250/MT with downside risks, before seeing some

recovery to our MYR2,400/MT estimate into year-end as supplies dwindle then.

Palm Oil: Poor, poor fundamentals

17

Ramadan-led events failed to spur demand


-70%

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0%

10%

20%

De

c-1

7

Jan

-18

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-18

Mar

-18

Ap

r-1

8

Indonesia CPO Export YOY Indonesia PPO Exports YOY

-100%

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100%

150%

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250%

Jan

-18

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-18

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-18

Ap

r-1

8

May

-18

Malaysia CPO Export YOY Malaysia PPO Exports YOY

• The demand boost from Ramadan-led

celebrations seen in past years did not

materialise in 2018. Palm oil demand

was surprisingly weak pre-Ramadan, led

by lower demand from India, EU, and

Netherlands.

• Note Indonesia’s crude palm oil (CPO)

exports declined for four consecutive

months, while Malaysia surprisingly

clocked a contraction in May.

Weak palm oil export prints seen in key exporting countries

-72.5%

-19.6%

70.6%

18.9%

-52.4%

-100%-80%-60%-40%-20%

0%20%40%60%80%

Ind

ia EU

Ch

ina

Pak

ista

n

Net

her

lan

ds

Palm oil import growth in May 2018, across top five importing countries

18

Supplies were weak, albeit to grow into 2H18


• Despite the relatively weaker export demand seen in 1H18, Malaysia palm oil

inventories remain flushed into end-May at 2.17 million tonnes (vs 5-year average of 1.98

million tonnes).

• Supplies were soft as well in May following replanting exercises in key producing estates

in Peninsula Malaysia (-3.9%) and Sabah (-6.6%). Accounting for the fall, total palm oil

production in Malaysia clocked its first y/y contraction (-7.8%) since June 2017.

• Malaysia’s palm oil production will likely grow further into 3Q18 given seasonal factors,

as palm fruit production and oil yield traditionally picks up during this period. Coupled with

the poor demand seen of late, overall palm oil prices could see further downside risk at least

into 3Q18.

1,800

2,300

2,800

3,300

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0

500

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1,500

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Jan

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-12

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Jan

-14

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-15

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-16

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-17

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17

Jan

-18

('0

00

) m

etr

ic t

on

s

Malaysia palm oil inventories remain flushed given poor export demand

Crude Palm Oil Inventory Processed Palm Oil Inventory

Palm Oil Futures (RHS)

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

Oct

-18

('0

00

) to

ns

Malaysia's CPO production to grow into 2018 Note weaker production in May

Malaysia CPO Production Projected Production

19

‘Normal’ weather conditions for now


-2-1.5-1-0.500.511.522.53

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Ap

r-9

5

Au

g-9

6

De

c-9

7

Ap

r-9

9

Au

g-0

0

De

c-0

1

Ap

r-0

3

Au

g-0

4

De

c-0

5

Ap

r-0

7

Au

g-0

8

De

c-0

9

Ap

r-1

1

Au

g-1

2

De

c-1

3

Ap

r-1

5

Au

g-1

6

MY

R/M

T

Palm oil prices appear to have peaked, prices to fall into 2018?

ONI Index (RHS) Palm Oil Futures (lag 12 months)

El N

ino

La N

ina

ONI > 1.5 = Strong El Nino

ONI < 1.5 = Strong La Nina

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Palm prices rally significantly on weather extremities

• While weak La Nina conditions were reported in early 2018, indicators are now

“consistent with an imminent decay” of the said La Nina event, according to the World

Meteorological Organization. The agency added that there will be a transition to neutral

conditions and a continuation of La Nina condition will be unlikely into 2018.

• We note that past weather extremities are drivers that rallied palm oil prices (1998,

2001, 2008). Recent El Nino as of 2015 did rally prices by as much as 31% y/y, though

recent declines in palm prices indicate the lack of weather extremities to-date.

• With neutral weather conditions to play out, it suggest that any swings in palm oil prices

due to weather conditions is highly unlikely at this juncture.

