Commodities Daily Report

Friday| February 22, 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:

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Commodities Daily Report

Friday| February 22, 2013

International Commodities
Overview
US Unemployment Claims rose to 362,000 for w/e on 15 February. German Manufacturing PMI rose to 50.1-mark in current month. US Philly Fed Manufacturing Index was at -12.5-level in February. UKs CBI Industrial Order Expectations was at -14-level in February.
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Market Highlights (% change)

Last INR/$ (Spot) 54.47 Prev day -0.7

as on 21 February, 2013 w-o-w -0.9 m-o-m -1.4 y-o-y -9.7

US Core Consumer Price Index (CPI) increased by 0.3 percent in January as against a rise of 0.1 percent in December. Unemployment Claims rose th by 20,000 to 362,000 for the week ending on 15 February from earlier increase of 342,000 in prior week. Flash Manufacturing PMI declined by 0.6 points to 55.2-mark in February as compared to 55.8-level in January. Existing Home Sales rose to 4.92 million in January with respect to rise of 4.90 million a month ago. Philly Fed Manufacturing Index was at -12.5-level in February when compared to earlier fall of 5.8-mark in last month. Mortgage Delinquencies was at 7.09 percent in Q4 of 2012 as against a rise of 7.4 percent in Q3 of 2012. US Dollar Index (DX) appreciated by 0.5 percent in yesterdays trade on the back of rise in risk aversion in the global market sentiments which led to increase in demand for the low yielding currency. Additionally, unfavorable economic data from the US and Euro Zone also supported an upside in the DX. Further, US equities also traded on a negative note which also acted as a positive factor for the currency. It touched an intra-day high of 81.63 and closed at 81.55 on Thursday. The Indian Rupee depreciated sharply by 0.7 percent in yesterdays trading session. The currency depreciated as a result of US Federal Reserve statement on Thursday that central bank may slow or stop monthly bond buying program before the expected deadline. Apart from that, global and domestic market sentiments also traded on a weak note which exerted downside pressure on the currency. Further, strength in the DX also acted as a negative factor for the Indian Rupee. It touched an intra-day low of 54.61 and closed at 54.47 against dollar on Thursday. For the month of February 2013, FII inflows totaled at Rs.21,880.50 st crores ($4,103.19 million) as on 21 February 2013. Year to date basis, net capital inflows stood at Rs.43,939.50 crores ($8,162.50 million) till st 21 February 2013. UKs Public Sector Net Borrowing declined by 9.9 billion Pounds in January as against a rise of 12.4 billion Pounds in December. Confederation of British Industry (CBI) Industrial Order Expectations was at -14-level in February from earlier fall of 20-mark in January.

$/Euro (Spot)

1.3188

-0.7

-1.3

-1.4

-0.4

Dollar Index NIFTY

81.55

0.5

1.3

1.9

2.6

5852.3

-1.5

-0.8

-2.8

6.3

SENSEX

19325.4

-1.6

-0.9

-3.0

5.7

DJIA

13880.62

-0.3

-0.7

0.4

7.3

S&P

1502.4

-0.6

-1.2

1.1

10.5

Source: Reuters

The Euro depreciated by 0.7 percent yesterday taking cues from French Flash Services PMI declined by 0.9 points to 42.7mark in current month from earlier rise of 43.6-level in January. German Flash Services PMI fell by 1.6 points to 54.1level in February with respect to rise of 55.7-mark in prior month. European Flash Manufacturing PMI declined marginally by 0.1 point to 47.8-mark in February when compared to rise of 47.9-level in January. European Flash Services PMI dropped by 1.3 points to 47.3-level in current month as against a rise of 48.6-mark in earlier month. Strength in the DX along with weak global market sentiments also added downside pressure on the currency. However, sharp downside in the currency was cushioned on the back of French Flash Manufacturing Purchasing Managers' Index (PMI) increased by 0.7 points to 43.6-level in February as against a rise of 42.9-mark in January.. German Flash Manufacturing PMI rose by 0.3 points to 50.1-mark in February as compared to rise of 49.8-level in January. The Euro touched an intra-day low of 1.316 and closed at 1.3188 against dollar on Thursday.

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Commodities Daily Report

Friday| February 22, 2013

Bullion Gold

International Commodities

Spot gold prices bounced back from the lows due to short coverings and buying at lower levels and ended 0.9 percent down on Thursday. Prices however fell in the early part of the trade due to reports of liquidation by the hedge funds and also bearish sentiments created after US Federal Reserve official gave signals in the FOMC meeting minutes that they might discontinue the bond buying program or reduce it sooner than expected. Strength in the DX however, capped gains in the prices. Weak economic data from the US in yesterdays session also raised hopes that the Federal Reserve might maintain its stimulus measures reducing earlier concerns of discontinuing the same. This also pushed gold prices upwards. The worlds largest gold backed exchange traded fund New Yorks SPDR Gold trust witnessed its largest one day outflow. Its holdings drop by 20.77 tonnes due to sharp fall in the prices. The yellow metal touched an intra-day high of $1,584.5/oz and closed at $ 1,575.7/ounce on Thursday. On the MCX, Gold April contract ended 0.6 percent higher taking cues from trend in the spot gold prices and depreciation in the rupee. Gold prices on the MCX closed at Rs.29,742/10 gms on Thursday after touching an intra-day low of Rs.29,779 / 10gms.

