Close High Low Daily change Change (%) Cash Settle

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1 : Daily Focus: China PGM imports on the weak side 21 February 2012 Focus: We believe that the Chinese customs data is consistent with our view that weak industrial demand will make it difficult for platinum and palladium to rally sustainably beyond $1,650 and $700 respectively. We also continue to look at platinum and palladium from a cost-push perspective, and believe that platinum and palladium below $1,500 and $600 respectively are too low. The long-awaited bailout package for Greece was finally rubber stamped last night. The target of 120.5% of GDP by 2020 shows just how much work there is to do, with the implementation of austerity measures, and the forthcoming Greek elections in April now the main stumbling blocks. The euro has strengthened against the dollar, albeit rather half heartedly, helping the base metals rally ahead of US trade. With the US on holiday and the rest of the market holding its breath ahead of the much-anticipated meeting of Eurozone finance ministers last night, yesterday saw precious metals trade largely sideways. However, after the conclusion of the meeting, at which agreement was reached for Greece to receive the required 130bn in bailout loans, markets immediately reacted positively. Most of the pick-up in precious metals was owed to a weaker dollar. Strategists Walter de Wet, CFA* Walter.DeWet@standardbank.com Leon Westgate* Leon.Westgate@standardbank.com James Zhang* Jinzhong.Zhang@standardbank.com Marc Ground, CFA* Marc.Ground@standardbank.com The oil market ground higher yesterday during a relatively quiet trading day as the International Petroleum Week kicked off in London and the US market was closed for President s Day. Brent rose by 47c/bbl, to close above the psychologically important level of $120/bbl again after the dip last Friday. Commodity price data (20 February 2012) Base metals LME 3-month Close High Low Daily change Change (%) Cash Settle Change in cash settle Cash - 3m Aluminium 2,191 2,179 2,198 2, % 2, Copper 8,336 8,236 8,397 8, % 8, Lead 2,066 2,051 2,079 2, % 2, Nickel 19,879 19,755 20,050 19, % 19, Tin 23,600 23,505 24,349 23, % 23, Zinc 1,980 1,982 2,008 1, % 1, Energy Open Close High Low day/day Change (%) ICE Brent % NYMEX WTI % ICE Gasoil 1, , , , % API2 Q2' % Precious metals AM Fix PM Fix High bid Low offer Closing bid Change (d/d) EFP's Gold 1, , , , , /1.7 Silver /0.0 Platinum 1, , , , , /3.5 Palladium /1.0 Sources: Standard Bank; LME; BBG Please refer to the disclaimer at the end of this document.

2 Focus: China PGM imports on the weak side Customs data this morning showed that China s platinum imports for 2012 were off to a weak start. The country imported only 149K oz during the month. This is 94,660 oz less than the import number in December and 87,800 oz less than the amount imported in January China s imports of palladium look slightly better than the platinum imports but remain well below the number seen a year ago. China imported 76,193K oz of palladium in January this year, compared with 87,833oz of palladium in January The decline in PGM demand is consistent with auto sales growth in China which have remained fairly flat y/y in 2011 after strong growth seen in We expect 2012 auto sales in China to be off to a slow start too. Looking more closely at the platinum imports, we believe that they not only reflect price sensitivity but also strong seasonality of jewellery demand. Platinum imports have increased steadily from September, following the decline in platinum from $1,900/oz, to below $1,500/oz by mid-october. China s imports accelerated even more into December as the platinum price dropped below $1,400 and jewellery demand picked up ahead of the Chinese New Year. Given that auto demand growth is not strong and China s car market favours palladium demand, the strong platinum imports, we believe, reflect solid jewellery demand rather than industrial demand. However, this demand is likely to fall away, should the platinum price rise too fast. We believe that the Chinese customs data is consistent with our view that weak industrial demand will make it difficult for platinum and palladium to rally sustainably beyond $1,650 and $700 respectively. We also continue to look at platinum and China s palladium imports oz China platinum imports oz 120,000 90,000 60,000 30, , , , ,000 0 Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Sources: China Customs; Standard Bank Research Sep Sep Oct Oct Nov Nov Dec Dec palladium from a cost-push perspective, and believe that platinum and palladium below $1,500 and $600 respectively are too low. By Walter de Wet Base metals The long-awaited bailout package for Greece was finally rubber stamped last night. The target of 120.5% of GDP by 2020 shows just how much work there is to do, with the implementation of austerity measures, and the forthcoming Greek elections in April now the main stumbling blocks. The euro has strengthened against the dollar, albeit rather half heartedly, helping the base metals rally ahead of US trade. This afternoon, the main event will be the US market's reaction to the Greek debt deal as they return following the long President s Day weekend. Overnight, however, the focus will switch to China, in particular the release of the February Chinese HSBC Flash Manufacturing PMI (last seen at 48.8). Copper has rallied during the morning and into the early afternoon, helped by the wider market s reaction to the Greek bailout agreement and by a stronger euro. The 200-day MA has provided some resistance, however, with copper drifting off its intraday highs ahead of US trade. After climbing yesterday, on-warrant LME stocks have fallen 5,750 mt, due primarily to an 8,300 mt jump in cancelled warrants in St Louis, albeit offset slightly by a 3000 mt increase in on warrant stocks in New Orleans. In other news, the latest Chinese refined copper import figures have come through, with January seeing imports come in at 335,480 mt, from 406,937 mt in December. As we previously noted when the preliminary customs figures were released, looked at on a per day basis, and assuming a 7-day shutdown at customs, the January number is actually slightly higher than the December imported figure. 2 Tin prices have continued to drift lower, albeit the metal continues to find support around its 200-day MA. Open interest and prices have started to drift off, suggesting that long liquidation is emerging after the metal s strong start to the year. Inventories have started to pick up over the past week or so, with on-warrant stocks climbing another 240 mt this morning, to 9,100 mt. By Leon Westgate

