Commodities Daily Report

Thursday| February 28, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst :Vedika.narvekar@angelbroking.com view (022) 3935 8130 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Thursday| February 28, 2013

International Commodities
Overview
US Core Durable Goods Orders increased by 1.9 percent in January. German Consumer Climate rose by 0.1 point to 5.9-mark in February. US Pending Home Sales rose by 4.5 percent in the last month. Japans Prelim Industrial Production rose by 1 percent in January. Asian markets are trading higher today on the back of more than expected rise in the US economic data which shows signs of the global economic growth. US Core Durable Goods Orders increased by 1.9 percent in January as against a rise of 1 percent a month ago. Durable Goods Orders declined by 5.2 percent in January from earlier rise of 4.3 percent in December. Pending Home Sales rose by 4.5 percent in last month as compared to decline of 1.9 percent in prior month. US Dollar Index (DX) depreciated by 0.3 percent in yesterdays trading session on the back of rise in risk appetite in the global market sentiments which led to decline in demand for the low yielding currency. In addition, favorable economic data from the US coupled with Fed Chairman Ben Bernanke supporting the US Federal Reserve bond buying program also exerted downside pressure on the DX. The currency touched an intra-day low of 81.56 and closed at 81.67 on Wednesday. Indian Rupee appreciated by 0.4 percent in yesterdays trading session. The currency appreciated as a result of expectations that government will deliver a proper allocated budget for 2013-14 which will attract foreign fund flows. Additionally, expectations that Finance Minister will reveal measures to boost the investments, upbeat global market sentiments along with weakness in the DX also supported an upside in the currency. However, sharp upside in the currency was capped as a result of dollar demand from oil and defence companies. The Indian Rupee touched an intra-day high of 53.615 and closed at 53.86 against dollar on Wednesday. For the month of February 2013, FII inflows totaled at Rs.23,513.60 crores ($4,403.38 million) as on 26th February 2013. Year to date basis, net capital inflows stood at Rs.45,572.60 crores ($8,462.70 million) till 26th February 2013. UKs Second Estimate Gross Domestic Product (GDP) remained unchanged at -0.3 percent in the fourth quarter of 2012. Prelim Business Investment declined by 1.2 percent in Q4 of 2012 as against a rise of 0.5 percent in Q3 of 2012. Index of Services fell by 0.1 percent in last quarter of 2012 as compared to increase of 0.6 percent in Q3 of 2012. Japans Manufacturing Purchasing Managers' Index (PMI) increased by 0.8 points to 48.5-mark in February as against a rise of 47.7-level in January. Prelim Industrial Production rose by 1 percent in January from earlier rise of 2.5 percent a month ago.

Market Highlights (% change)

Last INR/$ (Spot) 53.86 Prev day 0.4

as on 27 February, 2013 w-o-w 0.4 m-o-m -1.2 y-o-y -9.1

$/Euro (Spot)

1.3138

0.6

-1.1

-3.2

-2.5

Dollar Index NIFTY

81.67

-0.3

0.6

3.0

2.8

5796.9

0.6

-2.5

-4.3

7.8

SENSEX

19152.4

0.7

-2.5

-4.3

4.7

DJIA

14075.4

1.3

1.1

1.2

8.2

S&P

1516.0

1.3

0.3

0.9

10.7

Source: Reuters

The Euro appreciated by 0.6 percent in yesterdays trade on the back of smooth auction of Italian 10 year government bonds around $5 billion. Further, comments from European Central Bank (ECB) President Mario Draghi that central banks has no intentions of tightening monetary policy coupled with positive economic data also acted as a positive factor for the currency. Additionally, weakness in the DX also supported Euro to gain strength. But the sharp appreciation in the Euro was capped as the uncertainty in the Italy persists. GfK German Consumer Climate rose by 0.1 point to 5.9-mark in February as against a rise of 5.8-level in January. German Import Prices increased by 0.1 percent in January from earlier decline of 0.5 percent in December. M3 Money Supply rose by 3.5 percent in January as compared to rise of 3.4 percent a month ago. Private Loans declined by 0.9 percent in last month with respect to fall of 0.7 percent in December. European Raw Materials Price Index (RMPI) declined by 1.4 points to 44.5level in February when compared to rise of 45.-mark a month ago. The Euro touched an intra-day high of 1.3147 and closed at 1.3138 against dollar on Wednesday.