20

Wither the ringgit? Weaker MYR should support

prices


3.5

3.7

3.9

4.1

4.3

4.5

2,000

2,200

2,400

2,600

2,800

3,000

3,200

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

MY

R/M

T

The weaker MYR to-date did not support palm oil prices, likely given poor CPO demand

Palm Oil Futures USD/MYR (RHS)

21

US-Sino trade tariffs should benefit palm oil… but?

Source: MPOB, OCBC Bank

22

Other factors: Soybeans and other risk assets


230

250

270

290

310

330

350

370

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

Jul-

16

Jan

-17

Jul-

17

Jan

-18

mill

ion

me

tric

to

ns

Global soybean production continued to climb into 2017

Global Soybean Production

• Movement in palm oil prices will also

depend on other growth-related

commodities including copper and crude

oil remain near 2010 levels, with recent

movements hinting at some price

consolidations at this juncture.

• Global soybean production continue to

print new highs at 355 million tonnes

(+3.1% y/y in May 2018).

0

200

400

600

800

1000

1200

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

USD

/MT

Cheaper soyoil drags palm oil as an alternative product

Crude palm oil Soy Oil Soy Oil - CPO Premium

0

200

400

600

800

1000

1200

1400

1600

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

USD

/MT

Palm oil prices may turn neutral-soft depending on how gasoil prices move

Crude palm oil Gas Oil Futures

23

OCBC Commodity Forecast 2H18

Source: MPOB, OCBC Bank

Updated as of June 26, 2018

3y AVG Spot Q1 Q2 Q3 Q4 Q1 Q2F Q3F Q4F

Energy

WTI ($/bbl) 47.1 68.1 51.8 48.2 48.2 55.3 62.9 67.6 66.3 65.0

Brent ($/bbl) 50.7 74.7 54.6 50.8 52.2 61.5 67.2 74.7 71.3 70.0

Gasoline ($/gallon) 1.53 2.05 1.58 1.58 1.63 1.71 1.86 2.11 2.16 1.97

Natural Gas ($/mmbtu) 2.68 2.92 3.06 3.14 2.95 2.92 2.85 2.83 3.24 3.18

Precious Metals

Gold ($/oz) 1210.4 1,269 1,221 1,259 1,283 1,279 1,331 1,312 1,273 1,300

Silver ($/oz) 16.5 16.4 17.5 17.2 16.9 16.7 16.7 16.6 16.2 16.6

Platinum ($/oz) 994 871 983 942 957 925 981 909 909 963

Palladium ($/oz) 722 935 768 815 899 988 1,026 973 943 1,000

Base Metals

Copper ($/MT) 5,523 6,755 5,855 5,692 6,383 6,856 6,997 6,909 6,705 6,500

Tin ($/MT) 17,764 20,190 20,012 19,906 20,482 19,817 21,151 20,975 20,317 20,313

Nickel ($/MT) 10,630 14,668 10,277 9,214 10,547 11,614 13,277 14,454 13,683 13,000

Zinc ($/MT) 2,265 2,858 2,789 2,604 2,961 3,198 3,390 3,116 3,048 3,023

Aluminum ($/MT) 1,737 2,155 1,858 1,913 2,027 2,122 2,160 2,261 2,225 2,100

Asian Commodities

Crude Palm Oil (MYR/MT) 2,523 2,290 2,938 2,545 2,670 2,659 2,491 2,394 2,250 2,400

Source:

Historical Data - Bloomberg

Forecasts - OCBC Bank

Data reflects average price

2017 2018

Thank You

24

25

Disclaimer Treasury Market Research & Strategy

Selena Ling ([email protected]) Tel : (65) 6530 4887

Emmanuel Ng ([email protected]) Tel : (65) 6530 4073

Tommy Xie Dongming ([email protected]) Tel : (65) 6530 7256

Barnabas Gan ([email protected]) Tel : (65) 6530 1778

Terence Wu ([email protected]) Tel : (65) 6530 4367

Alan Lau ([email protected])

OCBC Credit Research

Tel: (65) 6530 5949

Andrew Wong ([email protected]) Tel : (65) 6530 4736

Ezien Hoo ([email protected]) Tel : (65) 6722 2215

Wong Hong Wei ([email protected]) Tel : (65) 6722 2533

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