Open Close High Low Daily change Change (%) Cash Settle. Open Close High Low day/day Change (%) ATM 1-m vol ATM 6-m vol ATM 1-y vol

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1 Commodities Daily 24 July 2009 Focus: Chinese Aluminium Imports - Chinese imports of primary aluminium have surged over the past 6 months, with the country becoming a significant net importer of the metal for the first time since The surge in imports so far this year has been partly a function of the LME-SHFE arbitrage, however, China was already shifting towards becoming a net importer anyway. With no guarantee that the trend will be reversed, looking ahead, a continued lack of Chinese primary aluminium exports will likely be supportive to prices as the global economy recovers. After a mixed start on Thursday, stronger equity markets and much better than expected US housing numbers saw the base metals recover strongly during the afternoon. That trend has continued into Friday morning. Tin has continued to rally strongly this morning and is now back at the levels seen at the end of June. Walter de Wet* CFA +44 (20) Walter.DeWet@standardbank.com Leon Westgate* +44 (20) Leon.Westgate@standardbank.com Manqoba Madinane* +27 (11) Manqoba.Madinane@standardbank.co.za We believe upward momentum for gold is fading, with the resistance band between $955 $960 proving strong. In line with expectations, physical selling is high when gold approaches $960. We expect a range-bound day, with gold protected at $945. Platinum and palladium remain top-heavy, with both the failing to make large moves higher. We would look at Anglo Platinum s production figures for Q2:09 due for release on Monday. Commodity price data (23 July 2009) Base metals LME 3-month Open Close High Low Daily change Change (%) Cash Settle Change in cash settle Cash 3m Aluminium 1,741 1,786 1,788 1, , Copper 5,465 5,530 5,565 5, , Lead 1,717 1,745 1,745 1, , Nickel 16,375 16,400 16,600 16, , Tin 14,000 14,475 14,490 14, , Zinc 1,675 1,700 1,706 1, , Sources: Standard Bank; LME; Bloomberg Open Close High Low day/day Change (%) ATM 1-m vol ATM 6-m vol ATM 1-y vol ICE Brent % NYMEX WTI % ICE Gasoil % API2 Q3' % ICE EUA Dec % AM Fix PM Fix High bid Low offer Closing bid Change (d/d) EFPs Gold /0.00 Silver /-1.0 Platinum 1, , , , , /4 Palladium /3 Please refer to the disclaimer at the end of this document.

