Commodities Daily Report

Wednesday| January 16, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135

Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104view:

D Vijiya Rao - Research Analyst vijiya.d@angelbroking.com (022) 2921 2000 Extn. 6134view

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Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from Angel Commodities Broking (P) Ltd. Your feedback is appreciated on commodities@angelbroking.com

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Commodities Daily Report

Wednesday| January 16, 2013

International Commodities
Overview
US Core Retail Sales rose to 0.3 percent in the month of December. UKs CPI remained steady at -27.5 percent in December. US Empire State Manufacturing Index fell to -7.8 levels UKs PPI remained declined to 0.2 percent in December. Japanese Core Machinery Orders rose 3.9 percent in November. UKs Retail Price (RPI) rose to 3.1 percent in last month.

Market Highlights (% change)

Last INR/$ (Spot)
54.59

as on 15 January, 2013 w-o-w

0.7

Prev day
-0.1

m-o-m
-0.2

y-o-y
-5.8

Asian markets are trading on a weak note taking cues from the bearish market sentiments as World Bank forecasts lower growth in the developed economies. Japanese shares are also trading on a weak note due to rise in the Yen and thereby expectation of lower export earnings. World bank has cuts its growth forecast for the developed nations. It projects that the world economy might grow at 2.4 percent down from the June 2012 forecast of 3 percent. US Core Retail Sales rose to 0.3 percent in the month of December as compared to a decline of -0.1 percent in November. US Producer Price Index (PPI) declined to -0.2 percent in the month of December as against a decline of -0.8 percent in November. US Retail Sales rose to 0.5 percent in the month of December as compared to 0.45 percent in November. US Empire State Manufacturing Index fell to -7.8 levels as against -8.1 levels in November. US Dollar Index (DX) gained 0.3 percent due to rise in risk aversion in the global markets owing to renewed worries over the US debt ceiling which if not resolved might deteriorate the growth of the economy. This led to increase in the demand for the low yielding currency that is US Dollar Index (DX). However, some of the gains in the index were erased after favorable data from the US economy. US equities traded in the positive terrain taking cues from favorable retail sales data from the nation. The stock had remained lower in early part of trade due to worries over the US debt ceiling which reemerged raising worries that if the debt ceiling is not raised it might restrict growth of the nation. The index touched a high of 79.71 and closed at 79.79 on Tuesday. The Indian Rupee depreciated 0.1 percent taking cues from rise in the risk aversion in the global markets coupled with strength in the DX. The currency depreciated due to dollar demand from the oil companies and firms. However, sharp depreciation in the currency was capped due to continued foreign institutional inflows. There are also expectations of rate cuts by the Reserve Bank of India in its policy meeting to be held in the later part of the month. For the current month 2013 FII inflows totaled at Rs 10,601.90 crores till th 15 January 2013. While year to date basis, net capital inflows for the year 2013 stood at Rs. 10,601.90 crores.

$/Euro (Spot)

1.3303

-0.6

1.7

1.7

4.9

Dollar Index* NIFTY

79.79

0.3

-0.8

-0.2

-2.5

6056.6

0.5

0.9

5.7

24.5

SENSEX

19986.8

0.4

1.2

6.1

23.7

DJIA

13534.89

0.2

1.5

2.8

9.0

S&P

1472.34

0.11

1.04

4.16

14.22

Source: Reuters

Euro declined 0.6 percent lower due to depressing comment by the Euro-area finance ministers leader, Jean-Claude Juncker that the currency was dangerously high. This has created bearish market sentiments towards the end of the session. German economy contracted in the final quarter of 2012. This also exerted downside pressure on the currency. Strength in the DX also added to the losses in currency. The currency touched an intra-day low of 1.3266 and closed at 1.3303 on Tuesday.

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Commodities Daily Report

Wednesday| January 16, 2013

International Commodities
Bullion Gold
Spot gold prices gained 0.7 percent due to worries over the US debt ceiling which needs to be resolved along with positive comments by two US Federal Reserve officials that policy makers should continue with the monetary easing program to revive the economy. However, strength in the DX capped gains in the gold prices. The yellow metal touched an intra-day high of $ 1,684.9/oz and closed at $ 1,678.5 per ounce on Tuesday. On the MCX, Gold February contract ended 0.4 percent lower taking cues from strength in spot gold prices along with depreciation in the rupee. Gold prices on the MCX closed at Rs. 30,869/10 gms on Tuesday after touching a high of Rs. 30,887/ 10gms. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Feb13) MCX Gold (Feb13) Unit $/oz Rs/10 gms $/oz 1683.4 $/oz Rs /10 gms 30869.0 0.4 0.0 -1.1 12.5 0.9 1.3 -0.7 3.3 Last 1678.5 #N/A 1680.5 Prev day 0.7 #N/A 0.8

