Commodities Daily Report

Tuesday| July 2, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Reena Rohit Chief Manager Non-Agri Currencies and Commodities Reena.rohit@angelbroking.com (022) 2921 2000 Extn :6134 Anish Vyas Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Tuesday| July 2, 2013

International Commodities
Overview
Indias HSBC Manufacturing PMI increased to 50.3-mark in last month. US ISM Manufacturing PMI gained by 1.9 points to 50.9-mark in June. European Unemployment Rate also rose to 12.1 percent in May. UKs Manufacturing PMI shoot up to 52.5-mark in prior month. Asian markets are trading higher today on the back of favorable manufacturing data from US in yesterdays trade showing signs of recovery in worlds largest economy. US Final Manufacturing Purchasing Managers' Index (PMI) declined by 0.3 points to 51.9-mark in June as against a rise of 52.2-level in May. Institute for Supply Management (ISM) Manufacturing PMI gained by 1.9 points to 50.9-mark in June from 49-level a month ago. Construction Spending was at 0.5 percent in May as compared to 0.1 percent a month earlier. ISM Manufacturing Prices rose by 3 points to 52.5-mark in June with respect to 49.5-level in prior month. Indias HSBC Markit Manufacturing Purchasing Managers Index (PMI) increased by 0.2 points to 50.3-mark in June as against a rise of 50.1-level in May. The US Dollar Index (DX) declined around 0.1 percent in the yesterdays trade on the back of rise in risk appetite in the global markets which led to fall in demand for the low yielding currency. Further, favorable economic data from the US exerted downside pressure in the currency. The DX touched an intra-day low of 83.18 and closed at 83.25 on Monday. The Indian Rupee traded on a mixed note in yesterdays trading session. The currency opened on a depreciation mode but recovered its losses and appreciated during the day on account of upbeat domestic markets, favorable manufacturing data from India which came better than forecast along with weakness in the DX. Additionally, expectations of corporate inflows through Unilevers open offer coupled with foreign funds by foreign institutional investors after a constant 13 days of selling supported an upside in the currency during the day. However, in the later part of the trade near closing hours there was huge dollar demand from importers which wiped off the days gains and the currency ended on a weaker note and ended with losses of 0.2 percent. The currency touched an intra-day low of 59.593 and closed at 59.38 on Monday. For the month of June 2013, FII outflows totaled at Rs.11,026.90 crores th ($1,852.15 million) as on 28 June 2013. Year to date basis, net capital inflows stood at Rs.72,178.20 crores ($13,500.80 million) till 28th June 2013. UKs Manufacturing Purchasing Managers' Index (PMI) increased by 1.2 points to 52.5-mark in June as against a rise of 51.3-level in May. Net Lending to Individuals was at 1 billion Pounds in May from 1.3 billion Pounds a month ago. www.angelcommodities.com

Market Highlights (% change)

Last INR/$ (Spot) 59.375 Prev day 0.2

as on 1 July, 2013 w-o-w 0.7 m-o-m -5.3 y-o-y -6.7

$/Euro (Spot)

1.3063

0.4

-0.4

0.1

3.8

Dollar Index NIFTY

83.25

-0.1

0.8

0.7

4.8

5898.9

1.0

5.5

-3.7

14.6

SENSEX

19577.4

0.9

5.6

-3.2

7.0

DJIA

14975.0

0.4

2.2

-1.3

16.3

S&P

1615.0

0.5

2.7

-1.0

26.4

Source: Reuters

The Euro appreciated around 0.4 percent in the yesterdays trade on the back of weakness in the DX. Further, favorable economic data from the region coupled with upbeat global markets supported an upside in the currency. The Euro touched an intra-day high of 1.3066 and closed at 1.3063 against the dollar on Monday. Spanish Manufacturing Purchasing Managers' Index (PMI) increased by 1.9 points to 50-mark in June as against a rise of 48.1-level in May. Italian Manufacturing PMI rose by 1.8 points to 49.1-level in last month from 47.3-level a month ago. European Final Manufacturing PMI gained by 0.1 points to 48.8-mark in June as compared to 48.7-level in prior month. Italian Monthly Unemployment Rate rose to 12.2 percent in May with respect to gain of 12 percent a month earlier. European Unemployment Rate also rose to 12.1 percent in May from 12 percent a month ago.

