Open Close High Low Daily change Change (%) Cash Settle

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1 Commodities Daily 13 October 2009 Focus: Chinese auto sales powering ahead Chinese vehicle sales rose a staggering 83.6% y-o-y in September, to million units, comfortably exceeding US auto sales which slumped after the end to the cash for clunkers scheme. The continued strength of the Chinese auto industry has helped offset some, albeit not all of the weakness in the US and Europe, and has provided a solid backbone for the PGMs both in terms of sentiment and demand. 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 With LME week in full swing, volumes remain. As such, technical signals, the dollar and equity markets will continue to dictate price direction. remain well supported despite the net speculative long positions in the futures market being very high. We expect these positions to remain high for the rest of Q4:09. They raise the risk of price corrections. However, we also believe dips should be bought during the next quarter. Crude oil prices continued to find support this morning despite market expectations for another US crude oil inventory gain consensus is for tomorrow s DOE crude oil inventory data to record a 1,000K barrel gain. Commodity price data (12 October 2009) Base metals LME 3-month Open Close High Low Daily change Change (%) Cash Settle Change in cash settle Cash 3m Aluminium 1,950 1,947 1,958 1, , Copper 6,266 6,280 6,305 6, , Lead 2,292 2,295 2,300 2, , Nickel 19,025 18,825 19,180 18, , Tin 14,800 14,700 14,800 14, , Zinc 2,081 2,095 2,095 2, , Sources: Standard Bank; LME; BBG Open Close High Low day/day Change (%) ICE Brent % NYMEX WTI % ICE Gasoil % API2 Q4' % ICE EUA Dec % AM Fix PM Fix High bid Low offer Closing bid Change (d/d) EFPs Gold* 1, , , , , /1.2 Silver /3.5 Platinum 1, , , , , /7 Palladium /3 Please refer to the disclaimer at the end of this document.

2 Focus: Chinese auto sales powering ahead Chinese vehicle sales rose a staggering 83.6% y-o-y in September, to million units, comfortably exceeding US auto sales which slumped after the end to the cash for clunkers scheme. Chinese auto sales have been climbing steadily over the past few years, however sales stepped on again this year on the back of China s stimulus package. The continued strength of the Chinese auto industry has helped offset some, albeit not all of the weakness in the US and Europe, and has provided a solid backbone for the PGMs both in terms of sentiment and demand. In terms of demographics, the emergence of a middle class in China was always going to see Chinese auto sales overhaul that of the US. What is surprising is that it has managed to do it in the midst of a recession, highlighting just how differently the two economies are behaving under the current conditions. In terms of PGM demand, the Chinese auto figures are very significant indeed with the market providing a solid demand base. With the global auto industry also expected to stabilise and recover over the coming months, demand for the PGMs continue to remain solid. We expect this solid demand to lead to a strong price recovery for both platinum and palladium Chinese and US auto sales current Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 US Auto Sales Chinese Passenger Car Sales Sources: Global Markets Research, Bloomberg heading into next year, as restocking by western consumers adds to the Chinese momentum. Leon Westgate Base metals A weaker dollar has given the base metals a boost heading into the afternoon. Aluminium, lead and zinc have continued to outperform the likes of copper and tin with yesterday s strength spilling over into this morning. With LME week in full swing, volumes remain. As such, technical signals, the dollar and equity markets will continue to dictate price direction. An added dynamic over the next week or so is the Q3 reporting season, with the likes of JP Morgan reporting tomorrow and Goldman Sachs and Citigroup on Thursday. The impact of these results on the US equity markets may have a spill-over effect on the base metals markets, particularly during US trading hours. Copper as been relatively subdued so far this week, more or less trading sideways. The metal has rallied back above $6,300 heading into the afternoon, however an increase in on-warrant stocks - up 1,125 mt this morning - has weighed on prices. Ultimately, the metal still remains range-bound. Zinc by way of contrast has traded above $2,100, reaching the highest level since July Much of the legwork was done yesterday, with the metal rallying 3%, however that momentum, aided by a weaker dollar, have seen prices continue to rise. Also providing support has been a 1,925 mt fall in on-warrant stocks, due primarily to a 1,225 mt jump in cancelled warrants in New Orleans. With the main data releases starting tomorrow and Thursday, caution could be the main theme. Data-wise it will be a quiet day in the US. Leon Westgate 2

