高盛-商品市场展望-做多大宗商品的三个

12November2023|5:05PMEST

CommodityViews

2024Outlook:ThreeReasonstoGoLongCommodities

nWerecommendgoinglongcommoditiesin2024,asweexpectsomewhathigherspotcommodityprices,strongcarry,andseehedgingvalueagainstgeopoliticalsupplydisruptions.Weforecasta21%GSCI12Mtotalreturn.

nWebelievethatafadingmonetarypolicydrag,recedingrecessionfears,and

reducedindustrialdestockingwillsupportdemandandspotpricesin2024.WenowforecastBrenttorisetoa2024averageof$92/bbl(vs.$98prior)given

supplybeats,withpricesbackuptothehigherendofthe$80-100range.

nWeexpectstructuralsupporttocommodityreturnsfromOPECcarry,refinerytightness,andgreenmetalsdemand.OPECpricingpowershoulddrivecarryasgentlydeclininginventorieskeepthemarketbackwardated,whilerefining

underinvestmentsupportsproductprices.ButelevatedOPECsparecapacityisalsolikelytolimittheupsidetospotprices.

nInmetals,rapidlyrisinggreendemandandpeakingsupplysetsthestageforasharptighteningincopperandaluminumintomid-decade,drivingscarcity-drivenpriceappreciationfromH2.Thatsaid,afinalgaspofcoppersupplyaccelerationinH1contributestoourmoderatedfullyearpriceaverageof$9,200/t(vs.

$12,000/tprior),leaving25%of12Mspotpriceupside.

nSupplydisruptions,acolderwinter,andreducedconservationareupsideriskstoourforecastofflatwinterEuropeangasprices.Weakermanufacturingorhigheroilsupplyaredownsideriskstoourconstructiveview.WearebearishonUS

naturalgas(no2024netdemandgrowth)andbatterymetals(supplyglut).

nTopTrades:

o2024Deficits:LongGSCIenergyexUSnaturalgas,longGSCIindustrialmetalsexnickel,zinc

oOPECPowerRange:ProfitswithJun24Brentina73-112range

oEuropeanWinterRisk:LongFeb24TTF

oNewvs.OldEconomyMetals:Longcopper,aluminumvs.shortnickel,zinc

SamanthaDart

+1(212)357-9428|

samantha.dart@

GoldmanSachs&Co.LLC

DaanStruyven

+1(212)357-4172|

daan.struyven@

GoldmanSachs&Co.LLC

()l4S-|don

nicholas.snowdon@

GoldmanSachsInternational

CallumBruce,CFA

+1(212)902-3053|

callum.bruce@

GoldmanSachs&Co.LLC

DanielMoreno

+1(212)934-1001|

daniel.moreno@

GoldmanSachs&Co.LLC

AditiRai

+44(20)7774-5179|

aditi.rai@

GoldmanSachsInternational

HongcenWei

+1(212)934-4691|

hongcen.wei@

GoldmanSachs&Co.LLC

YuliaZhestkovaGrigsby

+1(646)446-3905|

yulia.grigsby@

GoldmanSachs&Co.LLC

LaviniaForcellese

+44(20)7774-9243|

lavinia.forcellese@

GoldmanSachsInternational

BlakeWoods

+1(972)368-9739|

blake.woods@

GoldmanSachs&Co.LLC

ThisreportisintendedfordistributiontoGSinstitutionalclientsonly.

Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html.

CommodityViews

GoldmanSachs

2024Outlook:ThreeReasonstoGoLongCommodities

Werecommendgoinglongcommoditiesin2024,asweexpectsomewhathigherspotcommoditypricesfromanimprovingcyclicalbackdrop,significantcarryreturnsfromstructuraltailwinds,andseehedgingvalueagainstnegativesupplyshocks.

