Commodities Daily Report

Monday| March 25, 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 (022) 2921 2000 Extn :6130 Saif Mukadam Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Monday| March 25, 2013

International Commodities
Overview
German Ifo Business Climate declined to 106.7-mark in March. Cyprus agrees a bailout deal for 10 million Euros to prevent default. Belgium NBB Business Climate was at -15-mark in the last month. Asian markets are trading higher today on the back of European Finance Ministers agreeing a bailout deal for Cyprus thereby reducing the threats for default of the nation. The European Union, European Central Bank (ECB) and International Monetary Fund (IMF) have agreed a aid package of 10 billion Euros ($13 billion) for the Cyprus nation. As per the agreement the Cyprus Popular Bank Pcl (CPB) will be shutdown and spilt. Bank of Cyprus will take over the assets of the closed bank along with 9 billion Euros in central bank which was provided for emergency liquidity aid. US Dollar Index (DX) appreciated by 0.3 percent in the last week 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, European Union giving ultimatum to Cyprus to seek the bailout of 5.8 billion Euros which the nation was struggling to agree thereby worsening the Euro Zone debt crisis also supported an upside in the currency. Unfavorable economic data from Euro Zone also acted as a positive factor for the DX. However, sharp upside in the currency was capped on account of favorable economic data from the US. The currency touched a weekly high of 83.315 and closed at 82.529 on Friday. On a weekly basis, Indian Rupee depreciated by 0.6 percent. The currency depreciated on the back of DMK withdrawing its support from the UPA government which created political uncertainty in the nation. Further, weak global market sentiments coupled with strength in the DX exerted downside pressure on the currency. However, sharp downside in the currency was cushioned as a result of selling of dollars from exporters and custodian banks. The Indian Rupee touched a low of 54.56 in the last week and closed at 54.34 against dollar on Friday. For the month of March 2013, FII inflows totaled at Rs.7,546.80 crores nd ($1,384.39 million) as on 22 March 2013. Year to date basis, net capital nd inflows stood at Rs.54,044.90 crores ($10,019.0 million) till 22 March 2013.

Market Highlights (% change)

Last INR/$ (Spot) 54.34 Prev day 0.2

as on 22 March, 2013 w-o-w -0.6 m-o-m -0.1 y-o-y -5.6

$/Euro (Spot)

1.2985

0.7

-0.7

-1.5

-1.6

Dollar Index NIFTY

82.53

-0.5

0.3

1.2

3.9

5651.4

-0.1

-3.8

-3.4

7.1

SENSEX

18735.6

-0.3

-3.6

-3.0

2.4

DJIA

14512.0

0.6

0.0

5.3

11.2

S&P

1556.9

0.7

-0.2

2.7

11.8

Source: Reuters

The Euro depreciated by 0.7 percent in the last week as ECB said it may cut the emergency fund to Cyprus bank after March 25 if a Cyprus does not come with a plan to ensure bank solvency. Further, unfavorable economic data from Euro region coupled with strength in the DX added downside pressure on the currency. German Ifo Business Climate declined by 0.7 points to 106.7mark in March as against a rise of 107.4-level in February. Belgium National Bank of Belgium (NBB) Business Climate was at -15-mark in March from previous fall of 11-level in the last month. The Euro touched a low of 1.2843 in the last week and closed at 1.2985 against dollar on Friday.

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Commodities Daily Report

Monday| March 25, 2013

International Commodities
Bullion Gold
Spot gold prices increased by 1 percent in the last week on the back of worries over Cyprus bailout as ECB said it may cut the emergency fund to Cyprus bank after March 25 if a nation does not come with a plan to ensure bank solvency, driving investors to buy gold as safe haven. However, strength in the DX capped sharp gains in the prices. The yellow metal touched a weekly high of $1616.36/oz and closed at $1607.95/oz in last trading session of the week. In the Indian markets, prices gained by 1.1 percent on account of depreciation in the Indian Rupee and closed at Rs.29676/10 gms on Friday after touching an intra-day high of Rs. 29889/10 gms in the last week. Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined around 1 percent to 1,221.26 tonnes th as on 22nd March 2013 from earlier level of 1,233 tonnes on 15 March 2013. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13) Unit $/oz Rs/10 gms $/oz Last 1608.0 29725.0 Prev. day -0.4 0.3 as on 22 March, 2013 WoW 1.0 1.3 MoM 1.7 1.6 YoY -2.1 6.7

