Commodities Daily Report

Friday| August 10, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Friday| August 10, 2012

International Commodities
Overview
Indias Industrial output declined by 1.8 percent in June. US Unemployment Claims declined to 361,000 for w/e 3 August. US Trade Balance was at a deficit of $42.9 billion in June. Chinas Trade Balance at a surplus of 25.1 billion Yuan in last month. Japans CGPI declined by 2.1 percent in July.
INR/$ (Spot) Last 55.17 Prev day 0.2 w-o-w 1.2 m-o-m 1.2 y-o-y -18.0
rd

Market Highlights (% change)

as on 9 August, 2012

Asian equities are trading on bearish note due to negative market sentiments in the global markets and expectations of unfavorable trade data from the China. US Trade Balance was at a deficit of $42.9 billion in June as against a previous deficit of $48 billion a month ago. Unemployment Claims declined by 6,000 to 361,000 for the week ending on 3rd August from previous rise of 367,000 in prior week. Mortgage Delinquencies increased by 7.58 percent in Q2 of 2012 as compared to previous rise of 7.4 percent in Q1 of 2012. Wholesale Inventories declined by 0.2 percent for the month of June. Indias Industrial output declined by 1.8 percent in June as against a rise of 2.4 percent a month ago. Cumulative industrial output also declined by 0.1 percent in June as compared to rise of 0.8 percent in earlier month. Manufacturing output also declined by 3.2 percent in June from previous rise of 2.5 percent in May. Chinas Trade Balance was at a surplus of 25.1 billion Yuan in July from previous surplus of 31.7 billion Yuan in June. US Dollar Index strengthened by 0.3 percent due to rise in the risk aversion in the global markets which increased the demand for the low yielding currency that is US Dollar Index. US equities settled on a flat note due to favourable jobs data and decline in the trade deficit data. However, concerns of global slowdown are creating bearish market sentiments. The currency touched an intra-day high of 82.87 and closed at 82.71 on Thursday. The Indian Rupee appreciated by 0.2 percent yesterday taking cues from mixed global market sentiments along with weakness in the DX in the early part of the trade. Additionally, increase in foreign funds also acted as a positive factor for the currency. However, sharp upside in the currency was capped on the back of unfavorable economic data from the country. The countrys industrial production and manufacturing output also declined in yesterdays trading session. It touched an intra-day high of 55.04 in yesterdays trade and closed at 55.29 on Thursday. For the current month, FII inflows totaled at Rs 4,477.10 crores till 9th August 2012. While on a year to date basis, net capital inflows stood at th Rs 56,742.90 crores till 9 August 2012.

$/Euro (Spot)

1.2305

-0.5

1.0

0.9

-13.2

Dollar Index

82.71

0.3

-0.9

-1.3

10.6

NIFTY

5323.0

-0.3

1.8

1.7

3.1

SENSEX

17560.9

-0.2

2.0

1.9

2.5

DJIA

13165.2

-0.1

2.2

4.7

22.8

S&P

1402.8

0.0

2.8

3.7

19.6

Source: Reuters

Euro depreciated 0.5 percent due to concerns of Euro zone debt along with strength in the DX. Additionally, unfavorable economic data from the region added downside pressure on the currency. The currency touched an intra-day low of 1.2265 and closed at 1.2305 on Thursday. Italian Trade Balance was at a surplus of 2.52 billion Euros in June as against a surplus of 1.01 billion Euros a month ago. UKs Trade Balance was at a deficit of 10.1 billion Pounds in June from previous deficit of 8.4 billion Pounds a month ago. The Conference Board (CB) Leading Index declined by 0.3 percent in June as compared to earlier decline of 0.8 percent in May. Japans Overnight Call Rate remained unchanged at 0.1 percent in August. Household Confidence declined by 0.7 points to 39.7mark in July from previous level of 40.4 in June. Prelim Machine Tool Orders declined by 6.8 percent in July as compared to previous decline of 15.5 percent a month ago. Corporate Goods Price Index (CGPI) declined by 2.1 percent in July from previous decline of 1.4 percent in June.