WeforecastGSCItotalreturnsoverthenext12monthsof21%(

Exhibit1

),with

significantcontributionsfromhigherspotprices(10%),rollreturns(4%),andcollateralreturns(5%).Morespecifically,weexpectoil,oilproductsandseveralindustrialmetalstobestleveragecyclicalandstructuralsupporttogeneratereturnsin2024.Accordingly,werecommenda‘2024Deficits’basket,definedasgoinglongtheGSCIEnergyIndexexcludingUSnaturalgas(weforecasta34%12Mreturn)andlongtheGSCIMetals

Indexexcludingnickelandzinc(25%12Mreturn)1.

Exhibit1:WeForecastan21%GSCI®12MReturn

S&PGSCICommodityIndex

DollarWeight

HistoricalPerformance

GSForecast

2021

2022

2023*

3m

6m

12m

S&PGSCI

100.0

40.4

26.0

-0.8

4.9

12.9

20.9

Energy

59.4

60.7

42.3

0.8

7.8

19.6

30.9

Energyex.NaturalGas

56.1

62.5

43.8

4.8

9.4

22.4

33.8

IndustrialMetals

10.1

29.6

-7.6

-9.2

3.0

6.0

17.8

IndustrialMetalsex.Nickel&Zinc

8.4

30.3

-12.8

-3.4

3.9

9.6

25.3

PreciousMetals

5.2

-5.1

-0.4

4.5

4.7

5.0

4.7

Agriculture

17.5

24.7

12.1

-5.5

-1.6

1.0

-0.5

Livestock

7.8

7.9

4.8

4.2

-0.6

2.8

7.7

*YTDreturnsthroughNov10,2023

Note:Givenwedonotcurrentlycoveragricultureandlivestock,weestimatespotreturnsasreturnsimpliedbyforwardsadjustedwiththehistoricalmedianriskpremium.Weestimaterollreturnsbasedonseasonaltimespreadsandthe

currentfuturescurveshape.

Source:GoldmanSachsGlobalInvestmentResearch

Exhibit2:CommoditiesTopTradeIdeasfor2024

Trade

Description

Rationale

2024Deficits

a.LongGSCIenergyexcludingUSnaturalgas(50%).

b.LongGSCIindustrialmetalsexcludingnickelandzinc(50%).

Weseeoil,oilproducts,andseveralindustrialmetalsasbestpositioned

tobenefitfromasupportivecyclicalbackdropandstructuralfactorsincludingOPECpricingpower,refinerytightness,andgreenmetalsdemand.

OPECPowerRange

ShortaBrentJun2480-100strangle,longaJun24

90-95call-spread,long2xaJun24150call.

Webelieveoilpriceswillremainsustainedina$80-100rangesupportedbysoliddemand,lowOPECsupply,andmodestdeficits,withamplesparecapacitylimitingupsidefromthoselevels.Wealsoseevalueintail

hedgesagainstsharppriceincreasesfromgeopoliticaldisruptions.

EuropeanWinterRisk

LongFeb24TTFnaturalgas.

Weseeupsiderisksaroundnaturalgaspricesfromweather,supplydisruptions,andpotentialescalationofgeopoliticalrisks.Notably,

tighteningshocksmaydriveTTFpricesincentivizeswitchingvs.oilproductsinthe70-100EUR/MWhrange.

LongNewEconomyShortOldEconomyMetals

Longcopper,aluminumvs.shortnickel,zinc.

Weexpectbifurcatedperformancebetweenmetalswithstructurallybullishneweconomyfundamentalslikealuminumandcopper,andthosewith

persistentsupplydrivensurplustendencieslikenickelandzinc.

Source:GoldmanSachsGlobalInvestmentResearch

1Inourforwardreturncalculation,energyex.naturalgasincludesBrent,WTI,RBgasoline,anddiesel.Industrialmetalsex.nickelandzincincludescopperandaluminum.

