DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS. CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION® Client-Driven Solutions, Insights, and Access Commodities Advantage: Attracting Attention Commodities Research In this issue Natural Gas: The June NYMEX Henry Hub (HH) futures contract settled last week, ending with an average of $4.51/MMBtu. Marking to market, we now have a quarterly average price of ~$4.56/MMBtu, -$0.34/MMBtu (-6.9%) below our forecast from late March (page 7). Gold: The price of gold slipped by around 3% in May, ending the month below US$1,250/oz, the first time it had fallen below that level since mid-February. That in itself is not a particularly noteworthy move but it came against the background of a number of factors that might have grabbed attention in support of prices for the precious metal. There will need to be a much more meaningful pick-up in physical demand than we expect if gold is to hold above last year's low (page 9). Base Metals: Copper's gentle price recovery came to a halt this week, with intrigue over copper financing once again coming to the fore. Prices have dipped back below the US$6,800/t level as official probes into potential multiple pledges of metals for loan collateral sparked fresh fears of distress selling of commodities tied up in financing deals in the soon-to-be-listed port of Qingdao in eastern China (page 11). Iron Ore: The forward curve will continue to shift and twist with cyclical moves but 2014 should herald the end of iron ore’s structural backwardation. A flatter curve, in slight contango, should soon be the new norm as excessive supply washes through the physical market (page 13). Focus: Petroleum demand gets our attention While oil market sentiment and positioning appear to have turned materially less bearish than at the turn of the year, many seem to blame the conflict in Libya, setbacks in Iraq and anxiety over events in Ukraine for keeping Brent prices in a tight range near $110/b. However, we think that there are also more structurally significant reasons for today’s tight supply/demand balances and believe that the demand side of the equation deserves attention (page 3). Macro: Rumbling along A small miss on the Markit-HSBC China manufacturing PMI – 49.4 against flash and consensus of 49.7 – disappointed some commodity markets this week but the series still registered a marked improvement from April's final reading of 48.1. The latest data support our view that China is on a steady, albeit unexciting, growth trajectory in 2014. Meanwhile, the US looks set to remain the vanguard for global IP momentum (page 14). Research Analysts Marcus Garvey +44 20 7883 4787 marcus.garvey@credit-suisse.com Tom Kendall +44 20 7883 2432 tom.kendall@credit-suisse.com Bhaveer Shah +44 20 7883 1449 bhaveer.shah@credit-suisse.com Andrew Shaw +65 6212 4244 andrew.shaw@credit-suisse.com Jan Stuart +1 212 325 1013 jan.stuart@credit-suisse.com Johannes Van Der Tuin +1 212 325 4556 johannes.vandertuin@credit-suisse.com 05 June 2014 Fixed Income Research http://www.credit-suisse.com/researchandanalytics 05 June 2014 Attracting Attention 2 Table of Contents Table of Contents 2 Focus – Petroleum Demand 3 Recent tendencies and a conservative forecast 3 Natural Gas 7 Closing out Q2 2014 7 Gold 9 Struggling for traction 9 Base Metals – Headwinds Reappear 11 Copper financing probe hits sentiment 11 Iron Ore 13 The end of structural backwardation 13 Macro View: 14 Rumbling along 14 Commodity Investment Flows 17 Trade Recommendations 20 05 June 2014 Attracting Attention 3 Focus – Petroleum Demand Recent tendencies and a conservative forecast While oil market sentiment and positioning look to have turned materially less bearish than at the turn of the year (Exhibit 2), any bullishness remains quite fragile. Many seem to blame the conflict in Libya, setbacks in Iraq and anxiety on Ukraine for keeping Brent prices in a tight range near $110/b. We think that there are also more structurally significant reasons for today’s tight S/D balances. So, while we have repeatedly drawn attention to the supply side to support our argument, we also believe that the demand side deserves attention.  In this Focus piece we highlight trends in the monthly demand data that support our generally more constructive view of oil prices, and add to our sense that, in fact, price risks relative to our quarterly average forecast of $110/b Brent in Q3, continue to shift to the upside – see Commodities Advantage: Glass Half Full and our recent conference call, Ideas that Lead: A Hot Summer Ahead for Crude Oil. Exhibit 1: Tight futures markets 1-6 this year vs. last Ex