Commodities Daily Report

Wednesday| February 13, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

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. 6104view:

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Commodities Daily Report

Wednesday| February 13, 2013

International Commodities
Overview
Indias industrial production declined by 0.6 percent in December. US Federal Budget Balance was at a surplus of $2.9 billion in January. UKs CPI remained unchanged at 2.7 percent in the last month. Asian markets are trading higher on the back of better earnings from Commonwealth Bank of Australia, rise in Japans Tertiary Industry Activity along with increase in Corporate Goods Price Index. US National Federation of Independent Business (NFIB) Small Business Index rose by 0.9 points to 88.9-mark in January from earlier rise of 88level in December. Federal Budget Balance was at a surplus of $2.9 billion in January as against a deficit of $1.2 billion in December. Indias industrial production declined by 0.6 percent in December as against a previous fall of 0.1 percent a month ago. Manufacturing output declined by 0.7 percent in December from rise of 0.3 percent in prior month. US Dollar Index (DX) declined by 0.3 percent yesterday on account of rise in risk appetite in the global market sentiments which led to decline in demand for the low yielding currency. Apart from that, statement from European Central Bank President Mario Draghi that Spain is on proper bank aid program and showing signs of positivity also exerted downside pressure on the DX. Additionally, US equities also traded on a positive note which also acted as a negative factor for the currency. It touched an intra-day low of 79.99 and closed at 80.16 on Tuesday. The Indian Rupee appreciated around 0.3 percent in yesterdays trading session. The currency appreciated in the last hour of the trading on the back of selling of dollars from the exporters coupled with upbeat domestic market sentiments. However, sharp upside in the currency was capped on account of unexpected decline in countrys industrial production and manufacturing output. Additionally, dollar demand from oil firms and importers also exerted downside pressure on the currency. It touched an intra-day high of 53.37 and closed at 53.78 against dollar on Tuesday. For the month of January 2013, FII inflows totaled at Rs.19,723.60 crores ($3,703.17 million) as on 12th February 2013. Year to date basis, net capital inflows stood at Rs.41,782.60 crores ($7,762.50 million) till 12th February 2013.

Market Highlights (% change)

Last INR/$ (Spot) 53.78 Prev day 0.3

as on 12 February, 2013 w-o-w -1.4 m-o-m 1.2 y-o-y -8.2

$/Euro (Spot)

1.3453

0.4

-0.9

1.4

2.1

Dollar Index NIFTY

80.16

-0.3

0.8

0.4

1.2

5922.5

0.4

-0.6

-0.8

10.1

SENSEX

19561.0

0.5

-0.5

-0.5

10.2

DJIA

14018.7

0.3

0.3

4.1

9.5

S&P

1519.4

0.2

0.5

3.2

13.2

Source: Reuters

The Euro appreciated around 0.4 percent yesterday on the back of European Central Bank President Mario Draghi statement that Spain is on proper bank aid program and showing signs of positive results. Additionally, weakness in the DX also supported an upside in the currency. The Euro touched an intra-day high of 1.3475 and closed at 1.3453 against dollar on Tuesday.

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Commodities Daily Report

Wednesday| February 13, 2013

Bullion Gold

International Commodities

Spot gold prices after trading with a negative bias in the early part of the trade bounced back taking cues from weakness in the DX after Group of Seven rich nations said it is committed to market determined exchange rates and that the fiscal and monetary policies must not be directed at devaluing currencies. Spot gold prices settled 0.1 percent higher on Tuesday. The yellow metal touched an intra-day high of $1,638.82 per ounce and closed at $1,650.4 per ounce on Tuesday. On the MCX, Gold April contract ended 0.2 percent lower. Appreciation in the Indian rupee acted as a bearish factor for the MCX gold prices. Gold prices on the MCX closed at Rs. 30,573/10 gms on Tuesday after touching an intraday low of Rs. 30,516/ 10gms.

Market Highlights - Gold (% change)

Gold Gold (Spot) Unit $/oz Last
1650.4

as on 12 February, 2013 Prev. day

0.1

WoW
-1.3

MoM
-1.4

YoY
-4.0

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13)

Rs/10 gms $/oz

30200.0

-1.8

-0.3

-0.3

8.5

1647.5

-0.3

-1.6

-1.6

-3.7

$/oz

1648.7

0.0

-1.4

-1.7

-4.3

Silver
Taking cues from rise in the Spot gold prices, silver prices also increased and ended 0.3 percent higher in yesterdays session. Strength in the base metals also acted as a supportive factor for the silver prices. Weakness in the DX added to the gains in the silver prices in yesterdays session. In the domestic markets, prices of silver on MCX witnessed a decline and ended 0.2 percent lower owing to appreciation in the Rupee. The white metal touched an intra-day high of $31.12/oz and closed at $ 31.08 per oz on Tuesday. In the Indian markets, MCX silver prices ended 0.2 percent down and closed at Rs. 57,555/kg on Tuesday and touched an intra-day low of Rs. 57,211/ kg.