12November20232

CommodityViews

GoldmanSachs

GS

BloombergConsensus

September2023:Loweredto15%onContinuedPositive LaborMarketandInflationNews

March2023:Raisedto35% onBankingStress

June2023:

Loweredto25%onRecedingDebtLimitandBanking

Risks

une2022:edto30%onHigherInflation

x

July2023:Loweredto20%on

DisinflationProgress

Loweredto25%

onLaborMarketAdjustment

JRais

April2022:

LaunchedGS

Trackingat15%

October2022:

Raisedto35%

onHawkishFed

February2023:

Reason1:CyclicalSupport:MonetaryPolicyDragandRecessionFearsFade;ManufacturingInitiatesaRecovery;ResilientServices

Followingthelatestoilselloff,theGSCItotalreturnindexisroughlyflatYTD,on

concernsaboutdemandfromratehikes,somerenewedrecessionfears,manufacturingdestocking,andonoilsupplybeats.We,however,believethatafadingmonetarypolicydrag,recedingrecessionfears,reducedindustrialdestocking,andongoingresilienceinservicesactivitywillsupportcommoditiesdemand,andspotprices.

FadinginMonetaryPolicyDragandRecessionFears

OureconomistshavelongarguedthatagradualunwindoftheCovid-relateddriversofthisdifferentinflationcyclemeantthatcentralbankswouldmanagetosharplyreduceinflationwithoutarecession.Andwhilethisviewhasthusfarprovencorrect,and

pricingofrecessionriskacrossassetmarketshasfallensignificantlysinceApril,itisonlyrecentlythatconsensusrecessionprobabilityestimateshavemovedbelow60%

(Exhibit3)

.

Exhibit3:AGrowingConfidenceThattheUSEconomyWillAvoidRecession

PercentUS12-MonthAheadRecessionProbabilityPercent

100

80

60

40

20

0

100

80

60

40

20

0

Mar-22Jun-22Sep-22Dec-22Mar-23Jun-23Sep-23

Source:Bloomberg,GoldmanSachsGlobalInvestmentResearch

Goingforward,webelievethatmorecoredisinflationimpliesthattheFedandECBaredonehiking,thatrealdisposableincomewillrise,andthatcentralbankswillbe

increasinglywillingtodeliverinsurancecutsifgrowthweretoslow.ThisallsupportsourbeliefthatthedragfromfinancialconditionsonGDPgrowthiseasing(

Exhibit4

),whichinourviewwillsupportcommoditiesdemandgrowth.

12November20233

CommodityViews

GoldmanSachs

Exhibit4:AFadingDragonGDPGrowthFromMonetaryPolicyintheUSandEurope

points,

Percentage

points,

Percentage

annualrateEffectofFinancialConditionsonRealGDPGrowthannualrate

0.5

0.0

-0.5

-1.0

-1.5

-2.0

(3QuarterCenteredMovingAverage)

USEuroArea

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

202220232024

0.5

0.0

-0.5

-1.0

-1.5

-2.0

Source:GoldmanSachsGlobalInvestmentResearch

TurninIndustrialandInventoryCycle

Abroadmanufacturingdestockingprocesshasactedasasignificantheadwindto

industrialcommoditiesdemandandpricesthisyear,especiallyacrossnaturalgasandmetals.Thisprocessstartedwithasharpriseinfinishedgoodsinventories,whichhasnowlastedforovertwoyears(

Exhibit5

).Thisrisewasdriveninitiallybythepost-Covidgoods-to-servicesconsumptionrotationandsupply-chainimprovements,andthen

exacerbatedbythehittorealconsumptionfromhighinflation,highinterestrates,andtightfinancialconditions(

Exhibit6)

.

