Commodities Daily Report

Tuesday| September 18, 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

Tuesday| September 18, 2012

International Commodities
Overview
European Current Account was at a surplus of 9.7 billion Euros in July. The RBI kept Repo rates & reverse repo rates steady at 8% and 7%. Cash Reserve Ratio (CRR) cut by 25 bps to 4.5 percent. LME Copper inventories declined by 0.2 percent in yesterdays trade. European Trade Balance was at a surplus of 7.9 billion Euros in July.
INR/$ (Spot) Last 53.88 Prev day 0.8 w-o-w 2.8 m-o-m 2.9 y-o-y -12.2

Market Highlights (% change)

as on 17 September, 2012

Asian markets are trading on a mixed note on the back of concerns that Euro zone debt crisis remains unresolved and slowing US economy. The Reserve Bank of India (RBI) kept the key interest rate that is repo rates and reverse repo rates unchanged at 8 percent and 7.0 percent respectively for the month of September. However, Cash Reserve Ratio (CRR) was cut by 25 bps from 4.75 percent to 4.5 percent in the current month. US Empire State Manufacturing Index was at -10.4-mark in September as against previous decline of 5.9-level in August. US dollar Index (DX) swung between gains and losses and settled on a flat note. The Index recovered earlier losses towards the end of the day on the back of rise in risk aversion amongst market participants on doubts that whether the actions by the US Federal Reserve and European Central Bank might be enough to revive global economic growth. This led to rise in the demand for the low yielding currency that is DX. US equities also pared earlier week gains taking cues from bearish global market sentiments and worry that whether stimulus measures might be enough to augment growth in the nation. Weak economic data from the region also exerted downside pressure on the US equities. The currency touched an intra-day high of 79.12 and closed at 79.12. The Indian Rupee appreciated by 0.8 percent in the yesterdays trading session. The currency appreciated taking cues from upbeat global market sentiments along with weakness in the DX in the early part of the trade. Additionally, approval for Foreign Direct Investment (FDI) in retail and aviation sector on Friday lifted the domestic market sentiments and acted as a positive factor for the currency. It touched an intra-day high of 53.62 in yesterdays trade and closed at 53.88 on Monday. For the current month, FII inflows totaled at Rs 5,741.80 crores till 17th September 2012. While year to date basis, net capital inflows stood at Rs 68,811.40 crores till 17th September 2012.

$/Euro (Spot)

1.3116

-0.1

2.8

6.3

-4.9

Dollar Index

78.84

0.0

-1.9

-4.4

2.9

NIFTY

5610.0

0.6

4.6

4.5

10.3

SENSEX

18542.3

0.4

4.4

5.0

9.5

DJIA

13553.1

-0.3

2.3

2.1

17.8

S&P

1461.19

-0.3

2.2

3.0

20.2

Source: Reuters

Euro depreciated 0.1 percent taking cues from weak global market sentiments and doubts that whether the steps taken by the European central bank might be enough to contain the Euro zone debt crisis. However, sharp depreciation in the currency was cushioned on the back of favourable data from the region. The currency touched a low of 1.3082 and closed at 1.3116 on Saturday. European Current Account was at a surplus of 9.7 billion Euros in July as against a previous surplus of 14.3 billion Euros a month ago. Italian Trade Balance was at a surplus of 4.49 billion Euros in July from earlier surplus of 2.52 billion Euros in prior month. European Trade Balance was at a surplus of 7.9 billion Euros in July as compared to previous surplus of 9.3 billion Euros in earlier month.