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Commodities Daily Report

Thursday| February 28, 2013

International Commodities
Bullion Gold
Market Highlights - Gold (% change) Spot gold prices fell around 1 percent yesterday on the back of decline in safe haven demand from the investors. However, sharp downside in the prices was cushioned on account of rise in risk appetite in the global market sentiments coupled with weakness in the DX. In addition, optimistic statement from US Fed Chairman for supporting the central banks decision of bond buying program. The yellow metal touched an intra-day low of $1,591.94/oz and closed at $1,597.20/oz in yesterdays trading session. In the Indian markets, prices fell on account of appreciation in the Indian Rupee by 1.2 percent and closed at Rs.29,743/10 gms after touching an intra-day low of Rs.29,716/10 gms on Wednesday.
Gold Gold (Spot) Unit $/oz Last 1597.2 Prev. day -1.0 as on 27 February, 2013 WoW 2.2 MoM -4.7 YoY -10.5

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

Rs/10 gms $/oz

29530.0

0.4

0.5

-1.9

3.5

1604.3

0.9

1.0

-4.4

-9.9

$/oz

1595.2

-1.2

1.1

-3.9

-10.7

Rs /10 gms

29743.0

-1.2

0.6

-1.6

Source: Reuters

Silver
Taking cues from fall in gold prices coupled with mixed performance in the base metals, Spot silver prices declined by 1.3 percent in yesterdays trading session. However, sharp downside in the prices was cushioned as result of weakness in the DX. The white metal prices touched an intra-day low of $28.82/oz and closed at $29.0/oz on Wednesday. On the domestic front, prices declined by 1.5 percent and closed at Rs.53,786/kg after touching an intra-day low of Rs.53,680/kg in yesterdays trade. Appreciation in the Indian Rupee also added downside pressure on the prices.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg Last 29.0 55810.0 Prev day -1.3 0.9

as on 27 February, 2013 WoW 1.6 0.1 MoM -9.5 -4.4 YoY -21.4 -4.8

$/oz $/ oz

2907.0 2894.3

1.1 0.0

-0.1 0.9

-7.3 -7.6

-18.3 -16.3

Rs / kg

53786.0

-1.5

0.1

-8.9

#N/A
Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of upbeat global market sentiments coupled with weakness in the DX. Additionally, favorable economic data from US and optimistic statement from US Fed Chairman will also support an upside in the gold prices. In the Indian markets, appreciation in the Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for February 28, 2013 Support 1592/1586 29640/29520 28.80/28.65 53400/53100 Resistance 1603/1609

Technical Chart Spot Gold

Source: Telequote

29840/29940 29.15/29.35 54000/54300

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Commodities Daily Report

Thursday| February 28, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices gained by 0.1 percent yesterday taking cues from less than expected rise in US crude oil inventories coupled with favorable economic data from the US. In addition, crude oil prices also took support from the failure on Irans nuclear talks with the US. Additionally, weakness in the DX also supported an upside in the prices. Crude oil prices touched an intra-day high of $93.37/bbl and closed at $92.80/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.4 percent on account of appreciation in the Indian Rupee and closed at Rs.5,007/bbl after touching an intra-day low of Rs.4,986/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories rose less than expectations by 1.13 million barrels to 377.53 million barrels for the week ending on 22nd February 2013. Gasoline stocks declined by 1.86 million barrels to 228.54 million barrels and whereas distillate stockpiles gained by 0.56 million barrels to 124.10 million barrels for the last week. 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 92.8 113.4 92.8 Prev. day 0.2 -0.6 0.1 WoW -2.2 -3.4 -1.8 as on 27 February, 2013 MoM -5.2 -2.8 -5.3 YoY -12.9 -9.7 -12.9

$/bbl

111.9

-0.7

-3.2

-2.6

-8.0

Rs/bbl

5007.0

-0.4

-3.0

-3.9

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Mar 13) Unit $/mmbtu Rs/ mmbtu Last 3.416 190.2