12November20234

CommodityViews

GoldmanSachs

Exhibit5:TheRiseinFinishedGoodsInventoriesHasDepressedEnergyIntensiveIndustrialProductionin

Europe

Stocksoffinishedgoods(%balance,left),andEUenergyintensiveindustrialproduction(index,right)

25

20

15

10

5

0

-5

-10

StocksofFinishedProducts(left)EUEnergyIntensiveIP(right)

120

115

110

105

100

95

90

85

80

200020022004200620082010201220142016201820202022

Source:HaverAnalytics,EuropeanCommission,Eurostat,GoldmanSachsGlobalInvestmentResearch

FearsthatEurope’senergycrisiswouldcausearationingofgassupplyintensifiedthe

preemptiveaccumulationofgoods.This,inturn,incentivizedwholesalersto

aggressivelydestockonprimaryindustrialproducts,heavilydepressingdemandforenergyintensivegoodsatthetopofthesupplychain,includingchemicals,metals,paper,glassandothers.

Thisdestockingprocessloweredindustrialdemandfornaturalgasfurtherin2023,in

boththeUSandEurope.InEurope,thiskeptdemandforgasespeciallylowthisyear,

becauseexceptionallyhighgaspriceshadalreadydepressedenergy-intensiveindustrialmarginsand,asaresult,activitylevels.Themetalsspace,whichisleveredtothegoodssectorintermsofimmediatephysicaldemand,wasalsodirectlyimpacted,withhigh

interestratesdepressingdownstreamdemand,giventherelativelyhighcapitalintensityofmetalusesectors,whilereinforcingthedestockingeffectwithgenerallynegative

carryeconomicsformajormetals.

Nonetheless,aswelookinto2024,thereissomecauseforcautiousoptimismasthedestockingheadwindfades.EuropeanconsumermajorpurchasesandexportstoChina,twoimportantdriversoffinishedgoodsinventories,havehaltedtheiryoydeclines

(Exhibit6

),andshouldrisefurtherasEuropeanrealdisposableincomeandChinamanufacturingrecover,withChinabenefitingfrompolicystimulus.

12November20235

CommodityViews

GoldmanSachs

Exhibit6:StabilizingFinancialConditionsShouldReducetheUpwardPressureonFinishedGoodsInventories

Changeinfinishedgoodsinventories(%balance)andmodelcontributionbyfactor,yoychange

ConstantConsumermajorpurchases(lagged)RealexportstoChina

20

FCIResidualFinishedgoodsinventories

15

10

5

0

-5

-10

-15

-20

0708091011121314151617181920212223

Source:EuropeanCommission,Eurostat,HaverAnalytics,GoldmanSachsGlobalInvestmentResearch

Wealsoseesignsofaturninthedestockingcyclefromourconversationswithseveralindustrialusersofgasandpower,includingmetalscompanies,whichhavesuggestedthatdownstreamdemandhasstabilized.Further,high-frequencydataonindustrial

demandforgasinNorthWestern(NW)EuropeshowsdemandhasbeenupyoysinceAugustandincreasingthatgaininto4Q23(

Exhibit7)

.

Exhibit7:EuropeanNaturalGasIndustrialDemandIsPickingUp

NWEuropeindustrialdemandforgas,mcm/d

350

300

250

200

150

100

50

20202021202220232017-2021avg.

JanFebMarAprMayJunJulAugSepOctNovDec

Source:Bloomberg,GoldmanSachsGlobalInvestmentResearch

12November20236

3

3

2

2

1

1

0

0

-1

-1

-2

-2

-3

-3

OECDEurope

TotalChangeinOilDemand

-4

-4

Importantly,highinterestratescontinuetoposeaheadwindtoconsumerdemandaswellastoarestockingprocessthatwehaveyettosee.Buteventhere,weexpect

conditionstoimprove.IfUSandEuropeanrateshaveindeedpeakedasoureconomistsbelieve,thissuggestsyoychangestofinancialconditionswillsoftensignificantlyaswe

gothrough2024,furthercontributingtoayoyrecoveryindemandformanufacturing-drivencommoditieslikenaturalgasandmetals.

SolidDemandtoPushBrentBackinHigherEndofthe80-100Range

Incontrasttoweakdemandforindustrialcommoditiesformuchof2023,whichwe

expecttobegintorecover,demandforcommoditiesmoreexposedtoservicesactivitysuchasoilhasbeensolid,especiallyinemergingmarkets.

