Euler Hermes ACI Issues 2006 Commodities Forecast

Owings Mills, MD (PRWEB) March 24, 2006

Global trade credit insurer Euler Hermes – the partner for credit management solutions – has issued a favorable global commodities forecast for 2006. Economic analysis from the world’s leading trade credit insurer calls for commodities to stabilize in 2006 as the demand-related overheating in commodity prices run up against limits throughout the year.

According to the report – published in the latest issue of the Euler Hermes Economic Outlook – households in the United States, the leading world consumers, are likely to stop dipping into their “nest eggs” to absorb higher costs arising from increased oil prices. With a negative U.S. savings rate and a cooling housing market, the deceleration in American domestic demand should correspondingly slow production in Asian countries – production that is mainly directed toward exports.

Dan North, Chief Economist for the North American subsidiary Euler Hermes ACI, offered his commentary on the forecast, saying that energy costs are taking a “healthy bite” out of the nation’s economy. “Although the rapid rise in energy prices has moderated recently, crude oil and gasoline prices still remain elevated,” he said. Crude oil is up 27% from a year ago, and 79% from two years ago. Similarly, gasoline is up 23% and 45% over one and two years. North added, “While there are refrains of ‘it’s different this time,’ two facts are worth noting. First, U.S. consumption of all petroleum products as a percentage of GDP is higher than it was during the energy crises of the ’90s and early ’00s, and it is the highest it has been in 20 years. Second, the United States is importing more than twice the amount of crude oil that it produces. In theory that shouldn’t matter in an open global market, but the stability of that open global market is in question.”

Euler Hermes economic analysis is predicting the overall CRB index of commodities will steady, rising by just 5%, along with a continued slight fall in oil prices.

The following are forecasts for the individual commodities markets, taken from the Economic Outlook:

Precious metals

Gold: +14% on annual average

Silver: +15% on annual average

Major Metals

Aluminum: +22% on annual average

Copper: -4% on annual average

Zinc: +36% on annual average

Nickel: -2% on annual average

Steel and Coal

Steel: -19% on annual average

Coal: -20% on annual average

Agricultural Raw Materials

Grains: +4% on annual average

Sugar: +18% on annual average

Coffee: +11% on annual average

Cocoa: +3% on annual average

Agroindustrial Raw Materials

Cotton: +10% on annual average

Wool: -7% on annual average

Pulp: -3% on annual average

Natural rubber: +51% on annual average

Energy

Petroleum: -1% on annual average

Gas: 0% on annual average

Petroleum Derivatives

Ethylene: +7% on annual average

Propylene: +3% on annual average

Note: In-depth analysis of the above sector forecasts is available.

The Euler Hermes Economic Outlook publication is available upon request from Euler Hermes ACI. For more information on Euler Hermes ACI products and services, visit http://www.eulerhermes.com/usa.

Euler Hermes is the worldwide leader in credit insurance and one of the leaders in bonding and guarantees. With 5,400 employees in 41 countries, Euler Hermes offers a complete range of services for the management of customer receivables. The North American subsidiary (Euler Hermes ACI) is headquartered in Owings Mills, MD. For more information visit http://www.eulerhermes.com/usa.

Euler Hermes, a subsidiary of AGF and a member of Allianz, is listed on Euronext Paris. Standard & Poor’s rates the group and its principal credit insurance subsidiaries AA-.

Press Contact:

Rick Ostopowicz

Euler Hermes ACI Public Relations and Communications Specialist

Phone: (410) 753-0652

These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements:

Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words ‘may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue’ and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults (vii) interest rate levels, (viii) currency exchange rates including the Euro-U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

The matters discussed herein may also involve risks and uncertainties described from time to time in Allianz AG’s filings with the U.S. Securities and Exchange Commission. The Group assumes no obligation to update any forward-looking information contained herein.

###