OREANDA-NEWS. December 23, 2011. In this last issue of Aton Metalwatch for 2011 we take stock of the year that was and try to anticipate what the start of 2012 could bring. In 2011 the market capitalisation of sector firms broke away from the positive dynamics set in 2009-10, with companies at times suffering significant declines. As a result, looking at the sector’s five-year performance, we see that certain segments have done little to generate shareholder returns. The steel and pipes subsector suffered the worst decline, losing almost a quarter of its 2006 market value to date. Base metal and coal companies fared much better, losing just 7% and 3%, respectively. Gold was the only subsector that managed to exceed its 2006 valuation, appreciating more than 20% in five years. Looking at the key underlying commodities the performance of steel and base metal companies may be understandable. However, the underperformance of coal and gold producers vs the respective 191% and 154% appreciation in the underlying commodities is a bit surprising. Rising costs and debt as well as operating issues may explain some of their underperformance, but these factors alone cannot be entirely responsible, in our view. This may point to the potential winners in 2012. Early in the year, we will be watching weather patterns in the southern hemisphere (coal) and how the global debt crisis develops (gold) to determine if our view proves to be correct.