Whilereneweddemandfearshaveagaincontributedtothenearly$10/bblselloffover

thepasttwoweeks,oildemandhasbeenstrongin2023,andislikelytoremainsolidin2024onrobustservicesactivity.Infact,weestimatethatoildemandgrowthof2.5mb/dthisyearisontracktoexceedtheIEAandevenourownoptimisticexpectationsasofayearagoby800and500kb/d,respectively.Welookforamoderationinoildemand

growthtoastillsolid1.6mb/din2024givenabove-consensusglobalGDPgrowth,structuralincreasesinoildemandacrossEMs(

Exhibit8

,leftpanel),andanongoingrecoveryinAsianjetfueldemand.

Exhibit8:EMOilDemandRisesFurther;USProducersRemainCapitalDisciplined

mb/dCumulativeChangeinOilDemandSince2023Q4mb/d

China

India

MiddleEast

RestofNon-OECD

RestofOECD

US

Q4

2022

Q1

Q2Q3

2023

Q4

Q1

Q2Q3

2024

Q4

Q1

Q2Q3

2025

Q4

Percent

Percent

ReinvestmentRate:CapexasaShareofOperatingCashFlowofUSPublicOilProducers

160

140

120

100

80

60

40

20

0

Estimate

160

140

120

100

80

60

40

20

0

Source:IEA,Kpler,JODI,EIA,NationalSources,Companydata,GoldmanSachsGlobalInvestmentResearch

Thisongoingresilienceindemandwillcontributetoarecoveryinoilprices,inourview,althoughwenowlookforaloweroilpricepeak.Thisadjustmentreflectsthehitto

heatingdemandfromawarmQ4,andupsidesurprisestoourOECDcommercial

inventoriesnowcast,andtosupplyinBrazil,Canada,andNorwayandafewOPEC

producers,includingVenezuelaandNigeria.Takentogether,wenowforecastBrenttorisetoa2024averageof$92/bbl(vs.$98prior)withapeakinAugustof$95/bbl.

Tobeclear,wecontinuetobelievethatrobustdemand,slowingUSsupplygrowth,andlowOPECsupplytogetherimplyamodest2024deficit,andgentlydeclininginventories.Evidenceofreneweddeclinesininventories,andarecoveryindepressedpositioning

12November20237

CommodityViews

GoldmanSachs

arelikelytopushoilpricesbackuptothehigherendofthe$80-100/bblOPECsweetspotrangein2024,withourbaselineforecastclearlyabovetheforwards(

Exhibit9)

.Specifically,weestimatethatthedeficitwillaverage0.7mb/din2024(vs.0.8mb/d

previously),drivenby1.6mb/dhigherdemandyoy,whileslowinggrowthfromcapitaldisciplinedUSproducers(

Exhibit8

,rightpanel),andanonlygradualreturnofOPECsupplylimitssupplygrowthat1.3mb/dyoy.

Exhibit9:WeExpectBrenttoRiseAgaintotheHigherEndofthe$80-100/bblRangein2024,AbovetheFutures

$/bbl

BrentPricewithGSForecast

$/bbl

140

120

100

80

60

40

20

RealizedBrentPrice

Forecast

Futures

LikelyRange:$80-100

140

120

100

80

60

40

20

Jan-18Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-25Jan-26

Source:ICE,GoldmanSachsGlobalInvestmentResearch

Lookingatpricingacrossthecomplex,webelieveamoresupportivedemand

environmentisalreadypricedinEuropeannaturalgas(TTF)–evenifthecurvepresentlyembedsnoriskpremiumbeyondthat.However,inoil,gasoline,andgreenmetalsthe

tighteningweexpectisnotfullyreflectedincurrentmarketprices.Ultimately,we

believethatthejustover$10/bblupsideweseeforoiland25%and15%ofupsideweseeforcopperandaluminumwillhelpdrivespotreturnsincommoditiesof10%overthenext12months.