3 remain well supported despite the net speculative long positions in the futures market being very high. We expect these positions to remain high for the rest of Q4:09. They raise the risk of price corrections. However, we also believe dips should be bought during the next quarter. China released its September auto sales data this morning. Auto sales rose 83.6% y/y, to million units. US auto sales remain weak after the end of the cash-for-clunkers programme; China s physical demand for PGM has supported the market over the past year. It has been by far the largest importer of platinum and palladium over the past 12 months, which is set to continue. At the same time, volumes traded on Shanghai have not fallen much with the latest rally in platinum. The platinum price in yuan has risen from CNY280 at the start of the month, to CNY 307 today an increase of 10%. More support to platinum could come from further increases in electricity tariffs in South Africa. Indications are that ESKOM, the South African power utility, will request a tariff increase of 145% over the next three years. We estimate the direct impact on PGM producers cost at 12%. However, there could be a further indirect impact on costs, as wage demands may also rise on the back of higher inflation. Combined with a strong ZAR, we still see support for platinum and palladium from a cost perspective. Platinum support is at $1,342 and resistance at $1,360. Palladium support is at $325 and resistance at $340. Gold continues to hit new highs, reaching $1,065 this morning. We are still looking for $1,100 although we expect a bumpy ride. Buying the dips remains our preferred strategy. Gold support is at $1,050 and $1,042 and resistance at $1,065 and $1,070. As long as gold pushes higher, silver should follow. We see support at $17.60 and $17.50, with resistance at $18.00 and $ Walter de Wet Crude oil prices continued to find support this morning despite market expectations for another US crude oil inventory gain consensus is for tomorrow s DOE crude oil inventory data to record a 1,000K barrel gain. Front-month WTI crude slid from $ 73.85/bbl in New York electronic trade yesterday to $72.80/bbl in early Asian trade this morning. However, equity market gains in Asia and Europe this morning are impacting positively on the front-end of the crude oil forward curve with front-month WTI crude jumping back to above $73.49/bbl. A bullish API crude oil inventories report today may see US crude oil testing the strong resistance level at $74-$75. Support and resistance for front-month WTI crude are at $72.38/bbl and $74.12/bbl respectively today. Positive developments on the economic data front, China s Business Climate Index gained 7.3% q/q, to in Q3:09. However, the German ZEW economic sentiment index came in lower than expected, which may see some euro weakness creeping in. Thermal coal contract prices edged higher yesterday as crude oil prices climbed higher while the Baltic Dry index held steady following a 1.81% gain on Friday. API2(CIF ARA) for Q4:09 delivery gained $0.65/mt, to $73.90/mt. API4(FOB) for Q4:09 delivery climbed $0.65/mt, to $66.40/mt. Of note, weekly data at Australia s Newcastle Coal terminal shows export tonnage increased 12.6% w/w despite a fall in the shipping queue from 35 vessels to 25 vessels. Coal inventories at the Newcastle port increased 17.4% w/w and 2.7% w/w at Carrington and Kooragang respectively signalling demand weakness. Carbon contract prices climbed higher amid a stronger energy complex. ICE EUA for December 2009 delivery gained EUR0.65/mtCO2, to EUR14.33/mtCO2. UN-backed CER for December 2009 delivery climbed EUR0.75/mtCO2, to EUR13.17/ 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 4,558,800 4,561,225 4,300 6,725-2,425 2,229, , ,587 Copper 347, ,375 1, ,175 7, ,535 Lead 128, , ,025 1, ,702 Nickel 121, , ,002 1, ,200 Tin 26,205 26, , ,123 Zinc 430, ,025-1,925-1, ,600 10, ,118 Shanghai 3-month forward prices COMEX active month future prices Metal Open Last 1d Change Open Close Change Change (%) Aluminium 14,920 14, Ali Oct' % Copper 49,140 49, Cu Oct' % Zinc 15,900 15,850-5 ZAR metal prices (12 October 2009) Aluminium Copper Lead Nickel Tin Zinc ZAR/USD fix Cash 14,207 46,265 16, , ,583 15, month 14,695 47,400 17, , ,951 15, 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 Q4:09 Q1:10 Q2:10 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 Dec'09 Sep'09 Oct'09 Oct'09 Aug'09 Jun'10 Aug'09 Settlement 1, , , , , Open Interest 502, ,944 21,875 30,745 1,798 89,622 3,938 Change in Open Interest 2, , Date: 12 October 2009 Sources: Standard Bank; LME; Bloomberg Cancelled warrants (mt) Cancelled warrants (%) 4

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