1607.8

-0.4

0.8

2.0

-1.7

$/oz

1606.2

-0.5

0.1

-0.6

-2.2

Rs /10 gms

29676.0

-0.5

1.1

0.6

6.3

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 28.7 55100.0 Prev day -1.6 0.2

as on 22 March, 2013 WoW -0.2 0.9 MoM -0.1 -0.1 YoY -9.1 -1.9

Silver
Taking cues from fall in base metals prices along with strength in the DX, Spot silver prices declined around 0.2 percent in the last week. However, sharp downside in the prices was cushioned as a result of positive movement in gold prices. The white metal prices touched a low of $28.53 /oz in the last week and closed at $28.67/oz in the last trade of the week. On the domestic front, prices fell by 0.1 percent and closed at Rs. 54125/kg on Friday after touching a weekly low of Rs. 53972/kg. Depreciation in the Indian rupee prevented sharp fall in prices. Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, declined around 0.42 percent at 10688.56 tonnes on 22nd March 2013 from previous 10733.66 tonnes as on th 15 March 2013.

$/oz $/ oz

2906.0 2866.6

0.5 -1.8

0.5 -0.5

0.9 -1.1

-8.6 -8.5

Rs / kg

54125.0

-1.7

-0.1

1.5

-3.9

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a negative note as the finance ministers from EU approved the bailout package to Cyprus, weakening the demand for safe haven. However, weakness in DX may cushion sharp downfall in prices. In the Indian market, appreciation in the Indian Rupee will add further downside pressure. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for March 25, 2013 Support 1602.5/1596.5 29615/29555 28.40/28.11 53735/53345 Resistance 1615.40/1622 29771/29870 29.08/29.49 54620/55260
Source: Telequote

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Commodities Daily Report

Monday| March 25, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 0.3 percent in the last week taking cues from unexpected decline in US crude oil inventories, cut in crude shipments from OPEC, favorable manufacturing data from US and China along with shut down in Libya. However, sharp upside in the prices was capped as a result of decline in manufacturing data from Euro Zone coupled with fall in European economic sentiments. Strength in the DX also prevented sharp gains in the prices. Crude oil prices touched a weekly high of $94.09/bbl and closed at $93.71/bbl in last trading session of the week. On the domestic bourses, prices gained by 0.6 percent on the back of depreciation in the Indian Rupee and closed at Rs.5089/bbl on Friday after touching a high of Rs.5114./bbl in the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (April13) MCX Crude (April 13) Unit $/bbl $/bbl $/bbl Last 93.4 107.7 93.7 Prev. day 1.0 0.1 1.4 WoW -0.1 -2.5 0.3 as on 22 March, 2013 MoM 0.3 -6.3 0.6 YoY -11.0 -12.7 -11.0

$/bbl

107.7

0.2

-2.0

-5.6

-12.6

Rs/bbl

5089.0

0.7

0.6

0.4

-6.1
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Mar 13) Unit $/mmbtu Rs/ mmbtu Last 3.937 213.8 Prev. day 0.2 -0.3

as on 22 March, 2013

WoW 1.94 2.44

MoM 20.10 20.32

YoY 74.05 81.03

Source: Reuters

Natural Gas
On a weekly basis, Nymex natural gas prices increased around 2 percent. However, sharp upside in the prices was capped as a result of less than expected decline in US natural gas inventories coupled with forecast for warmer weather conditions. Strength in the DX also prevented further gains in the prices. Gas prices touched a weekly high of $4.025/mmbtu and closed at $3.937/mmbtu in the last trade of the week. On the domestic front, prices gained by 2.4 percent on the back of depreciation in the Indian Rupee and closed at Rs.213.80/mmbtu on Friday after touching a high of Rs.218.90/mmbtu in the last week. Outlook