Commodities Daily Report

Tuesday| July 2, 2013

International Commodities
Bullion Gold
Spot gold prices gained around 1.6 percent in yesterdays trading session on the back of weakness in the DX. Further, upbeat global markets supported an upside in the prices. The yellow metal touched an intra-day high of $1260.61/oz and closed at $1252.80/oz in yesterdays trade. In the Indian markets, prices ended on a positive note, increasing 1.5 percent as a result of depreciation in the Rupee. The commodity closed at Rs.25981/10 gms after touching an intra-day high of Rs. 26075/10 gms on Monday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1252.8 Prev. day 1.6 as on 1 July, 2013 WoW -2.2 MoM -11.4 YoY -21.5

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (August13) MCX Gold (August13)

Rs/10 gms $/oz

25750.0

3.2

-3.7

-4.1

-12.6

1242.8

4.3

-3.4

-12.1

-21.9

$/oz

1255.9

2.6

-1.5

-10.2

-21.7

Silver
Spot silver prices fell around 0.3 percent in yesterdays trading session. However, sharp downside in prices was cushioned on account of rise in gold prices, upside in base metals complex along with weakness in the DX. The white metal touched an intra-day low of $19.39/oz and closed at $19.60/oz in yesterdays trading session. On the domestic front, prices fell 1.0 percent on the back of appreciation in the Indian Rupee in early part of the trade and closed at Rs.40,067/kg after touching an intra-day low of Rs.39,690/kg on Monday.

Rs /10 gms

25981.0

1.5

-2.8

-4.3

-12.4

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 19.6 40970.0 Prev day -0.3 2.2

as on 1 July, 2013 WoW -0.5 -2.8 MoM -13.9 -10.0 YoY -28.8 -22.8

$/oz $/ oz

1944.0 19.6

3.1 0.0

-1.1 0.2

-14.3 -12.9

-28.9 -28.8

Outlook
Precious metals prices in todays trade are expected to trade higher taking cues from bounce back in prices towards the closing hours in yesterdays trade and is expected to continue today also on account of supportive buying seen at lower levels. Further, weakness in the DX coupled with positive global markets will support an upside in the prices. In the Indian markets, appreciation in the Rupee will cap sharp gains in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for July 2, 2013 Support 1254/1246 25900/25750 19.50/19.20 40300/39800 Resistance 1262/1268 26070/26200 19.90/20.30 41200/41800

Rs / kg

40067.0

-1.0

-1.9

-9.8

-23.2

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Tuesday| July 2, 2013

International Commodities
Energy
Market Highlights - Crude Oil (% change)
as on 1 July, 2013 WoW 4.1 3.0 MoM 1.9 5.0 YoY 9.0 15.3

Crude Oil
Crude Oil Unit $/bbl $/bbl Last 104.1 98.0

Nymex crude oil prices increased around 1.5 percent in yesterdays trade; taking cues from favorable economic data from US and Euro Zone which increased the expectations of rise in demand for the fuel. Further, optimistic global markets coupled with weakness in the DX supported an upside in the prices. Crude oil prices touched an intra-day high of $98.28/bbl and closed at $98.0/bbl in yesterdays trading session. On the domestic bourses, prices gained 0.4 percent and closed at Rs.5,828/bbl after touching an intra-day high of Rs.5,848/bbl on Monday. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 2.7 million barrels for the week ending on 28th June 2013. Gasoline stocks are expected to gain by 0.4 million barrels and distillate inventories are expected to shoot up by 1.1 million barrels for the same week. Outlook From the intra-day perspective, we expect crude oil prices to trade higher on the back of expectations of decline in API crude oil inventories. Further, weakness in the DX coupled with positive global markets will support an upside in the prices. Additionally, forecast for favorable economic data from the US and Euro Zone will act as a positive factor. In the Indian markets, appreciation in the Rupee will cap sharp gains in oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude July13 $/bbl Rs/bbl valid for July 2, 2013 Support 97.10/96.40 5780/5740 Resistance 98.70/99.80 5880/5940

Brent (Spot) Nymex Crude (Aug 13) ICE Brent Crude (Aug13) MCX Crude (July 13)