Market Highlights - Gold (% change)

Gold Gold (Spot) Unit $/oz Last 1575.7 Prev. day 0.9

as on 21 February, 2013 WoW -3.6 -6.7 MoM YoY -10.4

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13)

Rs/10 gms $/oz

29175.0

-0.7

-3.6

-3.8

4.1

1577.0

-0.7

-4.2

-6.5

-9.8

$/oz

1578.2

0.0

-3.5

#N/A

-10.2

Rs /10 gms

29742.0

0.6

-2.4

-3.3

#N/A

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg 28.6 54740.0 Last Prev day 0.4 -1.8

as on 21 February, 2013 WoW -5.7 -6.1 MoM -10.5 -7.8 YoY -16.6 -2.9

Silver
Spot silver gained 0.4 percent on Thursday taking cues from spot gold prices. Strength in the DX along with weakness in the base metals pack capped gains in the white metal. Short coverings by the market participants after sharp fall in the last few days pushed prices upwards. The white metal touched an intra-day high of $28.88/oz and closed at $ 28.64 per oz on Thursday. In the Indian markets, MCX silver prices gained 0.7 percent and closed at Rs.54,112 /kg on Thursday and touched a intra-day high of Rs.54,284/ kg. Silver prices on MCX traced strength of spot silver prices. Depreciation in the Indian rupee supported an upside in the silver prices on MCX.

$/oz $/ oz

2872.0 2869.5

-1.3 0.3

-7.0 -5.4

-10.0 #N/A

-14.7 -16.6

Rs / kg

54112.0

0.7

-4.4

-9.0

#N/A
Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to bounce back from the lows due to buying at lower levels. Apart from this there are hopes that US Federal Reserve might continue with the stimulus measures after observing unfavorable jobs data from the nation. Weakness in the DX is also expected to support an upside in the precious metals. In the domestic market, depreciation in the rupee is expected to add to the gains in the MCX precious metals. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for February 22, 2013 Support 1576/1570 29640/29550 28.25/28.10 53800/53500 Resistance 1585/1592 29820/29940 28.50/28.70 54300/54600
Source: Telequote

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Commodities Daily Report

Friday| February 22, 2013

Energy Crude Oil

International Commodities
Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April 13) ICE Brent Crude (March13) MCX Crude (Mar 13) Unit $/bbl $/bbl $/bbl Last 92.8 115.4 92.8 Prev. day -2.2 -1.7 -1.7 WoW -4.6 -3.6 -4.6

Nymex crude oil prices declined around 1.7 percent yesterday taking cues from more than expected sharp rise in the US crude oil inventories. Additionally, unfavorable economic data from the US and the Euro region lead to expectations of fall in demand for the fuel. Further, strength in the DX also exerted downside pressure on the oil prices. Crude oil prices touched an intra-day low of $92.63/bbl and closed at $92.84/bbl in yesterdays trading session. On the domestic bourses, prices declined by 1.2 percent and closed at Rs.5,102/bbl after touching an intra-day low of Rs.5,085/bbl on Thursday. Depreciation in the Indian Rupee cushioned sharp fall in the crude oil prices on the MCX. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories rose more than expectations by 4.1 million barrels to 376.40 million barrels for the week ending on 15th February 2013. Gasoline stocks declined by 2.9 million barrels to 230.40 million barrels and whereas distillate stockpiles fell by 2.3 million barrels to 123.60 million barrels for the last week.

as on 21 February, 2013 MoM #N/A 1.9 #N/A YoY -12.4 -5.8 -12.3

$/bbl

113.5

-1.8

-3.8

1.6

-6.7

Rs/bbl

5102.0

-1.2

-2.9

#N/A

#N/A

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Feb 13)

