Commodities Daily Report

Wednesday| November 22, 2012

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Overview:

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Wednesday| November 22, 2012

International Commodities
Overview
US unemployment claims declined to 410000 in the w/e Nov.17 UK public sector net borrowing fell to 6.5B in the month of October US Flash Manufacturing PMI rose to 52.4 levels in November. HSBC Flash Manufacturing PMI increased to 50.4 levels in November. US Revised UoM Consumer Sentiment fell to 82.7 levels in November US Markets will remain closed on the occasion of Thanks giving today.

Market Highlights (% change)

Last INR/$ (Spot)
55.11

as on 21 November, 2012

Prev day
0.0

w-o-w
-0.2

m-o-m
-2.9

y-o-y
-4.8

US unemployment claims declined by 41000 to 410000 claims in the week ended November 17 as compared to 451000 levels in the previous week. US Flash Manufacturing PMI increased to 52.4 levels in the month of November as compared to 51 levels in the last month. US Revised UoM Consumer Sentiment declined to 82.7 levels in the month of November as compared to 84.9 levels in October Asian markets are trading on a firm note taking cues from positive preliminary Chinese manufacturing data indicating that the economy is on the path of recovery. The US Dollar Index (DX) swung between gains and losses and settled 0.1 percent lower in yesterdays session. Worries over deepening Euro zone debt concerns and European leaders unable to arrive at a decision to provide bailout to Greece created bearish market sentiments in the beginning of the session. However, positive data from the US economy erased earlier gains in the index as risk appetite of the market participants rose resulting in decline in the demand for the low yielding currency that is US Dollar Index (DX). US equities settled on a bullish note taking cues from bullish market sentiments along with favorable data from the US economy. Additionally, with reports of cease fire between Israel and Hamas leaders in the Middle East. The index touched a intra-day low of 80.95 and closed at 80.96 on Wednesday. The Indian Rupee swung between gains and losses and settled 0.05 percent in depreciation on the back of dollar demand from the oil refiners. Bearish global market sentiments along with strength in the DX also exerted downside pressure on the currency. However, in the early part of the trade selling of dollars was witnessed which resulted in appreciation in the Indian rupee in yesterdays trade. Expectation that the reforms might be passed in the winter session starting tomorrow also capped sharp depreciation in the Indian Rupee. It touched an intra- day low of 55.37 and closed at 55.2 on Wednesday. For the current month FII inflows totaled at Rs. 5265.5 crores till 21 November 2012. While year to date basis, net capital inflows stood at Rs. st 98960.5 crores till 21 November 2012.
st

$/Euro (Spot)

1.2828

0.1

0.7

-1.8

-5.1

Dollar Index

80.96

-0.1

-0.2

1.5

3.2

NIFTY

5614.8

0.8

#N/A

-1.8

16.7

SENSEX

18460.4

0.7

#N/A

-1.8

14.9

DJIA

12836.9

0.4

2.1

-3.8

11.7

S&P

1391.0

0.2

2.6

-2.9

620.8

Source: Reuters

The Euro swung between gains and losses and settled 0.1 percent higher in yesterdays session. The currency declined in the early part of trade as European leaders failed to agree on further aid to Greece. Thereby strength in the DX also exerted downside pressure on the currency. However, towards the end of the session hopes increased as European Finance Ministers might agree to provide aid to Greece in the next meeting scheduled on November 26, 2012. The currency touched an intra-day high of 1.2832 and closed at 1.2828 on Wednesday.

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Commodities Daily Report

Wednesday| November 22, 2012

International Commodities
Bullion Gold
Spot gold prices swung between gains and losses and finally settled on a flat note in yesterdays session. Gold declined in the early part of the trade taking cues from bearish global market sentiments resulting from deepening Euro zone debt concerns. European leaders failed to arrive at a solution to provide aid to Greece. Thereby strength in the US Dollar Index (DX) exerted a downside pressure on the gold prices. However, in the later part of the day positive data from the US economy increased the risk appetite of the investors and weakened DX thereby erasing earlier losses of the day and settled on a flat note. The yellow metal touched an intra-day low of $1,720.34 per ounce and closed at $ 1,728.5 per ounce on Wednesday. On the MCX, Gold December contract ended 0.2 percent higher due to depreciation in the Indian rupee. Gold prices on the MCX closed at Rs31,813/10 gms after touching a high of Rs. 31,840/ 10gms. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Dec12) MCX Gold (Dec12) Unit $/oz Rs/10 gms $/oz
1725.8 0.2 -0.2 0.0 1.4 31770.0 -0.3 #N/A 3.1 10.5

