Commodities Daily Report

Wednesday| May 22, 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

Wednesday| May 22, 2013

International Commodities
Overview
German PPI remained unchanged at -0.2 percent in April. UKs CPI declined to 2.4 percent in the month of April. UKs Producer Price Index (PPI) Input declined by 2.3 percent in April. Japans Trade Balance was at deficit of 0.76 trillion Yen in last month. Asian market is trading in green taking cues from the US stock markets. Further, investors are looking forward to outcome of Bank of Japans (BOJ) policy meeting. The US Dollar Index (DX) gained by 0.1 percent in the yesterdays trading session on the back of rise in risk aversion in the global market sentiments in the early part of the trade which led to increase in demand for the low yielding currency. However, sharp upside in the currency was capped on account of expectations that US Federal Reserve will not end its bond buying program soon. Further, positive US equities markets also prevented sharp rise in the DX. The currency touched an intra-day high of 84.3 and closed at 83.96 on Tuesday. The Indian Rupee depreciated by 0.7 percent in yesterdays trading session. The currency depreciated on account of increase in dollar demand from gold and crude oil importers. Additionally, weak global and domestic market sentiments also exerted downside pressure on the currency. Further, strength in the DX also acted as a negative factor for the Indian Rupee. The currency touched an intra-day low of 55.47 and closed at 55.42 against dollar on Tuesday. For the month of May 2013, FII inflows totaled at Rs.13,985.40 crores ($2,578.03 million) as on 21st May 2013. Year to date basis, net capital inflows stood at Rs.75,021.80 crores ($13,888.40 million) till 21st May 2013. UKs CPI declined to 2.4 percent in April as compared to 2.8 percent in March. Producer Price Index (PPI) Input declined by 2.3 percent in April as against a decline of 0.1 percent in March. Retail Price Index (RPI) declined by 2.2 percent in last month from earlier increase of 3.3 percent in March. Core CPI was at 2.0 percent in April as compared to rise of 2.4 percent a month ago. House Price Index (HPI) increased by 2.7 percent in March with respect to 1.9 percent in earlier month. PPI Output declined by 0.1 percent in April when compared to 0.3 percent in March.

Market Highlights (% change)

Last INR/$ (Spot) 55.42 Prev day -0.7

as on 21 May, 2013 w-o-w -1.1 m-o-m -2.1 y-o-y -0.8

$/Euro (Spot)

1.2905

0.2

-0.1

-0.7

0.7

Dollar Index NIFTY

83.96

0.1

0.3

0.9

5.7

6114.1

-0.7

2.0

4.7

25.0

SENSEX

20111.6

-0.6

2.0

4.9

10.0

DJIA

15387.6

0.3

1.1

4.8

23.1

S&P

1669.2

0.2

1.1

7.3

26.8

Source: Reuters

The Euro appreciated by 0.2 percent in yesterdays trade on the back of optimistic global market sentiments. However, sharp rise in the currency was capped on the back of strength in DX coupled with weak economic data from Germany. German Producer Price Index (PPI) remained unchanged at -0.2 percent in the month of April. The Euro touched an intra-day high of 1.2933 and closed at 1.2905 against dollar on Tuesday. Japans Trade Balance was at a deficit of 0.76 trillion Yen in April as against a earlier deficit of 0.92 trillion Yen in March.

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Commodities Daily Report

Wednesday| May 22, 2013

International Commodities
Bullion Gold
Market Highlights - Gold (% change) Spot gold prices decreased by 1.3 percent in the yesterdays trading session on the back of rise in stock markets, as the demand for safe haven reduced. Additionally, SPDR gold trust holding continued to decline, which added downside pressure on the prices. Further, fears among the investors that the US Federal Reserve may start trimming its bond buying purchasing programme kept prices under pressure. The yellow metal touched an intra-day low of $1359.44/oz and closed at $1375.4/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.26110/10 gms after touching an intra-day high of Rs. 26362/10 gms on Tuesday.
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13) Unit $/oz Rs/10 gms $/oz Last 1375.4 26010.0 Prev. day -1.3 1.8 as on 21 May, 2013 WoW -3.5 -2.5 MoM -2.6 -1.3 YoY -13.5 -10.8