12November20238

CommodityViews

GoldmanSachs

Reason2:StructuralSupportfromOPECCarry,RefiningTightness,andGreenMetalsDemand

Inadditiontocyclicalsupportfromabove-consensusglobalGDPgrowthandanascentrecoveryinmanufacturing,wealsoexpectstructuralsupporttocommodityreturnsfromOPEC-drivencarry,refinerytightness,andstronggreenmetalsdemand.

OPEC-DrivenCarry

Whiletimespreadshavebeenvolatile,webelievethatOPEChasbeentargetinghigh

timespreadsandlowinventorieswithitsproductioncutsoverthelastyear,andwill

continuetodosoin2024byassertivelyexercisingitshigher-than-usualpricingpower.ThisstructuralriseinOPEC’sabilitytoraisepriceswithouthurtingitsdemandtoomuchreflects1)theriseinmarketsharethroughtheformationofOPEC+,and2)thefallin

thepriceelasticityofnon-OPECoilsupply,includingforUSshale,givenincreasedfinancialdiscipline(

Exhibit10)

.

Becauseofthereducednon-OPECsupplyresponsetoproductioncuts,weestimate

thatOPECgroupcutsnowboostSaudioilprofits.Asaresult,SaudiArabiaandtheother8OPEC+countries,whichcutproductionby1.7mb/dinApril,arelikelytokeeptheir

groupcutfullyinplacein2024.WenowassumethatSaudiArabiaunwindstheextra1mb/dunilateralcutonlygraduallystartingin2024Q3(vs.2024Q2previously)by

0.25mb/deverytwomonthsbecauseitsappearsdeterminedtolowerinventoriesandsupportelevatedfundingneeds.OurforecastforlowOPECsupplyisalsoconsistentwithourstatisticalfindingthatthegroupisinnorushtoboostproductionbecause

commercialOECDstocksremainonlymodestlybelowtheirhistoricalaverage.

ThissupportsourviewthatOPECwillkeepthecurvebackwardatedin2024by

leveragingrobustdemandgrowth.Asaresult,weanticipatethatanelevated12%rollreturn(“carry”)willbealargecontributortoourforecastofa36%totalreturnfor

investinginBrentfuturesoverthenext12months(

Exhibit11)

.

Exhibit10:WeEstimateThatItWouldBeProfitableForSaudi

ArabiatoMaintainIts500kb/dContributiontotheApril2023GroupCutin2024AsaResultofHighPricingPower

PercentEstimatedEffectofSaudiOilProductionCutsin2024Percent

15

10

5

0

-5

-10

-15

Maintain500kb/dCutasPartof1.7mb/dGroupCutExtendBilateral1mb/dExtraCut

SaudiOil

Brent

Saudi

Crude

OilPrice

Profits

Output

15

10

5

0

-5

-10

-15

Source:OPEC,ICE,GoldmanSachsGlobalInvestmentResearch

Exhibit11:A12%RollorCarryReturnOvertheNext12MonthsFromInvestinginBrentFutures

Brenttotalreturnforecastsandcomponentcontribution,%

40%

35%

30%

25%

20%

15%

10%

5%

0%

PriceReturnRollReturnCollateralReturnTotalReturn

3m6m12m

Note:Totalreturniscomputedastheproductofprice,roll,andcollateralreturnwhilethebarsizeindicateseachindividualcomponent.

Source:GoldmanSachsGlobalInvestmentResearch

WhilethesignificantsparecapacitygeneratedbyOPECcutsimpliesthattheOPECput

12November20239

CommodityViews

GoldmanSachs

islesspowerfulthanayearago,wethinktheOPECputremainsinplace.Webelieve

thatOPECislikelytobringbackitsbarrelstothemarketevenmoreslowlyifnon-OPECbalancerealizesofterthanourbaseline.Nevertheless,elevatedOPECsparecapacityisalsolikelytolimittheupsidetospotoilprices,andeffectivelydelaysthenextoilsupercycle.

