Commodities Daily Report

Monday| March 11, 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

Monday| March 11, 2013

International Commodities
Overview
US Non-Farm Employment Change rose to 2,36,000 in February. UKs Consumer Inflation Expectations rose by 3.6 percent in Q1 2013. US Unemployment Rate declined to 7.7 percent in the last month. Chinas Consumer Price Index (CPI) increased to 3.2 percent in Feb. US Non-Farm Employment Change rose by 1,17,000 to 2,36,000 in February as against a rise of 1,19,000 in January. Unemployment Rate declined to 7.7 percent in February from earlier rise of 7.9 percent a month ago. Average Hourly Earnings was at 0.2 percent in last month as compared to rise of 0.1 percent in January. Wholesale Inventories increased by 1.2 percent in January with respect to rise of 0.1 percent in earlier month. Chinas Consumer Price Index (CPI) increased to 3.2 percent in February as against a rise of 2 percent in January. Producer Price Index (PPI) remained unchanged at -1.6 percent in the last month. Fixed Asset Investment rose by 21.2 percent in January from earlier rise of 20.6 percent a month ago. Industrial Production increased at slow pace of 9.9 percent in January with respect to previous rise of 10.3 percent in December. US Dollar Index (DX) appreciated by 0.5 percent in the last week on the back of US Gross Domestic (GDP) which grew at slower pace of 0.1 percent than the forecast data leading to concerns over the global economic growth. However, sharp upside was not witnessed on account of rise in risk appetite in the global market sentiments which led to fall in demand for the low yielding currency. Additionally, favorable economic data from US and Euro Zone also capped sharp gains in the currency The Indian Rupee appreciated by 1 percent in the last week. The currency appreciated on the back of selling of dollars from exporters and some custodian banks. Additionally, upbeat global market sentiments coupled with inflow of dollars from Power Grid's bond issue which raised up to 20 billion rupees ($364.66 million) through sale of bonds also supported an upside in the currency. However, strength in the DX capped sharp gains in the currency. The Indian Rupee touched a weekly high of 54.265 and closed at 54.34 against dollar on Friday. For the month of March 2013, FII inflows totaled at Rs.1,410.90 crores th ($254.37 million) as on 8 March 2013. Year to date basis, net capital th inflows stood at Rs.47,909.0 crores ($8,889.0 million) till 8 March 2013. Japans Economy Watchers Sentiment rose by 3.7 points to 53.2-mark in February as against a rise of 49.5-level in January. Core Machinery Orders declined by 13.1 percent in January as against a rise of 2.8 percent a month ago. M2 Money Stock increased by 2.9 percent in February from earlier rise of 2.7 percent in January.

Market Highlights (% change)

Last INR/$ (Spot) 54.34 Prev day 0.2

as on 8 March, 2013 w-o-w 1.0 m-o-m -1.4 y-o-y -7.9

$/Euro (Spot)

1.3004

-0.8

-0.1

-2.7

-2.0

Dollar Index NIFTY

82.73

0.7

0.5

3.0

4.1

5945.7

1.4

4.0

0.7

11.5

SENSEX

19683.2

1.4

4.0

1.0

7.6

DJIA

14397.1

0.5

2.2

2.9

11.5

S&P

1551.2

0.4

2.2

2.2

13.6

Source: Reuters

The Euro depreciated by 0.1 percent on weekly basis on the back of decline in Europes Sentix investor confidence, decline in Spanish services PMI coupled with strength in DX. Further, Revised Euro GDP data showed that Euro zone growth declines by 0.6 percent, negative German factory orders and Flat German industrial production also added downside pressure. However, optimistic global market sentiments, decline in borrowing cost for Spain and ECB decision to keep its benchmark interest rates unchanged to 0.75 percent cushioned the sharp depreciation in the currency. Additionally, ECB president Draghi comment that region economy will become stable also prevented sharp depreciation. French Gov Budget Balance was at a deficit of 12.8 billion Euros in January as against a previous deficit of 87.2 billion Euros a month ago. UKs Consumer Inflation Expectations rose by 3.6 percent in Q1 of 2013 from earlier rise of 3.5 percent in Q4 of 2012.