(% change)

as on 27 February, 2013

Prev. day -0.96 1.22

WoW 4.46 6.55

MoM -0.96 1.98

YoY 31.49 44.09

Source: Reuters

Technical Chart NYMEX Crude Oil

Natural Gas
EIA Inventories Forecast US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 165 billion cubic feet (bcf) for the week ending on 22nd February 2013. Outlook In todays session, we expect crude oil prices to trade with positive bias due to favorable economic data from US coupled with weakness in the DX. Additionally, optimistic statement from US Fed Chairman Ben Bernanke and ECB President Mario Draghi will also support an upside in the prices. In the Indian markets, appreciation in the Rupee will prevent upside in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude March 13 $/bbl Rs/bbl valid for February 28, 2013
S Source: Telequote

Technical Chart NYMEX Natural Gas

Support 92.65/92.05 4980/4950

Resistance 93.75/74.30 5050/5080

Source: Telequote

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Commodities Daily Report

Thursday| February 28, 2013

International Commodities
Base Metals
The base metals pack traded on a mixed note in the international market. Positive economic data like core durable goods orders and new pending home sales from US coupled with weakness in DX cushioned the downside. Further, the comments from ECB President Mario Draghi that central banks have no intentions of tightening monetary policy to support growth prevented the downside pressure. However, sharp upside in the prices was capped on the back of rise in LME inventories. In the Indian markets, base metals pack traded on negative note on account of appreciation in Indian Rupee. 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 Rs /kg 896.3 -0.9 -2.9 -8.1 $/tonne 16745.0 0.1 -1.8 -8.6 -15.6 Rs /kg 106.1 -1.6 -5.4 -3.6 $/tonne 2019.0 -0.7 -4.1 -3.8 -13.2 Rs/kg 421.4 -1.2 -2.5 -4.7 $/tonne Last 7863.8 Prev. day -0.4 as on 27 February, 2013 WoW -1.3 MoM 0.2 YoY -8.2

Copper
Copper the leader of the base metal pack declined by 0.4 percent in yesterdays trading session on the back of increase in LME inventories by 1.4 percent which stood at 444,350 tonnes. Favourable economic data from US coupled with comments from ECB president Mario Draghi cushioned the downfall in prices. Further, weakness in the DX also prevented sharp fall in the prices. The red metal touched an intra-day low of $7,846.75/tonne and closed at $7,863.75/tonne in the yesterdays trading session. On the domestic front, prices declined by 1.2 percent as a result of appreciation in the Indian Rupee and closed at Rs.421.4/kg after touching an intra-day low of Rs.421/kg on Wednesday. Outlook In the intra-day, we expect base metals prices to trade higher on the back of positive economic data from the US coupled with weakness in the DX. Further, expectations of increase in the US GDP data along with fall in the jobless claims data will also act as a positive factor for the prices. Appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX. 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 valid for February 28, 2013 Support 419/417 111/110.30 123.4/122.5 105.30/104.30 890/883 Resistance 424/427.50 112.5/113.2 125/125.8 106.8/107.5 904/912

(Feb13) LME Lead (3 month) MCX Lead Feb13) LME Zinc (3 month) MCX Zinc (Feb13)
Source: Reuters

$/tonne

2313.0

0.2

-1.9

-5.4

2.8

Rs /kg

124.1

-0.8

-2.2

-4.5

$/tonne

2084.5

-1.1

-2.4

-3.1

-1.6

Rs /kg

111.8

-2.0

-2.7

-1.6

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 27 February 444,350 5,161,100 157,806 1,194,250 287,950
th

26 February 438,375 5,155,775 156,834 1,176,125 288,100

th

Actual Change 5,975 5,325 972 18,125 -150

(%) Change 1.4 0.1 0.6 1.5 -0.1

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Thursday| February 28, 2013

International Commodities
Important Events for Today
Indicator Prelim Industrial Production m/m German Prelim CPI m/m French Consumer Spending m/m German Unemployment Change CPI y/y Core CPI y/y Prelim GDP q/q Unemployment Claims Chicago PMI FOMC Member Raskin Speaks Country Japan Euro Euro Euro Euro Euro US US US US Time (IST) 5:20am All Day 1:15pm 2:25pm 3:30pm 3:30pm 7:00pm 7:00pm 8:15pm 11:00pm Actual 1.0% Forecast 1.6% 0.7% -0.1% -5K 2.0% 1.5% 0.5% 361K 54.6 Previous 2.5% -0.5% 0.0% -16K 2.0% 1.5% -0.1% 362K 55.6 Impact Medium Medium Medium Medium Medium Medium High High Medium Medium

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