Rs /10 gms

30573.0

-0.2

-0.9

-1.2

8.1

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg Last
31.1

as on 12 February, 2013 WoW

-2.2

Prev day
0.3

MoM
0.8

YoY
-7.1

58100.0

-1.0

-1.5

-0.2

3.4

$/oz $/ oz

3084.0

-1.0

-3.7

1.1

-8.1

3100.4

0.4

-2.7

0.4

-7.7

Outlook
In the intra-day, we expect gold prices to trade with upward bias on account of positive global market sentiments along with weakness in the DX. Positive comment by the European Central Bank President Mario Draghi that Spain is on proper bank aid program is also expected to support market sentiments and thereby rise in the risk appetite for the yellow metal. Investors might adopt a cautious approach ahead of the G-20 finance ministers meet scheduled on Friday, February 15, 2013. In the domestic markets, appreciation in the rupee might act as a bearish factor for the gold prices. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for February 13, 2013 Support 1648/1644 30520/30450 31.0/30.85 57280/57000 Resistance 1655/1660 30650/30720 31.25/31.40 57750/57900

Rs / kg

57555.0

-0.2

-0.6

-1.9

1.1

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Wednesday| February 13, 2013

Energy Crude Oil

International Commodities
Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (March13) ICE Brent Crude (March13) MCX Crude (Feb 13) Unit $/bbl $/bbl $/bbl Last
97.5 119.1 97.5

Nymex crude oil prices increased around 0.5 percent yesterday taking cues from unexpected decline in US crude oil inventories along with forecast for rise in demand for the crude oil from Organization of Petroleum Exporting Countries and US Energy Department (EIA). Additionally, weakness in the DX also supported an upside in the crude oil prices. Crude prices touched an intra-day high of $97.79/bbl and closed at $97.51/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.4 percent and closed at Rs.5,248/bbl after touching an intra-day high of Rs./bbl on Tuesday. Appreciation in the Indian Rupee capped further gains in the oil prices on the MCX.

as on 12 February, 2013 WoW

0.8 0.9 0.9

Prev. day
0.5 -0.3 0.5

MoM
3.9 4.2 3.9

YoY
-1.2 -0.1 -1.2

$/bbl

118.7

0.4

1.8

6.1

1.2

Rs/bbl

5248.0

0.4

2.0

2.3

#N/A

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories declined unexpectedly by 2.3 million barrels to 369.53 million barrels for the week ending on 8th February 2013. Gasoline inventories fell by 810,000 barrels to 232.73 million barrels and whereas distillate inventories dropped by 1.1 million barrels to 127.71 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to rise by 2.4 million barrels for the week ending on 8th February 2013. Gasoline stocks are expected to fall by 500,000 barrels whereas distillate inventories are expected to drop by 1.75 million barrels for the same period. News: As per the Organization of Petroleum Exporting Countries (OPEC) it will have to provide an average of 29.8 million barrels a day in 2013 which is 100,000 a day more than its previous estimates a month ago. The cartels output in January was at 500,000 barrels a day which was at 30.3 million. EIA short term energy outlook report showed that average crude oil prices will be at $92.81 a barrel this year which is up by 3.7 percent from earlier prediction of $89.54/bbl in January Outlook In todays session, we expect crude oil prices to trade higher as OPEC raises the demand outlook along with the decline in the US crude oil inventories. Weakness in the DX also added to the gains in the crude oil prices. Appreciation in the Indian Rupee will however, cap gains in the in the crude oil prices on the MCX. valid for February 13, 2013 Technical Outlook
Unit NYMEX Crude Oil MCX Crude Feb 13 $/bbl Rs/bbl Support 96.90/96.15 5210/5170 Resistance 98.40/99.20 5290/5330

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Feb 13)

as on 12 February, 2013

Unit $/mmbtu Rs/ mmbtu

Last
3.23 175.9

Prev. day
-1.49 -0.73

WoW
-4.97 -1.68

MoM
-2.92 -3.46

YoY
30.40 42.08
Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Wednesday| February 13, 2013