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Commodities Daily Report

Friday| August 10, 2012

International Commodities
Bullion
Gold
Spot Gold prices traded on a firm note due to expectation that central bankers of the world might take further stimulus measures to boost the economy. However, strength in the DX capped sharp gains in the gold prices. The yellow metal touched an intra-day high of $1618.11/oz and closed at $1617.09/oz. In the domestic markets MCX gold prices traced the spot prices and settled 0.2 percent higher on Thursday. However appreciation in the rupee capped sharp gains in the domestic prices. Gold prices touched an intra-day high of Rs. 29980/10gms and closed at Rs.29967/10gms. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex (Dec12) MCX (Oct12) Unit $/oz Rs/10 gms $/oz $/oz Rs /10 gms Last 1617.1 29714.0 Prev day 0.4 0.0 as on 9 August, 2012 WoW 1.7 -0.3 MoM 2.9 1.8 YoY -9.9 15.1

1615.0 1617.1 29967.0

0.1 0.3 0.2

1.1 1.9 1.0

3.8 3.3 2.5

-8.9 -9.2 14.4

Silver
Spot silver prices traded on firm note tracking strength in the gold prices along with mixed movement in the base metals pack. However, strength in the DX capped sharp gains in the spot silver prices. The white metal touched in intraday high of $28.16/oz and settled at $28.03/oz. In the domestic market MCX Silver prices traced the spot prices and ended 0.2 percent higher on Thursday. However appreciation in the Indian rupee restricted sharp gains in the prices. Silver prices touched an intra-day high of Rs. 53,608/kg and closed at Rs. 53512/kg in yesterdays session.

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex (Sep12) MCX (Sep12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 28.1 54015.0 2801.0 2809.0 53512.0 Prev day 0.4 0.4 0.6 0.1 0.2

as on 9 August, 2012 WoW 3.7 0.6 2.2 4.1 1.1 MoM 3.3 3.1 5.0 3.5 0.9 YoY -28.4 -8.1 -26.9 -28.6 -9.8

Outlook
In todays session we expect precious metal to trade sideways due to weak global market sentiments along with strength in the DX. However, expectation of stimulus measures by the global central banks eyeing slow growth may cushion sharp fall in the prices. In the domestic markets precious metals are likely to trade sideways with upward bias due to depreciation in the Indian rupee. Technical Outlook
Unit valid for August 10, 2012 Support Resistance

Source: Reuters

Technical Chart Spot Gold

Spot Gold

$/oz

1609/1604

1616/1619

MCX Gold Oct12

Rs/10 gms

29900/29800

30020/30080
Source: Telequote

Spot Silver

$/oz

27.87/27.76

28.05/28.13

MCX Silver Sep12

Rs/kg

53300/53100

53650/53800

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Commodities Daily Report

Friday| August 10, 2012

International Commodities
Energy
Crude Oil
Nymex crude oil prices traded on a flat note yesterday taking cues from favourable economic data from the US. However, sharp upside in the prices was capped on the back of strength in the DX. Crude oil prices touched an intra-day high of $94.21/bbl and closed at $93.40/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.1 percent and closed at Rs.5,174/bbl after touching an intra-day high of Rs 5193/bbl on Thursday. However, appreciation in the Indian Rupee capped further gains in the crude oil prices. News As per the International Energy Agency (IEA) report, Organization of Petroleum Exporting Countries produced 31.9 million barrels in the second quarter of 2012 as against a forecast of 29.8 million barrels. The cartel hasnt overproduced this much since 1998 when supply exceeded demand by 3.4 million a day. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Aug12) ICE Brent Crude (Aug12) MCX Crude (Aug12) Unit $/bbl $/bbl Last 93.4 114.3 Prev. day 0.0 0.1 WoW 7.1 5.5 as on 9 August, 2012 MoM 8.5 14.5 YoY 12.4 9.2

$/bbl

93.4

0.0

7.2

8.5

12.6

$/bbl

113.2

1.0

6.9

12.0

6.1

Rs/bbl

5174.0

0.1

4.8

8.2

39.6

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Aug12) Unit $/mmbtu Rs/ mmbtu Last 2.915 168.6

(% change)

as on 9 August, 2012

Prev. day -0.38 4.27

WoW -0.07 0.66

MoM 1.15 4.85

YoY -27.40 -7.36

Natural Gas
EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory has increased less than expectations by 24 billion cubic feet (bcf) which stood at 3.241 trillion cubic feet for the week ending on 3rd August 2012. Outlook We expect crude oil prices to trade on a bearish note due to weak global market sentiments along with strength in the DX. Additionally, rise in the output by the OPEC nations coupled with unfavorable data from the China might exert a downside pressure on the prices. However, in the Indian markets depreciation in the Rupee will act as a positive factor for the crude oil prices. Technical Outlook
Unit valid for August 10, 2012 Support Resistance

