COMMODITY RESEARCH

The price forecasts for the individual commodities within the research coverage are prepared with the greatest care and taking into account all relevant facts identifiable at the corresponding point in time. The analysts have a deep knowledge of the market, which allows them to make a qualified judgement, including of non-quantifiable influences.

Various analytical approaches or a combination thereof are used to prepare the forecasts for individual commodity markets.

Fundamental analysis: By far the most important (fundamental) component for the preparation of price forecasts for commodities is the relationship between supply and demand in the corresponding commodities market (i.e. relative scarcity). In order to be able to track this relative scarcity and its development, commodity research has developed corresponding supply and demand models for each individual commodity market that it tracks. These models are subjected to continuous updates, modifications and further development. Relevant influences on supply and demand models are captured as soon as possible. They are then analysed and priced into the models whereby high-frequency data are used to ensure that the input to the models is up to date. In addition, econometric models developed by commodity research itself are used to prepare the price forecasts. On the basis of this model-oriented fundamental-analytical approach, the goal of commodity research is to provide internal and external customers with forecasts that are as precise as possible with regard to the expected direction of movement of the corresponding commodity prices.

Relative value analysis: Relative value analysis makes use of the historical prices of two (or more) commodities in order to ascertain whether a commodity is to be regarded as cheap or dear in relation to the selected reference commodities and whether the prevailing fundamental data (e.g. short term market shortages) adequately explain any relative price anomalies.