2 Focus: Chinese Aluminium imports Chinese imports of primary aluminium have surged over the past 6 months, with the country becoming a significant net importer of the metal for the first time since 2000 (see chart). The surge in imports so far this year has been partly a function of the LME-SHFE arbitrage, as Chinese state and regional stockpiling activity earlier in the year boosted domestic prices making LME material more attractive. Looking at the trend over the past couple of years however, China was already shifting towards becoming a net importer once again, with 2008 seeing Chinese net imports for the year come in at, an albeit very small, 90,000 mt. With China shifting back towards becoming a net importer of primary aluminium anyway, regardless of the financial crisis and sharp fall in commodity prices, there is no guarantee that the country will shift back to becoming a significant net exporter of primary metal, particularly given the recent consolidation in the Chinese smelting industry. In terms of the impact on prices, the effect of rising Chinese imports and arbitrage buying has been to give LME prices a significant short term boost and has restrained the growth in LME inventories. Looking further ahead, the lack of Chinese primary exports would likely continue to be supportive to aluminium prices as the global economy recovers. Chinese net import/exports vs LME 3m Aluminium price kt Jan-00 Imports Exports Jan-01 Jan-02 Jan-03 Jan-04 Import/Export (LH axis) Source: Standard Bank, LME, MBR Jan-05 We do note however that the large overhang of exchange inventories will likely dampen the price response when compared to metals with tighter supply fundamentals such as copper and zinc. Jan-06 Jan-07 Jan-08 Jan-09 $/t LME 3mth price (RH axis) Leon Westgate Base metals After a mixed start on Thursday, much better than expected US housing numbers saw the base metals recover strongly during the afternoon, with stronger equity markets also helping to boost sentiment. Better than expected earnings numbers from the likes of Ford Motor Co. helped propel the Dow back through 9,000 while the FTSE has traded back above the 4,500 mark. The strength in the equity markets, and the weaker dollar - as the market continues to shift from a defensive posture back into risk seeking mode - have been a key driver behind higher metals prices this week. This has continued to be the case during Friday morning, however with the weekend fast approaching, some profit taking activity may emerge later on this afternoon. On the economic front, better than expected German business confidence has helped support the Euro, though the currency had already been strengthening against the dollar for much of the morning anyway. This afternoon s main economic data is the U. of Michigan Confidence index (expected at 65.0). Aluminium has traded back above $1,800 during Friday morning, the first time since late November, as a combination of yesterday s momentum and further dollar weakness propelled the metal higher. In other news, Norsk Hydro has announced that it will not increase production from current levels, in spite of higher prices. The company slashed its production output by 460 ktpy in Q2, equivalent to around 26% of its 2008 output. Copper recovered strongly on Thursday after coming under pressure during the early afternoon, eventually closing at $5,530. After a brief wobble first thing on Friday morning, prices have since continued to rally, boosted by the weaker dollar. Shanghai copper stocks declined for the third week in a row, falling 3,935 mt to 49,348 mt, however the SHFE data was offset to a certain extent however by a 2,125 mt increase in LME inventory, with New Orleans again the main location for the inflow. The past week has seen on-warrant copper stocks in New Orleans increase by 4,375 mt. Of the other base metals, Tin has been the strongest metal over the past couple of days, climbing 3.5% on Thursday to close at $14,490, and pushing on a further 2% heading into Friday afternoon. Tin prices are now back at the levels seen at the end of June. Leon Westgate 2

3 The correlation between equities and the US dollar is currently very high. With US equity markets that have traded higher since the start of the week, risk-averse positions are being unwound to the detriment of the dollar. Currently, the 10-day correlation between gold and the dollar is But the correlation between dollar movements and gold might decline today. As a result, gold may react less to either dollar appreciation or depreciation. We believe upward momentum for gold is fading, with the resistance band between $955 $960 proving strong. In line with expectations, physical selling is high when gold approaches $960. We expect a range-bound day, with gold protected at $945. We favour selling into rallies approaching $960. Should gold break below $945, we could see the metal retrace to $930. Platinum and palladium remain top-heavy, with both the failing to make large moves higher. With Lonmin keeping its sale target of platinum unchanged at 680K 700K, we would look at Anglo Platinum s production figures for Q2:09 due for release on Monday. Anglo s production target is 2.4m oz of refined platinum in In Q1 Anglo only produced only 404,000oz of refined platinum. For Anglo, to reach its platinum production target, we would look to the company to announce platinum production of well over 600Koz during Q2. For platinum support remains at $1,165 and resistance at $1,185. Palladium support is at $254 ad resistance at $260. Should equity markets continue to rally, we would remain more bullish on silver than gold. Silver support is at and $13.50 and $13.86 and $ Looking ahead to next week: there will be plenty of data releases, including US Q2 GDP figures and consumer sentiment data in the US and Eurozone. While we do not expect any major surprises, we would be cautious after the recent strong rally in all commodities and equities. Correlation amongst all of these assets is very high. Walter de Wet With not much guidance from economic data, front-month WTI crude oil range-traded between $65.05/bbl and $65.74/bbl in Asian and London trade yesterday. The contract ratcheted to the upside in New York trade, rising from $64.40/bbl to $67.49/ bbl as the greenback weakened from $ to $ A surprise 3.6% m/m increase in June US existing home sales (against market expectations for a 1.5% m/m rise) also benefited crude oil sentiment in New York. After spreads across the WTI curve widened substantially on Wednesday, yesterday saw front-month prices receiving more support. As a result, spreads have narrowed once again, implying more tightness in crude oil than at the start of the week. Despite the US dollar s ascent to $ against the euro today, front-month WTI climbed from $66.47/bbl to $67.18/bbl as Asian equity markets rallied with the Nikkei rising 1.55%. However, yesterday s 6.1% w/w rise in US initial jobless claims showed US labour market conditions continue to be weak. Reports of increased Chinese thermal coal import demand, with Chinese Customs data showing a 126% y/y increase in thermal coal imports, supported thermal coal contract prices yesterday. API2(CIF ARA) for Q3:09 delivery gained $0.60/mt to $67.75/mt. API4(FOB) for Q4:09 delivery gained $0.80/mt to $62.35/mt. There are also signals of increased Indian thermal coal import demand, with India accounting for approximately 30% of South African thermal coal exports in H1:09. With the Indian manufacturing sector still in expansion, Indian thermal coal import demand could increase which could support thermal coal contract prices. Noteworthy, the Baltic Dry index fell 1.52% yesterday. Carbon emissions contract prices were steady yesterday as German base load power prices drifted sideways yesterday. Active-year ICE EUA firmed EUR0.11/mtCO2, to EUR14.45/mtCO2, whilst UN-backed CER for December delivery was unchanged, at EUR12.89/mtCO2. Manqoba Madinane 3

