This document is a monthly newsletter from Swedbank's Economic Research Department discussing commodity prices and trends. The key points are: 1) Global commodity prices increased broadly in March, with metals seeing the biggest gains. Food prices continued falling for the second month. 2) Rapidly rising commodity prices, especially for iron ore and steel, will test the strength of the global economic recovery as companies face higher costs. 3) Commodity price increases are being driven by strong demand in Asia and expansive economic policies, but budget issues and overheating concerns in emerging markets may lead prices to cool later in the year.

1. Energy & Commodities
Monthly newsletter from Swedbank’s Economic Research Department
by Jörgen Kennemar No. 4 • 9 April 2010
Economic Research Department. Swedbank AB. SE-105 34 Stockholm. Phone +46-8-5859 1000.
E-mail: ek.sekr@swedbank.se www.swedbank.se
Legally responsible publisher: Cecilia Hermansson. +46-8-5859 1588.
Magnus Alvesson. +46-8-5859 3341. Jörgen Kennemar. +46-8-5859 1478.
Strong price gains for commodities in March
• Global commodity prices increased broadly in March, as a result of which
Swedbank’s total commodity price index rose by 5.3% in USD compared
with February. Metals noted the biggest price gain and have now reached
their highest levels since August 2008. Food prices fell for the second
consecutive month.
• Rapidly rising commodity prices will test the strength of the global economic
recovery. Iron ore prices have doubled in 2010, which is leading to higher
steel prices and affecting large parts of the manufacturing industry.
Companies can either transfer the cost to their end customers, which
would seem unlikely given economic conditions, or they will see their profit
margins shrink.
• In addition to strong underlying demand for commodities in Asia, the price
increase is being aided by expansive economic policies. Growing budget
imbalances and the risk of overheating in several emerging economies are
increasing the need for austerity, however. Eventually this could cause the
commodity market to cool off and prices to fall.
Swedbank’s commodity price index for March rose
by 5.3% in USD, thereby recouping February’s loss.
As a whole, the index rose by just over 5% in the
first three months of the year, a more modest gain
than when measured in euro. Since December of
last year, the decline in the euro against the dollar
has led to a rise in commodity prices in the range of
13% during the first quarter.
The broad-based gains in the March commodity
price index contrasted sharply with the previous
month. The increase has been driven in no small
part by higher energy prices (coal and oil), which
weigh heavily in the index. The price of crude oil
rose in USD by an average of 6.3% and in 12
months has climbed 69.5%. Increased oil
consumption in Asia’s emerging economies has
contributed to an upward revision in global oil
consumption estimates for 2010.
Swedbank’s Commodity Price index, USD
Source: Swedbank
00 01 02 03 04 05 06 07 08 09 10
Index
50
100
150
200
250
300
350
400
450
500
Total index exclusive energy commodities
Total index
Food
Energy raw materials
2000=100

2. Energy & Commodities
Monthly newsletter from Swedbank’s Economic Research Department, continued
No. 4 • 9 April 2010
2 (4)
Expansion in Asia is driving up crude oil
prices
OPEC’s decision on 17 March to maintain current
oil production levels is not expected to jeopardise
the global economic recovery, at the same time that
there is still an oil surplus. Crude prices of around
70-80 dollars a barrel are also considered a level
where new capacity can be profitable, especially in
countries where extraction costs are high.
A continued expansion in Asia and more signs of an
economic recovery in the U.S., the world’s largest
oil consumer, could push oil prices higher.
Expectations of higher crude prices are reflected in
futures prices, where crude (Brent) for delivery in
December 2010 was priced at the time of writing at
nearly 90 dollar a barrel, compared with a spot price
of 84 dollars. This means that oil prices are at a
higher level than our average forecast of 75 dollars
a barrel this year. Too high an oil price could put the
recovery at risk. The fear of an overheated Chinese
economy still remains, which could lead to more
cutbacks than announced so far. In other words,
there is a risk that the rising trend in oil prices could
be broken when the impact of austerity measures
becomes evident. It is still too early to revise our oil
forecast upward, but there will be enough reason if
global oil demand continues to grow.