as on 21 February, 2013

Unit $/mmbtu Rs/ mmbtu

Last 3.242 178.5

Prev. day -0.86 0.00

WoW 2.27 4.82

MoM -9.24 -6.74

YoY 22.16 39.02

Source: Reuters

Natural Gas
Nymex natural gas prices declined around 0.9 percent yesterday on the back of expectations of warmer winter weather conditions which will lead to fall in demand for the fuel. Further, strength in the DX also exerted downside pressure on the gas prices. However, sharp downside in the gas prices was cushioned as a result of more than forecasted decline in US natural gas inventories. Gas prices touched an intra-day low of $3.231/mmbtu and closed at $3.242/mmbtu on Thursday. On the domestic front, prices traded on a flat note as a result of depreciation in the Indian Rupee and closed at Rs.178.5/mmbtu after touching an intra-day low of Rs.175.4/mmbtu on Thursday. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined more than expected by 127 billion cubic feet (bcf) which stood at 2.4 trillion cubic feet for the week ending on 15th February 2012. Outlook In todays session, we expect crude oil prices to trade with negative bias due to unexpected rise in the US crude oil stock piles. Unfavorable data from the US and Euro region might reduce the demand for the oil thereby exerting downside pressure. Weakness in the DX might cushion fall in the crude oil prices. Depreciation in the Indian Rupee will support an upside in the crude oil prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude March 13 $/bbl Rs/bbl valid for February 22, 2013

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Support 92.45/91.90 5070/5040

Resistance 93.72/94.27 5140/5170

Source: Telequote

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Commodities Daily Report

Friday| February 22, 2013

International Commodities
Base Metals
Base metals pack continued to trade with a bearish tone on the back of worries that the demand for the metals might reduce in the coming months on expectation that Chinese government is likely to announce measures to curb rise in the property prices. There were reports that the government might extend a pilot property tax program to some more cities in an effort to cool the bubbling real estate markets. Strength in the DX coupled with unfavourable Philly Fed manufacturing index from the US also acted as a bearish factor for the base metal prices. Increase in the LME inventories also exerted downside pressure on the base metals. MCX metal prices traced weakness in the international prices. However, depreciation in the rupee cushioned fall in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Feb13) LME Nickel (3 month) MCX Nickel (Feb13) LME Lead (3 month) MCX Lead Feb13) LME Zinc (3 month) MCX Zinc (Feb13)
Source: Reuters

as on 21 February, 2013 WoW -4.7 MoM -2.5 YoY -7.1

Last 7852.0

Prev. day -1.4

$/tonne

Rs/kg

429.1

-0.7

-3.7

-1.7

2.9

$/tonne

2074.8

-1.4

-3.6

1.5

-7.8

Rs /kg

111.6

-0.4

-2.7

3.3

-0.7

$/tonne

16750.0

-1.8

-8.3

-3.9

-17.9

Rs /kg

912.9

-1.1

-7.3

-2.1

-13.6

Copper
Copper prices extended losses of the previous day and fell 1.4 percent on Thursday. Weak economic data from the US along with worries of decline in the demand from China, the key consumer of the metal due to measures by the government to curb the rise in the property prices weighed on the copper prices. Apart from this, strength in the DX along with rise in the LME copper inventories also acted as a bearish factor for the red metal in yesterdays session. LME copper inventories gained 1.8 percent and stood at 420250 th tonnes as against 412950 tonnes on February 20 , 2013. Copper prices on LME touched an intra-day low of $7,813.5 per tonne and closed at $ 7,852 per tonne on Thursday. In the domestic markets, MCX copper fell 0.7 percent and closed at Rs. 429.1 per kg on Thursday tracking the international metal prices. Depreciation in the rupee however, cushioned fall in the prices. Outlook In the intra-day, we expect base metals prices to recover slightly after sharp fall amidst weakness in the DX. However, unfavourable data from the US and Europe might raise worries for the demand in the industrial metals which might restrict gains. Slow demand from the China might also restrict gains. In the domestic market, depreciation in the rupee will support an upside in the base metals pack on MCX. valid for February 22, 2013 Technical Outlook
Unit MCX Copper Feb13 MCX Zinc Feb 13 MCX Lead Feb 13 MCX Aluminum Feb13 MCX Nickel Feb 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg Support 427/425 114/113.2 125.5/124.8 110.8/110 905/898 Resistance 431/433 115.5/116.2 127.2/128

$/tonne

2324.5

-1.4

-3.6

1.2

10.0

Rs /kg

126.4

-0.4

-2.7

2.6

12.8

$/tonne

2114.0

-1.0

-3.3

4.0

3.6

Rs /kg

114.7

-0.1

-2.2

5.7

8.7

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 21st February 420250 5158025 154398 1189650 288500 20th February 412950 5151950 153306 1193250 288575 Actual Change 7,300 6,075 1,092 -3,600 -75 (%) Change 1.77 0.12 0.71 -0.30 -0.03
Source: Reuters

Technical Chart LME Copper

Source: Telequote

112.3/113 920/927

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Commodities Daily Report

Friday| February 22, 2013

International Commodities
Important Events for Today
Indicator German Ifo Business Climate EU Economic Forecast Belgium NBB Business Climate FOMC Member Powell Speaks Country Euro Euro Euro US Time (IST) 2:30pm 3:30pm 7:30pm 9:00pm Actual Forecast 104.9 -11.1 Previous 104.2 -13.2 Impact High Medium Medium Medium

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