1360.8

0.4

-5.1

-3.4

-14.6

$/oz

1377.8

0.9

-3.3

-2.2

-12.5

Rs /10 gms

26110.0

0.1

-2.2

-0.2

-10.1

Source: Reuters

Silver
Taking cues from decline in spot gold prices along with downside in the base metal packs, Spot silver prices decreased by 2.4 percent in the yesterdays trading session. Further, strength in DX coupled with weak economic data from Germany and UK added downside pressure on the prices. However, optimistic global market sentiments cushioned sharp fall in the prices. The white metal prices touched an intra-day low of $22.05 /oz and closed at $22.4/oz in yesterdays trade. On the domestic front, prices decreased by 0.2 percent taking cues from spot silver prices and closed at Rs. 43170/kg after touching an intra-day low of Rs. 42420/kg on Tuesday.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 22.4 44020.0 Prev day -2.4 2.4

as on 21 May, 2013 WoW -4.2 -2.9 MoM -2.3 -2.5 YoY -21.3 -19.6

$/oz $/ oz

2244.0 2244.2

3.6 0.0

-4.3 -0.9

-2.5 -7.0

-21.0 -20.3

Rs / kg

43170.0

-0.2

-3.0

0.8

-20.2

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of weakness in DX. Further, expectations that US Federal Reserves may start trimming bound buying purchasing programme got faded after the US Federal Reserves officials statements, which may support prices to trade in green. However, SPDR gold trust holding fell by 0.8 percent to 1023.08 tonnes on Tuesday lowest in more than 4 years, may cushion sharp upside in the prices. In the Indian markets, appreciation in the Indian Rupee may prevent sharp rise in 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 22, 2013 Support 1372/1364 26000/25850 22.30/22.00 42600/42100 Resistance 1385/1393 26250/26400 22.80/23.10 43700/44200
Source: Telequote

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Commodities Daily Report

Wednesday| May 22, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.6 percent taking cues from unexpected rise in the US crude oil inventories from API. Further, strength in the DX also exerted downside pressure on the crude oil prices. However, sharp downside in the prices was cushioned on account of mixed sentiments for bond buying program from US Federal Reserve. Crude oil prices touched an intra-day low of $95.50/bbl and closed at $96.20/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.3 percent as a result of depreciation in the Indian Rupee and closed at Rs.5,347/bbl after touching an intra-day high of Rs.5384/bbl on Tuesday. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories gained unexpectedly by 471,000 barrels to 390.74 th million barrels for the week ending on 17 May 2013. Gasoline inventories rose by 3.0 million barrels to 219.51 million barrels and whereas distillate inventories shoot up by 459,000 barrels to 118.38 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is th expected to fall by 0.8 million barrels for the week ending on 17 May 2013. Gasoline stocks are expected to remained unchanged whereas distillate inventories are expected to gain by 0.9 million barrels for the same period. Outlook From the intra-day perspective, we expect crude oil prices to trade higher on the back of rise in risk appetite in the global market sentiments coupled with weakness in the DX. Additionally, expectations of decline in US crude oil inventories from the US Energy Department will support an upside in the oil prices. However, sharp upside in the crude prices will be capped on account of unexpected rise in US crude oil inventories from API in yesterdays trade. In the Indian markets, appreciation in the Rupee will prevent sharp upside in the crude oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude May13 $/bbl Rs/bbl valid for May 22, 2013 Support 94.90/94.20 5300/5260 Resistance 96.70/97.60
Source: Telequote Source: Telequote

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 95.6 103.6 96.2 Prev. day -0.8 -1.4 -0.6 WoW 1.7 0.7 2.1

as on 21 May, 2013 MoM 7.1 3.2 5.2 YoY 3.2 -5.6 3.9

$/bbl

103.9

-0.8

1.3

3.6

-4.5

Rs/bbl

5347.0

0.3

3.0

10.3

5.7
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (May 13) Unit $/mmbtu Rs/ mmbtu Last 4.189 232.7 Prev. day 2.4 2.7