The price rise for coal, which is an important energy
source as well as an input good for the steel
industry, has been considerably more modest than
for crude. In March the price rose by 1.2%, and
since energy resources bottomed out in December
2008 it has risen by 18% in USD compared with
90% for crude. We expect the price of coal to
continue to rise in the year ahead, particularly
considering the agreements that have been
reached by the world’s largest mining companies
and steelmakers to double the price of coal. Since
coal is an essential global energy resource,
especially in Asia, higher prices will lead to higher
commodity costs for energy producers and
eventually rising energy prices for businesses and
households.
Rising metal prices and lower inventories
The price of non-ferrous metals rose by no less
than 9% in March after falling by just over 7% in
February. The price decline in the previous month
was partly due to concerns that overshadowed the
commodity market in connection with the austerity
package announced by Chinese authorities to slow
its economic expansion. Continued strong growth
numbers from the Middle Kingdom are instead
contributing to a rise in metal prices. A clear
turnaround probably is also a sign of renewed
interest in commodities among financial investors.
The price increase for metals is also the result of
the expansive economic policies still maintained by
most industrial countries and emerging economies.
Price index for Non-ferrous metals, USD
Source:Swedbank
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Index
50
75
100
125
150
175
200
225
250
275
300
325
2000=100
Nickel posted the largest gain in March (19%),
followed by copper (9.2%), aluminium (7.6%) and
zinc (5.5%). Even if the price of lead rose by a
modest 1.9%, the price level has climbed by slightly
over 75% in one year. With few exceptions the price
trend for metals has uniformly pointed upward from
the beginning of 2009, and the price index for
industrial metals is now at its highest level since
August 2008. This means that metal prices have
now returned to nearly 80% of their 2007 peak,
despite that the global economy is still growing
below its potential.
In our global economic outlook from March we
revised our GDP growth estimate upward for
emerging economies, which account for most of the
global growth increase we anticipate in 2010-2011.
The industrialisation and urbanisation process that
these countries are undergoing will keep commodity
demand strong. Demand for metals is expected to
rise among OECD countries as well following the
major slowdown in 2009. The slower inventory
build-up for copper, zinc and nickel is a sign of
fundamentally stronger demand.
Industrial production, annual change (%)
Source: Reuters EcoWin
00 01 02 03 04 05 06 07 08 09 10
%-change
-40
-30
-20
-10
0
10
20
30
40
Japan
South Korea
EMU-region
US
China
Commodity prices are also affected by the fact that
some sectors of the market are dominated by a
handful of players, which creates a risk that industry
leaders could engage in price collusion. This

3. Energy & Commodities
Monthly newsletter from Swedbank’s Economic Research Department, continued
No. 4 • 9 April 2010
3 (4)
applies, for example, to the production of oil, as well
as to iron ore. Copper is also an example, where
Chile accounts for over a third of global extraction.
It is estimated that the three largest mining
companies, based in Brazil and Australia, account
for no less than 70-75% of global iron ore trade. In
March the world’s largest mining companies and
Asia’s steel producers agreed to raise iron ore
prices in 2010 from 60 dollars to 110-120 dollars
per ton, which will lead to significantly higher
commodity costs for the steel industry. In addition to
higher production costs, global steel demand is
expected to grow, which would indicate higher steel
prices in the year ahead. Due to a sluggish global
recovery, particularly in the OECD countries, the
price increases are expected to be limited.
Rising commodity prices will test the strength of
global industry. Companies that are dependent on
steel for their production will especially feel the
effects if underlying demand remains brittle.
Retreat in food prices continues
Along with coal, food is the commodity group that
has posted the weakest price gains in Swedbank’s
commodity index in the last year. In March food
prices fell by 4.6% compared with the previous
month, with grain prices down for the third
consecutive month.
Price development for Food and Agricultural raw materials, USD
Cereals Agricultural raw materials Food
Source: Swedbank
00 01 02 03 04 05 06 07 08 09 10
2000=100
50
100
150
200
250
300
350
In addition to the weak economy, several food
categories are under pressure from excess supply,
particularly in the case of grains following last year’s
record harvests. If the grain crop planned in the
U.S. this year is realised, as American surveys
show, there is a risk of further price declines unless
the global economy grows more than expected. A
downward price trend at the same time that
production costs for fuels and fertilizer are rising
reduces the incentive to increase food production,
however. Weather-related factors could also quickly
affect the balance between supply and demand in
the short term.