Technical Chart NYMEX Crude Oil

Source: Telequote

From the intra-day perspective, we expect crude oil to trade on positive note on the back of rise in risk appetite in the global market sentiments after European Finance Ministers agrees to provide aid to Cyprus nation. This will ease the Euro Zone debt crisis which will increase the demand for the fuel. Additionally, weakness in the DX will also support an upside in the prices. In the Indian markets, appreciation in the Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude April 13 $/bbl Rs/bbl valid for March 25, 2013 Support 93.35/92.75 5090/5058 Resistance 94.40/94.95 5147/5177

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Monday| March 25, 2013

International Commodities
Base Metals
The base metals pack traded lower in the last week on the back of weak global market sentiments, unfavourable economic data from Euro Zone along with strength in the DX. However, sharp downside in the prices was cushioned as a result of favourable manufacturing data from US and China coupled with mixed LME inventories On the MCX, depreciation in the Indian Rupee prevented further fall in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (Mar13) LME Nickel (3 month) MCX Nickel (Mar13) LME Lead (3 month) MCX Lead (Mar13) LME Zinc (3 month) MCX Zinc (Mar13)
Source: Reuters

as on 22 March, 2013 WoW -1.2 MoM -2.3 YoY -7.8

Last 7668.0

Prev. day 0.8

$/tonne

Rs/kg

419.2

0.7

-1.0

-1.0

-2.5

$/tonne

1949.0

1.1

-0.8

-4.8

-10.4

Copper
Copper, the leader of the base metal pack declined by 1.2 percent in the last week on the back of negative economic data from Euro zone coupled with strength in the DX. Additionally, Cyprus bailout issue, weak global market sentiments along with rise in LME and Shanghai copper inventories exerted downside pressure on prices. However, sharp downside in the prices was cushioned on account of favourable manufacturing data from US and China and rise in US existing home sales data. The red metal touched a weekly low of $7,486.25/tonne and closed at $7,668/tonne in the last trading session of the week. On the domestic front, prices declined by 1 percent and closed at Rs. 419.20/kg on Friday after touching a low of Rs 411.90/kg in the last week. Depreciation in the Indian Rupee prevented further fall in the prices. Copper Inventories LME copper inventories gained around 7 percent in the last week nd and stood at 562,475 tonnes as on 22 March, 2013 as against th 525,825 tonnes as on 15 March, 2013. Copper inventories in the warehouse monitored by the Shanghai rose by 3.2 percent and stood at 239,273 tonnes for the week nd ending on 22 March, 2013. Outlook In the intra-day, we expect base metals prices to trade on the positive note on the back of upbeat global market sentiments after ease in the Euro Zone debt crisis. Weakness in the DX will also act as a positive factor for the prices. Appreciation in the Indian Rupee will cap sharp gains. Technical Outlook
MCX Copper April13 MCX Zinc Mar 13 MCX Lead Mar 13 MCX Aluminum Mar13 MCX Nickel Mar 13 Unit Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 25, 2013 Support 416.20/413.30 104.7/104.1 118/117.2 104.1/103.45 724.7/917 Resistance 421/423 106.5/107.5 120.1/121.2 105.6/106.2 937/945

Rs /kg

104.7

1.3

0.0

-4.1

-5.0

$/tonne

17122.0

1.5

1.1

1.0

-7.0

Rs /kg

929.5

1.3

1.6

1.3

-1.8

$/tonne

2195.0

1.0

-1.2

-4.9

10.0

Rs /kg

118.5

0.9

-1.0

-5.0

15.9

$/tonne

1954.8

0.9

-0.2

-6.3

-2.0

Rs /kg

105.3

0.9

0.4

-6.3

3.3

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 22nd March 562,475 5,230,025 162,762 1,193,825 268,475 21st March 557,450 5,229,825 162,288 1,195,825 269,975 Actual Change 5,025 200 474 -2,000 -1,500 (%) Change 0.9 0.0 0.3 -0.2 -0.6
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Monday| March 25, 2013

International Commodities
Important Events for Today
Indicator BBA Mortgage Approvals Fed Chairman Bernanke Speaks Country UK US Time (IST) 3:00pm 10:45pm Actual Forecast 33.6K Previous 32.3K Impact Medium High

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