4 Base metals Daily LME stock movement (mt) Metal Today Yesterday In Out One day change YTD change (mt) Contract turnover Aluminium 4,552,525 4,553,650 5,675 6,800-1,125 2,223, , ,101 Copper 273, ,725 3,325 1,100 2,225-65,825 8, ,086 Lead 95,500 95, ,350 2, ,470 Nickel 106, , ,602 1, ,219 Tin 18,275 18, , ,412 Zinc 352, , ,250 7, ,118 Shanghai 3-month forward prices Copper 43,550 43, Cu July' % Zinc 13,800 13, ZAR metal prices (23 July 2009) Aluminium Copper Lead Nickel Tin Zinc ZAR/USD fix Cash 13,114 42,163 13, , ,109 12, month 14,000 43,361 13, , ,498 13, futures pricing Price Change Price Change Price Change Price Change Price Change 1-month forward 2-month forward 3-month forward 6-month forward 1-year forward Sing Gasoil ($/bbbl) Gasoil 0.1% Rdam ($/mt) NWE CIF jet ($/mt) Singapore Kero ($/bbl) % Rdam barges ($/mt) % Fuel Oil FOB ($/mt) Sing FO 380 Cargo ($/mt) Sing FO180 Cargo ($/mt) Thermal coal Q3-09 Q4-09 Q1-10 Cal 11 Cal 12 API2 (CIF ARA) API4 (FOB RBCT) Carbon Spot Dec-09 Dec-10 Dec-11 Dec-12 ICE - ECX EUA ( /mt) ICE - ECX CER ( /mt) Forwards (%) 1-month 2-month 3-month 6-month 12-month Gold Silver USD Libor Technical Indicators 30-day RSI 10-day MA 20-day MA 100-day MA 200-day MA Support Resistance Gold Silver Platinum , , , , , , Palladium Active Month Future COMEX GLD COMEX SLV NYMEX PAL NYMEX PLAT DGCX GLD TOCOM GLD CBOT GLD Aug'09 Sep'09 Oct'09 Oct'09 Aug'09 Jun'10 Aug'09 Settlement , , Open Interest 394,360 96,402 17,225 21, ,877 3,454 Change in Open Interest 3,421-1, Date: 23 July 2009 Sources: Standard Bank; LME; Bloomberg Cancelled warrants (mt) COMEX active month future prices Cancelled warrants (%) Metal Open Last 1d Change Open Close Change Change (%) Aluminium 13,920 14, Ali July' % 4

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