as on 15 January, 2013 WoW 1.2 #N/A 1.5 MoM -1.1 #N/A -0.7 YoY 2.4 #N/A 2.8

Silver
Spot silver prices ended 1.1 percent higher taking cues from firmness in the spot gold prices. However, weakness in the base metals pack along with strength in the DX restricted sharp gains in the silver prices in yesterdays session. The white metal touched an intra-day high of $ 31.48/oz and closed at $ 31.4 per oz on Tuesday. In the Indian markets, MCX silver prices gained 1.2 percent and closed at Rs. 59,459/kg on Tuesday and touched an intra-day high of Rs. 59,580/ kg. Depreciation in the Indian rupee supported an upside in the silver prices on MCX. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last
31.4

Source: Reuters

as on 15 January, 2013 WoW

3.3

Prev day
1.1

MoM
-3.6

YoY
5.5

59000.0 3119.0

1.1 1.4

1.3 2.6

-4.6 -4.6

13.2 5.2

3149.8 59459.0

1.3 1.2

3.6 2.7

-2.4 -3.3

6.8 14.3

Outlook
In todays session, we expect precious metals to trade higher on the back of positive comment by the US Federal reserve official to continue with the monetary easing program. This would keep the economy on the path of recovery. Improved buying by the Asian buyers is also expected to support the precious metal prices. However, strength in the DX is expected to cap gains in the prices of the precious metals today. In the domestic markets, depreciation in the rupee is expected to act as a supportive factor for the precious metals on MCX.

Source: Reuters

Technical Chart Spot Gold

Technical Outlook
Unit Spot Gold MCX Gold Feb13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg

valid for January 16, 2013 Support 1678/1674 30800/30730 31.20/30.95 59100/58700 Resistance 1686/1692 30950/31050 31.50/31.70 59700/60000
Source: Telequote

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Commodities Daily Report

Wednesday| January 16, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 1.1 percent yesterday taking cues from statement from US President Barack Obama that he wont negotiate with the Republican Party over the government debt ceiling and will discuss separately for cut in the spending. Additionally, rise in the US crude oil inventories and strength in the DX also exerted downside pressure on the prices. Crude oil prices touched an intra-day low of $93.22/bbl and closed at $93.40/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.6 percent on account of depreciation in the Indian Rupee and closed at Rs.5,131/bbl after touching an intra-day high of Rs.5,148/bbl on Tuesday. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Feb13) ICE Brent Crude (Feb13) MCX Crude (Jan13) Unit $/bbl $/bbl $/bbl
110.3 -1.4 -1.5 2.2 -0.1

as on 15 January, 2013 WoW

0.1 -1.7 0.1

Last
93.3 112.5 93.3

Prev. day
-1.1 0.4 -0.9

MoM
9.2 1.6 8.6

YoY
-5.5 1.8 -5.5

$/bbl
5131.0 0.6 2.0 8.8 1.0

Rs/bbl
Source: Reuters

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories rose marginally by 46,000 barrels to 360.90 million barrels for the week ending on 11th January 2012. Gasoline inventories rose around 4.1 million barrels to 231.18 million barrels and whereas distillate inventories decline by 568,000 barrels to 130.80 million barrels for the same week.

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Jan 13) Unit $/mmbtu Rs/ mmbtu Last 3.455 188.9

(% change)

as on 15 January, 2013

Prev. day 2.43 1.72

WoW 7.36 6.18

MoM 4.25 3.85

YoY 29.40 38.39

Source: Reuters

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to rise by 2.3 million barrels for the week ending on 11th January 2012. Gasoline stocks are expected to gain by 2.9 million barrels whereas distillate inventories are expected to increase by 1.9 million barrels for the same period. Outlook In the intra-day, we expect crude oil prices to trade lower due to worries over the US debt ceiling along with strength in the DX. Rise in the crude oil inventories is also expected to exert downside pressure on the crude oil prices. In the domestic markets, depreciation in the rupee is expected to cushion fall in the MCX Crude oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Jan 13 $/bbl Rs/bbl valid for January 16, 2013