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

92.75/92.03

94.02/94.56

MCX Crude Aug12

Rs/bbl

5130/5090

5200/5230

Source: Telequote

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Commodities Daily Report

Friday| August 10, 2012

International Commodities
Base Metals
The base metals pack traded on a mixed note yesterday on the back of rise in risk aversion in the global markets coupled with strength in the DX. However, sharp downside in prices was cushioned on account of decline in LME inventories expect Nickel. In the Indian markets appreciation in the Rupee added further downside pressure in the prices. Copper Copper, the leader of the base metals pack gained around 0.2 percent yesterday taking cues from decline in LME copper inventories by 0.8 percent which stood at 243,600 tonnes. However, further upside in the prices was capped on the back of rise in risk aversion in the global markets coupled with stronger DX. The red metal touched an intra-day high of $7,588/tonne and closed at $7,540/tonne in yesterdays trading session. In the Indian markets prices increased by 0.1 percent and closed at Rs.417.70/kg after touching an intra-day high of Rs.419.9/kg on Thursday. However, appreciation in the Indian Rupee prevented further rise in the prices on the MCX. Outlook In todays trading session, we expect base metals pack to trade on sideways with bearish tone due to negative global sentiments along with strength in the DX. Additionally weak economic data from China will also add pressure to the base metals pack. In the Indian markets however depreciation in the Indian rupee might cushion sharp downside in the MCX prices. Technical Outlook
Unit valid for August 10, 2012

Market Highlights - Base Metals (% change)

Unit LME Copper (3 month) MCX Copper (Aug12) LME Aluminum (3 month) MCX Aluminum (Aug12) LME Nickel (3 month) MCX Nickel (Aug12) LME Lead (3 month) MCX Lead (Aug12) LME Zinc (3 month) MCX Zinc (Aug12) Rs /kg 102.6 $/tonne 1859.0 Rs /kg 105.8 $/tonne 1917.5 Rs /kg 862.9 $/tonne 15520.0 Rs /kg 103.8 $/tonne 1899.8 Rs/kg 417.7 $/tonne Last 7540.0

as on 9 August, 2012 WoW 3.4 MoM -0.1 YoY -12.9

Prev. day 0.2

0.1

1.5

-1.2

6.6

-0.3

3.4

0.7

-20.9

-0.6

0.5

-0.4

-3.8

-0.9

1.3

-2.3

-26.5

-0.9

-0.9

-3.1

-10.0

0.6

3.4

3.2

-15.9

0.4

0.8

1.9

1.8

0.1

3.2

0.7

-12.5

-0.1

0.5

-0.6

7.3

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 9 August 243,600 4,863,200 116,808 977,950 323,800
th

8 August 245,600 4,868,850 116,604 986,125 324,875

th

Actual Change -2,000 -5,650 204 -8,175 -1,075

(%) Change -0.8 -0.1 0.2 -0.8 -0.3

Source: Reuters

Technical Chart LME Copper

Support Resistance

MCX Copper Aug12

Rs /kg

415/412

420/422

MCX Zinc Aug12

Rs /kg

102/101.60

103.1/103.7

MCX Lead Aug12

Rs /kg

104.7/104.2

106.2/106.8

MCX Aluminum Aug12

Rs /kg

102.6/102.2

103.4/104

MCX Nickel Aug12

Rs /kg

857/852

867/874

Source: Telequote

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Commodities Daily Report

Friday| August 10, 2012

International Commodities
Important Events for Today

Indicator New Loans Trade Balance French Industrial Production m/m PPI Input m/m Import Prices m/m Federal Budget Balance

Country China China Euro UK US US

Time (IST) 10 14
th th

Actual -

Forecast 701B 35.1B 0.4% 1.3% 0.1% -103.0B

Previous 920B 31.7B -1.9% -2.2% -2.7% -59.7B

Impact Medium High Medium High Medium Medium

Tentative 12:15pm 2:00pm 6:00pm 11:30pm

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