as on21 November, 2012 Prev day

0.0

Last
1728.5

WoW
0.1

MoM
0.0

YoY
1.8

1724.0

-0.5

-0.1

-0.2

1.5

$/oz Rs /10 gms

31813.0 0.2 0.2 2.4 10.5

Source: Reuters

Silver
Spot silver prices gained 0.5 percent in yesterdays session taking cues from strength in the spot gold prices. However, sharp gains were capped on the back of strength in the DX in the early part of the trade. Weakness in the base metals pack also restricted sharp gains in the silver prices. The white metal touched an intra-day high of $33.39/oz and closed at $33.3/oz on Wednesday. In the Indian markets, MCX silver prices rose 0.8 percent and closed at Rs. 62,047/kg on Wednesday and touched a high of Rs. 62,160 /kg. Depreciation in the Indian rupee acted as a supportive factor for silver prices on MCX.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz
62300.0 -0.2

as on 21 November, 2012 WoW

2.1

Last
33.3

Prev day
0.5

MoM
2.9

YoY
1.8

#N/A

3.4

10.7

Rs/1 kg
33.0 -0.5 1.6 2.6 3.6

$/oz 33.34 $/ oz
62047.0 0.8 1.1 4.1 8.8

1.28

1.44

3.96

7.17

Rs / kg
Source: Reuters

Outlook
In todays session we expect precious metals to trade on a firm note due to positive global market sentiments along with weakness in the DX. Expectations that the US President might be able to resolve the fiscal cliff issue are expected to support an upside in the precious metals. In the domestic markets appreciation in the Indian rupee will restrict sharp gains in the metals prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for November 22, 2012 Support 1728/1722 31750/31650 32.77/32.61 61800/61500 Resistance 1736/1741 31900/32000 33.03/33.25 62300/62700

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Wednesday| November 22, 2012

International Commodities
Energy Crude Oil
Market Highlights - Crude Oil (% change) Nymex crude oil prices swung between gains and losses and ended 0.7 percent higher. Prices witnessed selling pressure in the early part of the trade on reports that cease fire amongst the Israel and Palestinian leaders might erase worries of supply disruption. Strength in the DX also acted as a bearish factor for the crude oil prices. Positive data from the US economy however erased earlier losses and the prices settled on a positive note. Further decline in the crude oil inventories also acted as a supportive factor for the crude oil prices. Crude oil prices touched a intra-day high of $87.89/bbl and closed at $87.3/bbl on Wednesday. On the domestic bourses, prices rose 0.4 percent and closed at Rs.4,823/bbl after touching a high of Rs.4,869/bbl on Wednesday. Depreciation in the Indian rupee also supported an upside in the crude prices on MCX.
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Dec12) ICE Brent Crude (Dec12) MCX Crude (Nov12) Unit $/bbl $/bbl Last
87.1 111.9

as on 21 November, 2012 WoW

0.9 1.0

Prev. day
0.7 0.7

MoM
-1.4 1.4

YoY
-10.9 3.0

$/bbl

87.3

0.7

1.2

-1.6

-10.9

$/bbl

111.0

1.1

1.3

1.5

1.8

Rs/bbl

4823.0

0.4

1.8

0.3

-6.2

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Nov 12)

as on21 November, 2012

EIA Crude oil inventories

Crude inventories declined 1.47 million barrels to 374.5 million barrels according to the latest EIA report. Gasoline inventories fell 1.55 million barrels to 200.4 million. Distillate supplies, fell by 2.68 million to 112.8 million, the lowest level in more than four years.

Unit $/mmbtu Rs/ mmbtu

Last 3.901 214.5

Prev. day 1.64 2.19

WoW 4.05 2.88

MoM 9.00 10.28

YoY 14.23 19.63

Source: Reuters

Natural Gas
Natural gas prices gained 2.19 percent in yesterdays session on the back of more than expected decline in the inventories. Further expectations that the demand might increase in the coming days due to cooler weather also supported an upside in the natural gas prices. Natural gas prices touched a high of $3.910/ mmbtu and closed at $3.901mmbtu on Wednesday. In the domestic markets prices touched a high of Rs. 215.8/mmbtu an closed at Rs.214.5/ mmbtu in yesterdays session. Outlook In the intra-day, we expect crude oil prices to trade on a bearish note as cease fire amongst the Israel and Palestinian leaders might erase worries of supply disruption. However, weakness in the DX along with positive global market sentiments is expected to cushion sharp fall in the crude prices. Decline in the crude oil inventories is also expected to support an upside in the crude oil prices. In the domestic markets appreciation the Indian rupee will exert downside pressure in the crude oil prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Dec 12 $/bbl Rs/bbl valid for November 22, 2012 Support 86.29/85.57 4800/4760 Resistance 87.37/87.90 4860/4890

