Commodities Daily Report

Friday| May 10, 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

Friday| May 10, 2013

International Commodities
Overview
US Unemployment Claims declined to 323,000 for w/e on 3rd May. UKs Manufacturing Production increased by 1.1 percent in March. Japans Current Account at a surplus of 0.34 trillion Yen in March. Asian markets are trading on a higher note today on the back of unexpected decline in US jobless claims data which led to upbeat global market sentiments. US Unemployment Claims declined by 4,000 to 323,000 for the week ending on 3rd May as against a rise of 327,000 in prior week. Mortgage Delinquencies was at 7.25 percent in Q1 of 2013 from earlier rise of 7.09 percent in Q4 of 2012. Wholesale Inventories gained by 0.4 percent in March as compared to decline of 0.3 percent a month ago. The US Dollar Index (DX) increased by 1.1 percent in the yesterdays trading session on the back of weak global market sentiments which led to rise in demand for the low yielding currency. Further, US equities also traded on a negative note which also supported an upside in the currency. However, sharp upside in the DX was capped on account of favorable US jobless claims data. The currency touched an intra-day high of 82.915 and closed at 82.88 on Thursday. The Indian Rupee depreciated by 0.5 percent in yesterdays trading session. The currency depreciated on account of increase in dollar demand from oil and gold importers. Additionally, weak global and domestic market sentiments coupled with strength in the DX exerted downside pressure in the currency. However, sharp downside in the Indian Rupee was cushioned as a result of rise in inflow of foreign funds. The currency touched an intra-day low of 54.35 and closed at 54.35 against dollar on Thursday. For the month of May 2013, FII inflows totaled at Rs.6,731.90 crores ($1,246.09 million) as on 9th May 2013. Year to date basis, net capital inflows stood at Rs.67,768.20 crores ($12,556.40 million) till 9th May 2013. UKs Manufacturing Production increased by 1.1 percent in March as against a rise of 0.7 percent a month ago. Industrial Production grew at slow pace of 0.7 percent in March from increase of 0.9 percent in prior month. Asset Purchase Facility remained unchanged at 375 billion Pounds in the month of May. Official Bank Rate also kept unchanged at 0.5 percent in the current month.

Market Highlights (% change)

Last INR/$ (Spot) 54.35 Prev day -0.5

as on 9 May, 2013 w-o-w -1.0 m-o-m -0.1 y-o-y -1.1

$/Euro (Spot)

1.3041

-0.8

-0.2

-0.5

0.8

Dollar Index NIFTY

82.88

1.1

0.7

0.7

4.3

6050.2

-0.3

0.8

8.2

21.0

SENSEX

19939.0

-0.3

1.0

7.5

9.0

DJIA

15082.6

-0.1

1.7

1.5

17.5

S&P

1626.7

-0.4

1.8

3.6

16.0

Source: Reuters

The Euro depreciated by 0.8 percent in yesterdays trade on the back of strength in dollar index coupled with mixed global market sentiments. Further, European Central Bank (ECB) survey showed that Euro zone economy is expected to contract this year by 0.4 percent added downside pressure on the currency. The Euro touched an intra-day low of 1.3009 and closed at 1.3041 against dollar on Thursday. Japans Current Account at a surplus of 0.34 trillion Yen in March as against a previous deficit of 0.03 trillion Yen a month ago. Bank Lending rose by 1.7 percent in April from earlier increase of 1.5 percent in March.

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Commodities Daily Report

Friday| May 10, 2013

Bullion Gold

International Commodities

Spot gold prices decreased by 1.0 percent in the yesterdays trading session on the back of strength in dollar index. Further, decline in US jobless Claims also added downside pressure on the prices. Additionally, weak economic data from china acted as a negative factor for the prices. However, favourable economic data from UK along with the rise in demand from china cushioned sharp downside in the prices. The yellow metal touched an intra-day low of $1453.2/oz and closed at $1457.7/oz in yesterdays trading session. In the Indian markets, prices ended on positive note in the yesterday trading session on the back of depreciation in the Indian rupee and closed at Rs.27166/10 gms after touching an intra-day high of Rs. 27214/10 gms on Thursday.