3 Precious metals With the US on holiday and the rest of the market holding its breath ahead of the much-anticipated meeting of Eurozone finance ministers last night, yesterday saw precious metals trade largely sideways. However, after the conclusion of the meeting, at which agreement was reached for Greece to receive the required 130bn in bailout loans, markets immediately reacted positively. Most of the pick-up in precious metals was owed to a weaker dollar. However, enthusiasm has faded this morning, as the euro loses ground. Most precious metals are trading at the levels before the conclusion of last night s meeting. Perhaps confidence has been dented by a leaked confidential report, currently doing the rounds, that warns that Greece could require even more debt relief. In addition, uncertainty over the public backlash and the upcoming Greek elections (in April) has also perhaps dampened confidence in the deal. For the rest of today, we might see some support for prices as the US plays catch up to the overnight Eurozone news. However, should the current questioning of the situation in Greece gain traction (which Eurozone equities, currently in the red, seem to indicate) we could see precious metals remain on the backfoot due to the stronger dollar. Gold support is at $1,730 and $1,723. Resistance is $1,742 and $1,745. Silver support is at $33.47 and $33.21, resistance is at $33.84 and $ Platinum support is at $1,648 and $1,631, resistance is at $1,671 and $1,676. Palladium support is at $693 and resistance at $703. By Marc Ground Energy The oil market ground higher yesterday during a relatively quiet trading day as the International Petroleum Week kicked off in London and the US market was closed for President s Day. Brent rose by 47c/bbl, to close above the psychologically important level of $120/bbl again after the dip last Friday. Trading in ICE gasoil was also subdued. Both the term structure of Brent and price differentials in physical crude cargoes continued to weaken, signalling a softer market. After weeks of speculation, the Eurozone finance ministers finally agreed upon a second bailout for Greece, which includes a 53.5% write-down for investors in Greek bonds. Based on the official projection, the Greek debt target will be 121% of GDP by 2020, which remains very high, with some market commentators arguing that it s unsustainably high. The euro strengthened versus the dollar, which has boosted the oil market. However, the broad market, including both the equity and commodity market, largely ignored the Greece debt negotiation over the past few weeks. Similarly, we believe that the latest agreement will also have little bearing on the market. We still believe that the rally in Brent prices is overstretched. The latest softness in physical crude differentials and a pause in the Brent structure rally signal that the rally in the flat price might have gotten ahead of the physical market, and therefore a correction is due. Meanwhile, demand is likely to be seriously dented as oil prices in euro and sterling are around their all-time highs. With regard to investment money flow, open interest in the Brent futures market appeared to be reaching a plateau, which might suggest that buying power is waning. On balance, we see substantially more downside risk in Brent than upside in the next few weeks. By James Zhang 3

4 Base metals Daily LME Stock Movement (mt) Metal Today Yesterday In Out Energy One day change YTD change (mt) Cancelled warrants (mt) Cancelled warrants (%) Contract turnover Aluminium 5,117,075 5,120, ,575-3, ,675 1,554, ,971 Copper 305, ,375 2,550 3, ,025 82, ,668 Lead 377, , ,975-1,975 24,750 42, ,058 Nickel 96,816 97, ,768 4, ,777 Tin 10,080 9, ,110 1, ,961 Zinc 850, , ,875 4, ,604 Shanghai 3-month forward prices COMEX active month future prices Metal Open Last 1d Change Open Close Change Change (%) Aluminium 16,105 16, Ali Mar' Copper 59,250 59, Cu Mar' % Zinc 15,615 15, ZAR metal prices Aluminium Copper Lead Nickel Tin Zinc ZAR/USD fix Cash 16,313 63,048 15, , ,322 14, month 16,906 63,895 15, , ,364 15, Energy futures pricing Price Change Price Change Price Change Price Change Price Change 1 month 2 month 3 month 6 month 1 year Sing Gasoil ($/bbbl) Gasoil 0.1% Rdam ($/mt) 1, , , NWE CIF jet ($/mt) 1, , , , , Singapore Kero ($/bbl) % Rdam barges ($/mt) % Fuel Oil FOB ($/mt) Sing FO180 Cargo ($/mt) Thermal coal Q2-12 Q3-12 Q4-12 Cal 13 Cal 14 API2 (CIF ARA) API4 (FOB RBCT) Precious metals Forwards (%) 1 month 2 months 3 months 6 months 12 months 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 Apr'12 May'12 Apr'12 Apr'12 Apr 12 Dec'12 Apr'12 Settlement 1, , , , , Open Interest 440, ,137 20,518 43,721 2, ,396 1,610 Change in Open Interest Sources: Standard Bank; LME; Bloomberg 4

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