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

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Commodities Daily Report

Wednesday| November 22, 2012

International Commodities
Base Metals
The base metal pack traded on a negative note owing to bearish global market sentiments along with strength in the DX in the early part of the session. Deepening Euro zone debt concerns also weighed on the prices of the base metals in yesterdays session. However, sharp decline in the prices were cushioned due to decline in LME inventories in most of the base metals except copper. However, favourable data from the US economy erased some of the gains in the later part of the trading session yesterday. In the Indian markets depreciation in the Indian Rupee however cushioned sharp falls in the prices of base metals on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Nov12) Rs /kg
106.2 -1.0 -1.3 1.8 -1.8

as on 21 November, 2012 WoW

1.3

Last
7717.5

Prev. day
-0.5

MoM
-2.9

YoY
4.4

$/tonne

Rs/kg

425.8

-0.5

1.5

-0.7

10.1

$/tonne

1936.5

-1.0

-1.6

-1.5

-7.1

Copper
Copper, the leader of the base metals complex fell 0.5 percent on the back of worries over debt concerns worsening in Euro zone regions and no solution agreed upon providing further aid to Greece. This would reduce the demand for the red metal. Strength in the DX in the early part of the trade also exerted downside pressure on the copper prices. Rise in LME Copper inventories by 0.06 percent also exerted downside pressure on the copper prices. LME Copper stocks stood at 2,53,875 tonnes. The red metal closed at $7,717.5 per tonne after touching an intra-day low of $7,660 per tonne on Wednesday. On the domestic front, prices fell 0.5 percent and closed at Rs.425.8 per kg after touching an intra-day low of Rs.423.2 /kg taking cues from bearishness in the international prices. However, sharp fall in the prices were cushioned due to depreciation in the Indian rupee. Outlook From the intraday perspective, base metal prices are expected to trade on a positive note taking cues from firm global market sentiments along with weakness in the DX. Positive economic data from the US and China economy is also indicating that the economy is on the path of recovery. Appreciation in the Rupee will restrict sharp gains in the base metal prices on the MCX. Technical Outlook
Unit MCX Copper Nov12 MCX Zinc Nov12 MCX Lead Nov12 MCX Aluminum Nov12 MCX Nickel Nov12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for November 22, 2012 Support 422/420 104/103.2 118/117.2 105.7/105 908/900 Resistance 428/431 105.5/106.3 119.6/120.2 106.8/107.5 924/930

LME Nickel (3 month) MCX Nickel (Nov12) LME Lead (3 month) MCX Lead (Nov12) LME Zinc (3 month) MCX Zinc (Nov12)

$/tonne

16652.0

0.7

3.0

0.3

-5.6

Rs /kg

916.8

0.8

3.3

3.2

-0.9

$/tonne

2159.0

-0.5

-0.4

4.1

6.1

Rs /kg

118.9

-0.6

-1.0

7.2

13.0

$/tonne

1929.0

0.2

-0.3

3.5

-1.1

Rs /kg

104.9

-0.2

-0.6

6.9

3.1

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 20th November
253875 5166500 133578 1174250 361625

19th November
253700 5172500 133914 1177075 336425

Actual Change 175 -6,000 -336 -2,825 25,200

(%) Change 0.1 -0.1 -0.3 -0.2 7.5

Source: Reuters

Technical Chart MCX Copper

Source: Telequote

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Commodities Daily Report

Wednesday| November 22, 2012

International Commodities
Important Events for Today

Indicator HSBC Flash Manufacturing PMI French Flash Manufacturing PMI French Flash Services PMI German Flash Manufacturing PMI German Flash Services PMI Flash Manufacturing PMI Flash Services PMI EU Economic Summit Spanish 10-y Bond Auction CBI Industrial Order Expectations Bank Holiday

Country CNY EU EU EU EU EU EU EU EU GBP US

Time (IST) 7:15 am 1:30 pm 1:30pm 2:00pm 2:00pm 2:00pm 2:30pm Day 1 Tentative 4:30pm All Day

Actual 50.4

Forecast

Previous 49.5

Impact High High Medium High Medium Medium Medium High

44.1 45.3 45.9 48.5 45.6 46.1

43.7 44.6 46.0 48.4 45.4 46.0

5.46|1.9 -19 -23

High Medium

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