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Support 92.50/91.80 5080/5040

Resistance 94.0/94.70 5160/5200

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Commodities Daily Report

Wednesday| January 16, 2013

International Commodities
Base Metals
Base metal prices traded on a negative note yesterday except for the Nickel which closed at a positive note. The decline in prices of base metals was due to the concerns over the US economy debt ceiling thus reducing the demand for the metals. Strength in the DX also supported the fall in the prices. In the domestic markets, depreciation in the Indian rupee supported the base metals prices to move upwards. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Jan13) LME Nickel (3 month) MCX Nickel (Jan13) LME Lead (3 month) MCX Lead (Jan13) LME Zinc (3 month) MCX Zinc (Jan13)
Source: Reuters

as on 15 January, 2013 WoW

-1.1

Last
7989.0

Prev. day
-0.2

MoM
-0.7

YoY
4.8

$/tonne

Rs/kg

441.3

0.2

-1.7

-0.6

6.1

Copper
Copper prices declined 0.2 percent in yesterdays session. The fall was attributed to the concerns over the US debt ceiling under which negotiations are required over the government's borrowing limit although the US Federal Reserve has indicated that the bank would continue the monetary easing programme. Also, there are concerns over the growth prospects of China and the imports from the nation are also expected to decline on the account Lunar New Year in February. Rise in the LME copper inventories also pressurised the prices. LME Copper inventories increased 1.1 percent in yesterdays session and stood at 333,275 tonnes on Tuesday as against 329,725 tonnes on 14th January 2013. Prices of Copper on LME touched an intraday low of $ 7,940 per tonne and closed at $ 7,989 /tonne on Tuesday. In the domestic markets MCX copper increased 0.2 percent tracing depreciation in the Indian rupee. In the domestic markets prices of Copper on MCX touched an intraday high of Rs. 447.80 per kg and closed at Rs. 440.5 per kg on Tuesday. Outlook In todays session, we except metal prices to trade with upward bias owing to favorable retail sales from the US indicating that the economy is on the path of recovery. However, strength in the DX is expected to cap gains in the base metals prices. In the domestic markets, depreciation in the Indian rupee would push prices upwards on the MCX.

$/tonne

2056.8

-0.1

-0.4

-2.8

1.9

Rs /kg

111.2

0.2

-1.2

-3.0

1.1

$/tonne

17510.0

1.0

0.9

-0.8

-5.7

Rs /kg

957.9

1.5

0.1

-0.5

-5.1

$/tonne

2291.3

-0.3

-1.4

-0.2

13.1

Rs /kg

125.1

0.0

-1.8

0.7

20.3

$/tonne

1997.0

-0.2

-1.2

-3.4

7.6

Rs /kg

108.6

0.1

-1.7

-2.6

7.5

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 15 January
333275 5187850 147060 1221950 299975
th

14 January
329725 5183625 147060 1215875 301525

th

Actual Change 3,550 4,225 0 6,075 -1,550

(%) Change 1.1 0.1 0.0 0.5 -0.5

Source: Reuters

Technical Chart MCX Copper Technical Outlook

Unit MCX Copper Feb13 MCX Zinc Jan13 MCX Lead Jan 13 MCX Aluminum Jan13 MCX Nickel Jan 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for January 16, 2013 Support 438/436 107.8/107 124.3/123.5 110.5/109.8 950/942 Resistance 443/446 109.3/110 126/126.8 112/113.6 965/975

Source: Telequote

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Commodities Daily Report

Wednesday| January 16, 2013

International Commodities
Important Events for Today

Indicator Core Machinery Orders m/m CPI y/y Core CPI y/y German 10-y Bond Auction Core CPI m/m CPI m/m TIC Long-Term Purchases Capacity Utilization Rate Industrial Production m/m Crude Oil Inventories

Country JPY EU EU EU US US US US US US

Time (IST) 5:20 am 3:30 pm 3:30 pm Tentative 7:00 pm 7:00 pm 7:30 pm 7:45pm 7:45pm 9:00pm

Actual 3.9 % -

Forecast 0.4 % 2.2% 1.5% 0.2% 0.0% 19.8B 78.6 % 0.2% 2.0 M

Previous 2.6 % 2.2% 1.4% 1.40|1.5 0.1% -0.3% 1.3B 78.4 % 1.1% 1.3 M

Impact Medium Medium Medium Medium High Medium Medium Medium Medium Medium

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