Agricultural products, which include pulp, lumber
and cotton, have posted a stronger price trend. Pulp
prices have risen in the last year and in March were
slightly over 50% higher than the previous year.
High global demand and shrinking inventories in
connection with production stoppages in Finland
and Chile are driving up prices. In the short term
pulp prices could rise further if constrained supply
conditions continue.
Jörgen Kennemar

4. Energy & Commodities
Monthly newsletter from Swedbank’s Economic Research Department, continued
No. 4 • 9 April 2010
4 (4)
Swedbank Commodity Index - US$ -
Basis 2000 = 1oo 07-04-10
1.2010 2.2010 3.2010
Total index 260,6 251,3 264,6
Per cent change month ago 3,6 -3,6 5,3
Per cent change year ago 63,3 62,7 60,7
Total index exclusive energy 224,6 216,1 223,3
Per cent change month ago 2,2 -3,8 3,3
Per cent change year ago 41,3 38,8 42,2
Food, tropical beverages 228,8 218,2 208,1
Per cent change month ago 0,8 -4,7 -4,6
Per cent change year ago 20,8 17,2 14,0
Cereals 197,3 187,7 185,6
Per cent change month ago -3,6 -4,9 -1,1
Per cent change year ago -4,4 -4,4 -7,0
Tropical beverages and tobacco 255,7 243,3 225,6
Per cent change month ago 3,9 -4,8 -7,3
Per cent change year ago 39,3 31,2 24,7
Coffee 126,9 123,4 125,3
Per cent change month ago 1,5 -2,8 1,5
Per cent change year ago 17,1 14,7 18,3
Oilseeds and oil 191,4 183,8 184,9
Per cent change month ago -4,5 -4,0 0,6
Per cent change year ago 0,2 1,5 5,7
Industrial raw materials 223,4 215,5 227,7
Per cent change month ago 2,7 -3,5 5,6
Per cent change year ago 48,8 46,7 52,2
Agricultural raw materials 158,7 157,7 164,3
Per cent change month ago 1,1 -0,6 4,2
Per cent change year ago 44,5 50,8 57,2
Cotton 71,9 74,5 81,3
Per cent change month ago -3,7 3,6 9,1
Per cent change year ago 46,4 63,0 88,6
Softwood 138,6 136,4 140,8
Per cent change month ago -0,9 -1,6 3,2
Per cent change year ago 28,3 33,2 36,6
Woodpulp 814,4 840,2 877,7
Per cent change month ago 2,3 3,2 4,5
Per cent change year ago 31,7 42,3 51,7
Non-ferrous metals 237,0 219,7 239,8
Per cent change month ago 5,1 -7,3 9,1
Per cent change year ago 89,8 80,7 86,8
Copper 7385,6 6835,4 7462,4
Per cent change month ago 6,1 -7,4 9,2
Per cent change year ago 129,3 106,3 99,1
Aluminium 2235,2 2048,9 2205,6
Per cent change month ago 2,5 -8,3 7,6
Per cent change year ago 57,5 54,5 65,2
Lead 2367,7 2131,4 2171,7
Per cent change month ago 1,9 -10,0 1,9
Per cent change year ago 109,2 92,2 75,4
Zinc 2434,1 2155,2 2274,7
Per cent change month ago 2,9 -11,5 5,5
Per cent change year ago 105,0 93,9 87,0
Nickel 18434,6 18872,4 22453,4
Per cent change month ago 8,5 2,4 19,0
Per cent change year ago 63,1 81,4 131,6
Iron ore, steel scrap 350,1 351,5 355,5
Per cent change month ago 0,0 0,4 1,1
Per cent change year ago 8,1 7,8 9,5
Energy raw materials 276,6 266,9 283,0
Per cent change month ago 4,1 -3,5 6,0
Per cent change year ago 72,9 73,4 68,4
Coking coal 365,4 347,9 352,1
Per cent change month ago 19,4 -4,8 1,2
Per cent change year ago 16,5 23,3 51,2
Crude oil 272,5 263,2 279,8
Per cent change month ago 3,3 -3,4 6,3
Per cent change year ago 78,2 77,7 69,5
Source : SWEDBANK and HWWA-Institute for Economic Research Hamburg
Swedbank Commodity Index - SEK -
Basis 2000 = 1oo 07-04-10