Base Metals

International Commodities
Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Feb13) LME Nickel (3 month) MCX Nickel (Feb13) LME Lead (3 month) MCX Lead Feb13) LME Zinc (3 month) MCX Zinc (Feb13)
Source: Reuters

The base metals pack bounced back from the earlier losses and ended yesterdays session in the positive terrain. Weakness in the DX along with expectation of rise in the demand from the Chinese buyers after the end of the Lunar New year supported the prices to move upwards. Further, signs of recovery in US as the company earnings and business sentiments in the nation are improving which also added to the gains in the base metals prices. Appreciation in the Indian Rupee however, capped gains in the base metals pack on the MCX.

as on 12 February, 2013 WoW -0.6 MoM 1.1 YoY -2.7

Last 8241.3

Prev. day 0.5

$/tonne

Rs/kg

445.2

0.3

0.6

-0.8

5.0

$/tonne

2116.5

0.7

-0.1

-0.2

-6.0

Copper
Copper prices rose 0.5 percent in yesterdays session. Expectation of rise in the demand from the Chinese buyers after the Lunar New Year holidays supported an upside in the copper prices today. Weakness in the DX further added to the gains in the red metal. Company earnings and business investments in the US are witnessing an improvement which is showcasing that the economy is on the path of recovery and thereby demand for the red metal. However, rise in the copper inventories on the LME marginally by 0.01 percent restricted the gains in the copper prices in yesterdays session. LME Copper inventories increased 0.01 percent yesterday and stood at 399,8850 tonnes on Tuesday as against 399,775 tonnes on th 11 February 2013. Copper prices on LME touched an intra-day high of $8,251.25 per tonne and closed at $8,241.25per tonne on Monday. In the domestic markets MCX copper rose 0.3 percent and closed at Rs. 445.2 per kg on Tuesday tracking the international prices. However, appreciation in the Indian rupee restricted gains in the copper prices on the MCX. Outlook In todays session, we expect base metals to trade higher due to positive global market sentiments along with weakness in the DX. Hopes of probable increase in demand for the base metals from the Chinese buyers after the Lunar New Year holidays ends is also expected to add to the gains. Appreciation in the Indian Rupee however, might cap gains in the base metals prices on the MCX. Technical Outlook
Unit MCX Copper Feb13 MCX Zinc Feb 13 MCX Lead Feb 13 MCX Aluminum Feb13 MCX Nickel Feb 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for February 13, 2013 Support 443/440 117.6/116.8 129.4/128.5 112/111.5 977/968 Resistance 447/449 119/119.8 130.9/131.7 113.2/114 994/1002

Rs /kg

112.6

0.4

1.0

-1.6

1.9

$/tonne

18301.0

0.4

-2.4

4.6

-12.0

Rs /kg

985.0

0.4

-0.9

3.2

-4.5

$/tonne

2419.5

1.3

-1.7

3.0

13.0

Rs /kg

130.0

1.0

-0.2

1.8

22.8

$/tonne

2214.0

1.1

1.6

7.9

5.9

Rs /kg

118.4

0.8

2.8

6.7

14.6

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 12th February 399850 5142450 154122 1188100 287625 11th February 399825 5158925 152400 1193200 288100 Actual Change 25 -16,475 1,722 -5,100 -475 (%) Change 0.01 -0.32 1.13 -0.43 -0.16
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Wednesday| February 13, 2013

International Commodities
Important Events for Today

Indicator Federal Budget Balance Tertiary Industry Activity m/m Bank Holiday Industrial Production m/m BOE Gov King Speaks BOE Inflation Report Core Retail Sales m/m Retail Sales m/m Import Prices m/m Business Inventories m/m Mortgage Delinquencies Crude Oil Inventories FOMC Member Bullard Speaks 10-y Bond Auction

Country US Japan China EU UK UK US US US US US US US US

Time (IST) 12:30 am 5:20 am All Day 3:30 pm 4:00 pm 4:00 pm 7:00 pm 7:00 pm 7:00 pm 8:30 pm 13th-14th 9:00 pm 9:40 pm 11:30 pm

Actual 2.9B 1.4% -

Forecast -4.6B 0.8% 0.3% 0.1% 0.1% 0.8% 0.3% 2.4M -

Previous -0.3B -0.3% -0.3% 0.3% 0.5% -0.1% 0.3% 7.40% 2.6M 1.86|2.8

Impact Medium Medium Medium High High High High Medium Medium Medium Medium Medium Medium

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