Prev. day -0.2 1.5

$/bbl

103.0

0.8

1.8

0.8

5.8

Rs/bbl

5828.0

0.4

2.2

10.0

25.7
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (July 13) Unit $/mmbtu Rs/ mmbtu Last 3.598 213.7

(% change)

as on 1 July, 2013

Prev. day 0.9 -0.7

WoW -3.90 -4.68

MoM -9.67 -6.15

YoY 54.42 63.01

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Tuesday| July 2, 2013

International Commodities
Base Metals
The base metals pack traded on a positive note in yesterdays trading session on the back of favourable economic data from the US and Euro Zone. Further, weakness in the DX along with optimistic global markets supported an upside in the prices. However, sharp upside in prices was capped as a result of mixed LME inventories scenario. In the Indian markets, depreciation in the Rupee acted as a positive factor for prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) MCX Aluminum (July13) LME Nickel (3 month) MCX Nickel (July13) LME Lead (3 month) MCX Lead (July13) LME Zinc (3 month) MCX Zinc (July13)
Source: Reuters

as on 1 July, 2013 WoW 3.8 MoM -11.3 YoY -8.8

Last 6963.0

Prev. day 2.9

$/tonne

Rs/kg

417.2

3.9

4.1

0.6

-2.2

$/tonne

1824.0

2.8

3.1

-3.9

-4.5

Rs /kg

107.2

3.9

3.3

1.5

1.7

Copper
Copper prices gained around 3 percent in yesterdays trade on the back of favourable manufacturing data from US and Euro Zone. Additionally, decline in LME copper inventories by 0.5 percent which stood at 662,275 tonnes supported an upside in the prices. Apart from that, positive global market sentiments along with weakness in the DX acted as a positive factor. The red metal touched an intra-day high of $6979/tonne and closed at $6963/tonne in yesterdays trading session. On the domestic front, prices rose around 4 percent as a result of depreciation in the Rupee and closed at Rs. 417.20/kg, after touching an intra-day high of Rs.419.50/kg on Monday. Outlook Manufacturing data from major global economies has come on a mixed note, especially with activity in main consuming countries like China showing a decline. We feel that the base metal prices in todays trade will take main direction from the positive sentiments in the markets. This is because the increase in metal prices is largely related to the relief rally that began on Friday and continued at the start of the week. Chinas HSBC manufacturing PMI showed a decline for the month of June13, thereby indicating that it is not the global manufacturing data, but the general market sentiments that have eased after a bout of risk aversion seen last week. The Dollar Index is expected to weaken and this factor will additionally aid upside in prices today. In the Indian markets, appreciation in the Rupee will cap sharp gains in prices on the MCX. Technical Outlook
Unit MCX Copper Aug13 MCX Zinc July 13 MCX Lead July 13 MCX Aluminum July13 MCX Nickel July 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for July 2, 2013 Support 415/412 110.0/109.0 123/122 106.50/105.80 827/821 Resistance 420/424 111.80/112.50 125/126 108.20/109.0 840/848

$/tonne

13980.0

1.8

2.3

-5.5

-16.4

Rs /kg

831.3

1.7

1.8

-0.1

-11.1

$/tonne

2089.0

1.7

4.2

-3.5

11.4

Rs /kg

123.9

0.9

3.5

0.7

18.7

$/tonne

1882.8

1.5

3.3

-1.3

0.9

Rs /kg

110.9

1.8

3.3

4.5

6.6

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 1 July 662,275 5,450,175 187,716 1,056,075 198,200
st

28 June 665,775 5,435,600 187,488 1,061,475 198,300

th

Actual Change -3,500 14,575 228 -5,400 -100

(%) Change -0.5 0.3 0.1 -0.5 -0.1

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Tuesday| July 2, 2013

International Commodities
Important Events for Today
Indicator Average Cash Earnings y/y Spanish Unemployment Change Halifax HPI m/m Construction PMI Factory Orders m/m FOMC Member Dudley Speaks Country Japan Euro UK UK US US Time (IST) 7:00am 12:30pm 2th 4
th

Actual 0.0% -

Forecast 0.6% -83.5K 0.4% 51.3 2.1% -

Previous 0.0% -98.3K 0.4% 50.8 1.0% -

Impact Medium Medium Medium High Medium Medium

2:00pm 7:30pm 10:00pm

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