1.2010 2.2010 3.2010
Total index 202,2 198,3 205,9
Per cent change month ago 3,6 -1,9 3,9
Per cent change year ago 44,3 38,4 34,6
Total index exclusive energy 174,3 170,5 173,8
Per cent change month ago 2,2 -2,2 1,9
Per cent change year ago 24,9 18,2 19,1
Food, tropical beverages 177,6 172,2 161,9
Per cent change month ago 0,8 -3,1 -5,9
Per cent change year ago 6,7 -0,3 -4,5
Cereals 153,1 148,1 144,4
Per cent change month ago -3,6 -3,3 -2,5
Per cent change year ago -15,5 -18,6 -22,1
Tropical beverages and tobacco 198,4 192,0 175,6
Per cent change month ago 3,9 -3,3 -8,6
Per cent change year ago 23,1 11,7 4,4
Coffee 98,5 97,4 97,5
Per cent change month ago 1,5 -1,1 0,1
Per cent change year ago 3,4 -2,4 -0,9
Oilseeds and oil 148,5 145,0 143,9
Per cent change month ago -4,5 -2,4 -0,8
Per cent change year ago -11,5 -13,6 -11,5
Industrial raw materials 173,3 170,1 177,2
Per cent change month ago 2,7 -1,9 4,2
Per cent change year ago 31,5 24,9 27,5
Agricultural raw materials 123,2 124,4 127,9
Per cent change month ago 1,1 1,0 2,8
Per cent change year ago 27,7 28,3 31,7
Cotton 55,8 58,8 63,3
Per cent change month ago -3,7 5,4 7,6
Per cent change year ago 29,4 38,7 58,0
Softwood 107,6 107,6 109,6
Per cent change month ago -0,9 0,1 1,8
Per cent change year ago 13,4 13,4 14,4
Woodpulp 632,0 663,0 683,1
Per cent change month ago 2,3 4,9 3,0
Per cent change year ago 16,4 21,1 27,1
Non-ferrous metals 183,9 173,4 186,6
Per cent change month ago 5,1 -5,7 7,6
Per cent change year ago 67,7 53,8 56,4
Copper 5731,9 5394,0 5807,7
Per cent change month ago 6,1 -5,9 7,7
Per cent change year ago 102,7 75,5 66,7
Aluminium 1734,7 1616,8 1716,5
Per cent change month ago 2,5 -6,8 6,2
Per cent change year ago 39,2 31,5 38,3
Lead 1837,5 1682,0 1690,1
Per cent change month ago 1,9 -8,5 0,5
Per cent change year ago 84,9 63,6 46,9
Zinc 1889,1 1700,7 1770,3
Per cent change month ago 2,9 -10,0 4,1
Per cent change year ago 81,2 65,0 56,6
Nickel 14306,9 14892,8 17474,6
Per cent change month ago 8,5 4,1 17,3
Per cent change year ago 44,1 54,4 94,0
Iron ore, steel scrap 271,7 277,4 276,7
Per cent change month ago 0,0 2,1 -0,3
Per cent change year ago -4,5 -8,3 -8,3
Energy raw materials 214,6 210,6 220,2
Per cent change month ago 4,1 -1,9 4,6
Per cent change year ago 52,8 47,5 41,0
Coking coal 283,6 274,5 274,0
Per cent change month ago 19,4 -3,2 -0,2
Per cent change year ago 2,9 5,0 26,6
Crude oil 211,5 207,7 217,8
Per cent change month ago 3,3 -1,8 4,8
Per cent change year ago 57,5 51,3 41,9
Source : SWEDBANK and HWWA-Institute for Economic Research Hamburg
Swedbank
Economic Research Department
SE-105 34 Stockholm, Sweden
Phone +46-8-5859 1028
ek.sekr@swedbank.se
www.swedbank.se
Legally responsible publisher
Cecilia Hermansson, +46-88-5859 1588.
Magnus Alvesson, +46-8-5859 3341
Jörgen Kennemar, +46-8-5859 1478
Swedbank’s monthly Energy & Commodities newsletter is published as a service to our
customers. We believe that we have used reliable sources and methods in the preparation
of the analyses reported in this publication. However, we cannot guarantee the accuracy or
completeness of the report and cannot be held responsible for any error or omission in the
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monthly Energy & Commodities newsletter.