Market Highlights - Gold (% change)

Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13) Unit $/oz Rs/10 gms $/oz Last 1457.7 27250.0 Prev. day -1.0 0.9

as on 9 May, 2013 WoW -0.6 1.5 MoM -6.6 -6.4 YoY -8.3 -4.5

1465.5

-0.2

-0.3

-6.4

-7.4

$/oz

1468.8

-0.3

0.3

-2.1

-8.4

Rs /10 gms

27166.0

0.3

0.9

-6.9

-5.3

Source: Reuters

Silver
Taking cues from decline in Spot gold prices coupled with downside in base metals pack, Spot silver prices decreased by 1.0 percent in the yesterdays trading session. Further, strength in dollar index along with weak global market sentiments added downside pressure. However, strong economic data from US and UK cushioned sharp downside in the prices. The white metal prices touched an intra-day low of $23.53 /oz and closed at $23.65/oz in yesterdays trade. On the domestic front, prices increased by 0.6 percent on the back of depreciation in the Indian Rupee and closed at Rs. 45165/kg after touching an intra-day high of Rs. 45439/kg on Thursday.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 23.7 46050.0 Prev day -1.0 1.1

as on 9 May, 2013 WoW -0.6 1.1 MoM -14.3 -12.7 YoY -19.1 -15.2

$/oz $/ oz

2407.0 2387.9

0.9 0.0

1.6 -0.4

-12.7 2.2

-16.3 -18.0

Rs / kg

45165.0

0.6

1.4

-12.6

-18.1

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a negative note on the back of rise in stock markets which has led to decline in demand for safe haven. Further, decline in US initial jobless claims may reduce the precious metal appeal as an alternative investment. Additionally, SPDR gold trust holding is near to 4 years low, which may keep prices under pressure. However, weakness in DX may cushion sharp downside in the prices. In the Indian markets, appreciation in the Indian Rupee may add downside pressure on the prices. Technical Outlook
Unit Spot Gold MCX Gold June13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for May 10, 2013 Support 1452/1444 27000/16850 23.50/23.30 44700/44300 Resistance 1467/1473 27270/27380 23.90/24.10 45400/45800

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Friday| May 10, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.2 percent yesterday taking cues from rise in risk aversion in the global market sentiments which led to expectations of fall in demand for the fuel. Further, Iraq repaired a pipeline to exports crude to Turkey which has an average flow of 335,000 barrels a day also exerted downside pressure on the prices. Strength in the DX also acted as a negative factor for the crude prices. However, sharp downside in the prices was cushioned as a result of decline in US jobless claims coupled with rise in UKs manufacturing production data. Crude oil prices touched an intra-day low of $95.35/bbl and closed at $96.40/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.4 percent as a result of depreciation in the Indian Rupee and closed at Rs.5,227/bbl after touching an intra-day high of Rs.5240/bbl on Thursday. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (May13) MCX Crude (May 13) Unit $/bbl $/bbl $/bbl Last 96.1 104.5 96.4 Prev. day -0.2 -0.2 -0.2 WoW 2.5 3.4 2.6 as on 9 May, 2013 MoM 2.0 -0.7 5.6 YoY -0.7 -7.0 -0.4

$/bbl

104.5

0.1

1.6

-1.7

-7.7

Rs/bbl

5227.0

0.4

4.2

1.8

0.3
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (May 13) Unit $/mmbtu Rs/ mmbtu Last 3.965 216.8 Prev. day -0.1 1.1

as on 9 May, 2013

Natural Gas
Nymex natural gas prices declined around 0.1 percent yesterday on the back of more than expected rise in US natural gas inventories. Additionally, expectations of warm winter weather conditions also exerted downside pressure on the prices. Strength in the DX also acted as negative factor for the prices. Gas prices touched an intra-day low of $3.883/mmbtu and closed at $3.965/mmbtu in yesterdays trading session. On the domestic front, prices gained by more than 1 percent on account of depreciation in the Indian Rupee and closed at Rs.216.80/mmbtu after touching an intra-day high of Rs.218.40/mmbtu on Thursday. EIA Inventories Forecast US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory increased more than expectations by 88 billion cubic feet (bcf) which stood at 1.865 trillion cubic feet for the week ending on 3rd May 2013. Outlook In todays session, we expect crude oil prices to trade lower on the back of restore of pipeline in Iraq which will lead to increase in supply and add downside pressure on the prices. Further, cut in the global demand for crude oil by EIA coupled with expectations of increase in OPEC output by more than 2 percent will also exert downside pressure on the oil prices. However, weakness in the DX along with upbeat global market sentiments will prevent sharp fall in the crude prices. In the Indian markets, appreciation in the Rupee will act as a negative factor for the oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude May13 $/bbl Rs/bbl valid for May 10, 2013 Support 95.50/94.80 5190/5150 Resistance 96.60/97.70 5250/5310