as on 21 May, 2013

WoW 4.20 6.16

MoM -4.62 -1.65

YoY 58.14 58.51

Source: Reuters

Technical Chart NYMEX Crude Oil

Technical Chart NYMEX Natural Gas

5400/5450

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Commodities Daily Report

Wednesday| May 22, 2013

International Commodities
Base Metals
The base metals pack traded on a negative note on the back of strength in DX. Further, weak economic data from Germany and UK added downside pressure on the prices. Additionally, expectations among the investors that the US Federal Reserves may start trimming bond buying programme soon which kept prices under pressure. However, upbeat global market sentiments cushioned sharp downside in the prices. In the Indian market depreciation in the Indian rupee supported prices to trade in green on MCX, platform. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (April13) Rs /kg 101.5 0.1 0.4 0.0 -8.3 $/tonne 1855.8 -0.3 0.0 -1.7 -9.4 Rs/kg 409.7 0.2 2.5 10.8 -4.0 $/tonne Last 7361.8 Prev. day -0.4 as on 21 May, 2013 WoW 1.6 MoM -6.2 YoY -5.1

Copper
Copper, the leader of the base metal pack decreased by 0.4 percent on the back of strength in DX. Further, weak economic data from Germany and UK added downside pressure on the prices. Additionally, rise in worries over demand from China kept prices under pressure. However, decline in LME inventories by 0.6 percent to 624,525 tonnes along with upbeat global market sentiments cushioned sharp fall in the prices. The red metal touched an intra-day low of $7328.5/tonne and closed at $7361.8/tonne yesterdays trading session. On the domestic front, prices ended on positive note on the back of depreciation in the Indian Rupee and closed at Rs. 409.7/kg on Tuesday after touching an intra-day high of Rs 414.9 kg. Outlook In the intra-day, we expect base metals prices to trade on the positive note on the back of rise in risk appetite in the global market sentiments coupled with weakness in DX. Further, Indications that US Federal Reserves would continue with its bond buying programme may support prices to trade in green. Additionally, expectations of rise in US Existing Home sales may act as a positive factor for the prices. However, investors will keep an eye on US Fed Chairman Bernanke speech which may keep cap sharp upside in the prices. In the Indian markets, appreciation in the Indian Rupee may prevent sharp rise in the prices Technical Outlook
Unit MCX Copper April13 MCX Zinc April 13 MCX Lead April 13 MCX Aluminum April13 MCX Nickel April 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for May 22, 2013 Support 407/403 100.5/99.8 111.8/110.8 100.8/100 823/816 Resistance 413/416 102/102.8 113.5/114.5 102.3/103.0 838/845

LME Nickel (3 month) MCX Nickel (April13) LME Lead (3 month) MCX Lead (April13) LME Zinc (3 month) MCX Zinc (April13)

$/tonne

15026.0

-0.3

-0.6

-0.5

-12.5

Rs /kg

830.1

0.3

0.3

1.4

-11.8

$/tonne

2040.0

-0.1

3.2

1.6

4.5

Rs /kg

112.5

0.4

4.0

3.8

5.1

$/tonne

1850.0

-0.3

0.3

-1.2

-3.1

Rs /kg

101.2

0.0

0.9

1.0

-3.4

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 21st May 624,525 5,225,650 178,758 1,111,275 237,925 20th May 628,025 5,231,125 178,758 1,114,175 239,375 Actual Change -3,500 -5,475 0 -2,900 -1,450 (%) Change -0.6 -0.1 0.0 -0.3 -0.6
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Wednesday| May 22, 2013

International Commodities
Important Events for Today
Indicator Trade Balance Monetary Policy Statement BOJ Press Conference Current Account MPC Meeting Minutes Retail Sales m/m Public Sector Net Borrowing German 10-y Bond Auction EU Economic Summit CBI Industrial Order Expectations MPC Member Bean Speaks Existing Home Sales Fed Chairman Bernanke Testifies Treasury Sec Lew Speaks Crude Oil Inventories FOMC Meeting Minutes Country Japan Japan Japan Europe UK UK UK Europe Europe UK UK US US US US US Time (IST) 5:20am Tentative Tentative 1:30am 2:00pm 2:00pm 2:00pm Tentative All Day 3:30pm 4:30pm 7:30pm 7:30pm 7:30pm 8:00pm 11:30pm Actual -0.76T Forecast -0.61T 14.2B 0-0-9 0.0% 7.6B -17 4.99M -0.8M Previous -0.92T 16.3B 0-0-9 -0.7% 16.7B 1.28/1.6 -25 4.92M -0.6M Impact Medium High High Medium High High Medium Medium Medium Medium Medium High High Medium Medium High

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