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Commodities Daily Report

Tuesday| September 18, 2012

International Commodities
Bullion Gold
Spot gold prices declined 0.6 percent taking cues from weak global market sentiments and mixed movement in the US Dollar Index (DX). Doubts that whether the stimulus measures might be enough to contain revive the global economy led to risk in risk aversion amongst market participants. The yellow metal touched a low of $1,754.09/oz and closed at $1,761.0/oz on Monday. On the MCX, Gold October contract swung between gains and losses and declined 0.1 percent taking cues from bearishness in the spot prices and appreciation in the Indian rupee. Gold prices on the MCX closed at Rs.31,811 gms on day after touching a low of Rs. 31,751/ 10gms. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex Gold (Dec12) MCX Gold (Oct12) Unit $/oz Rs/10 gms $/oz Last 1761.0 31900.0 Prev day -0.6 -0.7 as on 17 September, 2012 WoW 2.1 0.0 MoM 8.7 6.2 YoY -2.8 16.8

1770.0

-0.3

2.2

9.6

-1.3

$/oz Rs /10 gms

1767.7

-0.1

2.3

9.1

-2.5

31811.0

-0.2

-0.3

5.4

14.4

Silver
Spot silver prices declined 1.2 percent taking cues from weakness in the gold prices along with bearishness in the base metals pack. Mixed movement in the DX also exerted downside pressure on the silver prices in yesterdays session. The white metal touched a low of $33.78/oz and closed at $34.21/oz on Friday. In the Indian markets, MCX silver prices also fell by 0.9 percent tracking spot prices and closed at Rs. 63,761/kg after touching low of Rs.63,605/kg on Monday. Appreciation in the Indian rupee also exerted downside pressure on the silver prices. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 34.2 63000.0 3455.0 3429.8 63761.0 Prev day -1.2 -1.0 -0.5 -0.9 -0.9

Source: Reuters

as on 17 September, 2012 WoW 2.8 -0.1 2.8 2.2 -0.3 MoM 18.9 15.2 23.0 20.0 17.4 YoY -15.7 -1.3 -13.6 -15.9 -1.3

Outlook
In todays session, we expect precious metals to trade with negative bias due to mixed global market sentiments along with strength in the DX. In the Indian markets depreciation in the Rupee will pressurize prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Oct12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for September 18, 2012 Support 1751/1747 31720/31640 33.90/33.57 63400/63100 Resistance 1759/1766 31870/32000 34.25/34.40 64000/64300

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Tuesday| September 18, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 2.4 percent in yesterdays trading session taking cues from expiry of the October contract nearing coupled with strength in the DX. Additionally, US manufacturing data came on a negative note which also added downside pressure on the prices. Crude oil prices touched an intra-day low of $94.65/bbl and closed at $96.60/bbl in yesterdays trade. On the domestic bourses, prices declined by 1.1 percent on account of appreciation in the Indian Rupee and closed at Rs.5,274/bbl after touching an intra-day low of Rs.5,121/bbl on Monday. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 1.0 million barrels for the week ending on 14th September 2012. Gasoline stocks are expected to rise by 1.5 million barrels and distillate inventories are expected to gain by 1.0 million barrels for the same week. Outlook In todays trade, we expect crude oil prices to trade on a bearish note on account of mixed global market sentiments and strength in the DX. In the domestic market appreciation in the Indian Rupee will cause MCX crude oil prices to remain weak in the intraday. Technical Outlook
Unit valid for September 18, 2012 Support Resistance

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Oct12) ICE Brent Crude (Oct12) MCX Crude (Sept12) Unit $/bbl $/bbl Last 96.5 116.9 Prev. day -2.5 -0.7 WoW 0.0 2.9

as on 17 September, 2012 MoM 0.5 0.5 YoY 9.7 -1.3

$/bbl

96.6

-2.4

0.1

0.7

9.8

$/bbl

113.8

-2.5

-0.9

0.1

1.4

Rs/bbl

5274.0

-1.1

-1.0

-0.9

27.2

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Sept12) Unit $/mmbtu Rs/ mmbtu Last 2.885 155.4