WoW -1.90 -0.50

MoM 0.13 0.05

YoY 75.13 78.73

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Friday| May 10, 2013

International Commodities
Base Metals
The base metals pack traded on a negative note on the back of strength in dollar index coupled with weak global market sentiments. Further, European Central Bank (ECB) survey showed that the euro zone economy is expected to contract by 0.4 percent in the current year added downside pressure. Additionally, weak economic data from China acted as a negative factor for the prices. However, favourable economic data from US and UK cushioned sharp downside in the prices. In the Indian market appreciation in the Indian rupee capped sharp upside in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (April13) LME Nickel (3 month) MCX Nickel (April13) LME Lead (3 month) MCX Lead (April13) Rs /kg 109.6 -1.6 4.6 -3.3 -1.9 $/tonne 2023.3 -2.1 3.9 -3.2 -2.7 Rs /kg 835.3 0.3 5.1 -5.5 -10.4 $/tonne 15387.0 -0.1 4.4 -5.2 -10.9 Rs /kg 102.2 -0.2 5.0 -1.1 -6.9 $/tonne 1891.3 -0.9 3.8 -1.4 -7.9 Rs/kg 402.6 -0.3 8.2 -2.9 -8.2 $/tonne Last 7356.5 Prev. day -0.9 as on 9 May, 2013 WoW 7.3 MoM -6.2 YoY -8.9

Copper
Copper, the leader of the base metal pack decreased by 0.9 percent on the back of strength in dollar index coupled with weak global market sentiments. Further, weak economic data from china added downside pressure on the prices. Additionally, ECB survey showed that the economy is expected to contract by 0.4 percent in the current year which increased the worries over demand for copper. However, decline in LME inventories coupled with decline in US unemployment claims cushioned sharp fall in the prices. The red metal touched an intra-day low of $7300/tonne and closed at $7356.5/tonne in yesterdays trading session. On the domestic front, prices ended on negative note and closed at Rs. 402.6/kg on Thursday after touching an intra-day low of Rs 399.3 kg. Depreciation in the Indian rupee prevented sharp downside in the prices. Outlook In the intra-day, we expect base metals prices to trade on the negative note as the rise in Chinas inflation has increased the worries among the investors that this may curb further stimulus measures from the country. Additionally, concerns over the demand for base metals has increased as the ECB survey showed that euro zone economy is expected to contract by 0.4 percent in the current year. However, expectation of favourable economic data from Germany and UK along with weakness in DX may cushion sharp fall in the prices. In the Indian markets, appreciation in the Indian Rupee may add downside pressure on the prices. Technical Outlook
MCX Copper April13 MCX Zinc April 13 MCX Lead April 13 MCX Aluminum April13 MCX Nickel April 13 Unit Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for May 10, 2013 Support 399/396 100.4/99.5 108.8/108 101.5/100.5 827/817 Resistance 405/408 102/103.8 110.5/111.5 103/103.8 844/852

LME Zinc (3 month) MCX Zinc (April13)

$/tonne

1875.0

-1.2

2.5

-2.5

-4.1

Rs /kg

101.1

-0.6

3.3

-2.5

-4.1

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 9th May 605,750 5,151,950 178,398 1,044,300 247,100 8th May 605,825 5,142,325 178,482 1,049,500 248,200 Actual Change -75 9,625 -84 -5,200 -1,100 (%) Change 0.0 0.2 0.0 -0.5 -0.4
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| May 10, 2013

International Commodities
Important Events for Today
Indicator Current Account New Loans Trade Balance G7 Meetings FOMC Member Evans Speaks Fed Chairman Bernanke Speaks FOMC Member George Speaks Federal Budget Balance Country Japan China UK All US US US US Time (IST) 5:20am 10 -15
th th

Actual 0.34T -

Forecast 0.48T 770B -8.9B 93.9B

Previous 0.00T 1060B -9.4B -106.5B

Impact High Medium Medium High Medium High Medium Medium

2:00pm Day 1 5:55pm 7:00pm 11:30pm 11.30pm

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