RefiningTightness

Whilethereisamplesparecapacityinupstreamcrudeoilproduction,thedownstreamrefiningsystemremainsthetightestsectoroftheoilindustryimplyingpersistently

elevatedrefinedproductmarginsandtimespreads.

Weestimatethattheglobalrefiningutilizationratesitsinpercentile90ofhistory.

Refiningistightbecauseofc.7mb/dofdisruptionsandpandemic-relatedclosuressincethelate2010s.Incontrast,globaldemandhasreachedanalltimehigh,leaving

utilizationratesc.3-4p.p.abovemid-cyclenorms.Whileweexpectsomeincremental

easing,utilizationrateswillremainstructurallyelevated(barringarecession)incomingyears.

Thekeyreasonforthisstructuraltightnessisthatelevatedlong-rundemanduncertaintydiscouragesinvestmentinrefiningcapacity.Afterall,refineriesareverylong-cycle

investments,withthemedianDMrefinerynowbeing50yearsold(

Exhibit12)

.

Exhibit12:HighUtilizationRatesandOldRefinieriesShowtheLong-CycleRefiningSystemIsStructurallyTight

MedianRefineryAge

Age

Age

60

50

40

30

20

10

0

GlobalDMEM

60

50

40

30

20

10

0

Source:IEA,BP,IIR,OGJ,GoldmanSachsGlobalInvestmentResearch

Weexpectelevateddieselmarginstonarrowmodestly,broadlyinlinewithforwards.

Meanwhile,weexpectgasolinerefinerymarginstorecoverasrefinersswitchsupply

fromgasolinetodiesel,anddepressedgasolinepositioningrecovers,beforeoctane

constraintsonceagaindictateasummerspike.Asaresult,weexpectUSretailgasolinepricestorisebackto$3.85/galinSum2024from$3.50/galcurrently.

GreenMetalsDemand

Turningtotheindustrialmetalscomplex,oneofthemostremarkabletrendssofarthis

12November202310

CommodityViews

GoldmanSachs

yearhasbeenthecontinuedstrengthinChina’smetalsdemand(ex-steel),despitedomesticpropertyandglobalmanufacturingheadwinds.Indeed,onshoreapparentrefineddemandforaluminium(+5%y/yYTD)andcopper(+10%y/yYTD)haverisensubstantiallyaheadofexpectations(

Exhibit14)

.

Exhibit13:SurgingChinaDemandforMostCommoditiesthisYear

Exhibit14:China’sApparentDemandforAluminiumandEspeciallyCopperHasGrownatRobustRates(EvenLargelyBeforethe

CurrentPolicyEasingPhase)

%shareofglobaldemand

YoYgrowthYTDChinademandgrowth

20%

15%

10%

5%

0%

-5%

China's

(RHS)

shareofglobaldemand

80%

60%

40%

20%

0%

-20%

SteelAluminiumOil

LHSchart:TheYTDChinademandgrowthreferstoaluminiumandcoal,whileitincludesOctober2023averageofYoYChinademandgrowththroughQ3

Coal

LNG

Copper

January-September2023forcopper,

forLNGandsteel.Asforoil,theYTDisan

Source:GoldmanSachsGlobalInvestmentResearch

YoYgrowth

Chinaapparentdemand(yoy,3mmov.avg)

25%20%15%10% 5% 0% -5%-10%-15%

-20%

Aluminium

Copper

Steel

Source:GoldmanSachsGlobalInvestmentResearch,Wind

Underpinningtheseonshoredemandtrendshasbeenthesignificant,structuralstrengthinChina’sgreeneconomy,withmarkedgrowthinrenewablesandEVs.Themost

significantstrengthhascomefromajumpinsolar-relateddemand(+145%y/yYTD)

whileEVshaveturnedoutlessimpressivethanlastyear.Thisgreendemandboosthasbeenasignifi