(% change)

as on 17 September, 2012

Prev. day -2.00 -2.69

WoW 8.26 4.79

MoM 5.60 1.64

YoY -24.50 -14.05

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

NYMEX Crude Oil MCX Crude Sept12

$/bbl

96.30/95.70

97.80/98.90

Rs/bbl

5240/5210

5320/5380

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Commodities Daily Report

Tuesday| September 18, 2012

International Commodities
Base Metals
The base metals pack traded on a negative note yesterday on the back of rise in risk aversion in the global markets coupled with strength in the DX. However, sharp downside in the prices was cushioned on account of decline in LME inventories. In the Indian markets, appreciation in the Rupee added further downside pressure on the prices. Copper Copper, the leader of the base metals complex declined by 1.2 percent on the back of weak global market sentiments along with strength in the DX. However, sharp downside in the prices was restricted on account of decline in LME Copper inventories by 0.2 percent which stood at 216,700 tonnes. The red metal touched an intra-day low of $8,290/tonne and closed at $8,290/tonne in yesterdays trading session. On the domestic front, prices declined by 1 percent and closed at Rs.453.20/kg after touching an intra-day low of Rs.451.9/kg on Monday. Outlook LME Inventories In todays session, we expect base metal prices to trade on a bearish note on the back of strength in the DX along with worries that stimulus measures by the global central bankers might not be enough to revive the economies. However, approval of new infrastructure projects in China is likely to cushion sharp fall in the prices. In the domestic markets however, appreciation in the Rupee will exert downside pressure on the base metal prices. Technical Outlook
Unit valid for September 18, 2012 Support Resistance Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 17 September 216,700 5,017,725 120,150 921,150 290,900
th

Market Highlights - Base Metals (% change)

Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Sept12) LME Nickel (3 month) MCX Nickel (Sept12) LME Lead (3 month) MCX Lead (Sept12) LME Zinc (3 month) MCX Zinc (Sept12) Rs /kg 111.4 $/tonne 2085.0 Rs /kg 121.0 $/tonne 2252.0 Rs /kg 975.5 $/tonne 18099.0 Rs /kg 115.6 $/tonne 2157.0 Rs/kg 453.2 $/tonne Last 8290.0

as on 17 September, 2012 WoW 2.7 MoM 11.3 YoY -4.6

Prev. day -1.2

-1.0

0.0

9.3

9.5

-1.6

4.5

17.3

-9.2

-1.4

2.0

14.3

3.8

1.8

8.1

16.3

-15.8

2.0

5.3

12.6

-4.4

-0.1

6.1

18.5

-4.4

-0.2

3.5

14.8

7.1

-1.2

3.8

15.9

-3.6

-1.1

1.0

11.9

9.3

Source: Reuters
th

14 September 217,175 5,008,975 120,876 924,200 293,200

Actual Change -475 8,750 -726 -3,050 -2,300

(%) Change -0.2 0.2 -0.6 -0.3 -0.8

Source: Reuters

Technical Chart LME Copper

MCX Copper Nov12

Rs /kg

450/449

455/457.5

MCX Zinc Sept12

Rs /kg

110.8/110.1

112/112.6

MCX Lead Sept12

Rs /kg

119.7/120.4

121.7/122.5

MCX Aluminum Sept12

Rs /kg

115/114.4

116.1/116.8

MCX Nickel Sept12

Rs /kg

967/957

986/996

Source: Telequote

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Commodities Daily Report

Tuesday| September 18, 2012

International Commodities
Important Events for Today

Indicator CPI y/y RPI y/y German ZEW Economic Sentiment ZEW Economic Sentiment BOE Inflation Letter Current Account TIC Long-Term Purchases

Country UK UK Euro Euro UK US US

Time (IST) 2:00pm 2:00pm 2:30pm 2:30pm Tentative 6:00pm 6:30pm

Actual -

Forecast 2.5% 3.0% -19.4 -16.3 -126B 45.3B

Previous 2.6% 3.2% -25.5 -21.2 -137B 9.3B

Impact High Medium High Medium High Medium Medium

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