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Commodities Daily Report

Monday| March 11, 2013

International Commodities
Bullion Gold
Spot gold prices increased by 0.2 percent in the previous week on the back of expectation among the market participants that major central banks will maintain the stimulus measures to spur growth, which increased the worries over rise in inflation among the investors. However, European central bank and Bank of England gave no hint on further monetary stimulus capped the upside movement in prices. Further optimistic global market sentiments and overall favorable economic datas from US showing improving US economy pressured gold safe heaven appeal. The yellow metal touched a weekly high of $1582.9/oz and closed at $1577.74/oz on Fridays trading session. In the Indian markets, prices declined by 1.3 on the back of appreciation in the Indian rupee and closed at Rs. 29335/10 gms on Friday after touching a low of Rs. 29111/10 gms in the last week. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13) Unit $/oz Rs/10 gms $/oz Last 1577.7 29200.0 Prev. day 0.0 -0.8 as on 8 March, 2013 WoW 0.2 -0.6 MoM -5.3 -4.0 YoY -7.2 -

1581.8

0.1

0.0

-5.2

-6.4

$/oz

1576.6

0.1

0.3

-4.3

-7.2

Rs /10 gms

29335.0

-0.2

-1.3

-4.7

Source: Reuters

Silver
Taking cues from rise in gold prices, spot silver prices climb by 1.4 percent on weekly basis. On the back of optimistic global market sentiments and overall favorable economic datas from US showing improving US economy. Further, ECB president Draghi comments that region economy will become stable supported prices. However, strength in DX and mixed economic data from euro region capped sharp rallies. The white metal prices touched a weekly high of $29.24/oz and closed at $28.96/oz in the last trading session of the week. On the domestic front, prices ended on a positive note by 2.1 percent and closed at Rs. 54854/kg on Friday after touching a weekly high of Rs. 55236/kg. Appreciation in the Indian rupee capped the sharp gains in the prices.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 29.0 54680.0 Prev day 0.3 -1.3

as on 8 March, 2013 WoW 1.4 0.5 MoM -7.7 -7.0 YoY -14.5 -5.7

$/oz $/ oz

2878.0 2890.9

-0.8 0.0

2.7 1.6

-8.7 -6.4

-15.6 -15.4

Rs / kg

54854.0

0.4

2.1

-5.8

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of optimistic global market sentiments coupled with weakness in DX. Further, rise in inflation data from China will also support prices. However, favorable economic datas from US showing improving US economy will pressure gold safe heaven appeal. In the Indian markets, appreciation in the Indian Rupee will cap sharp upside in prices on MCX. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for March 11, 2013 Support 1574/1568 29270/29160 28.75/28.60 54500/54200 Resistance 1584/1590 29460/29560 29.10/29.25 55100/55400
Source: Telequote

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Commodities Daily Report

Monday| March 11, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 1.4 percent in the last week taking cues from rise in risk appetite in the global market sentiments. Additionally, favorable economic data from the US and Euro zone led to expectations of rise in demand for the fuel which also supported an upside in the crude oil prices. However, sharp upside in the prices was capped as a result of strength in the DX coupled with restart of pipeline in North Sea which was shut for five days after leak was discovered. Oil prices touched a weekly high of $92.03/bbl and closed at $91.95/bbl in the last trading session of the week. On the domestic bourses, prices declined by 0.7 percent on account of appreciation in the Indian Rupee and closed at Rs.4,976/bbl on Friday after touching a low of Rs.4,925/bbl in the last week. News Saudi Arabia raised its crude production to 9.15 million barrels a day in the month of February as rise of 100,000 barrels from earlier month as per the official of the Persian Gulf who wished not to be identified as data was highly confidential.
Natural Gas (NG) Nymex NG MCX NG (Mar 13) Unit $/mmbtu Rs/ mmbtu Last 3.627 197.8 Prev. day 1.26 0.82 WoW 4.92 2.91 MoM 11.05 11.88 YoY 58.11 73.51
Source: Reuters

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April 13) ICE Brent Crude (March13) MCX Crude (Mar 13) Unit $/bbl $/bbl $/bbl Last 92.0 110.1 92.0 Prev. day 0.5 -1.4 0.4 WoW 1.4 -1.1 1.4

as on 8 March, 2013 MoM -3.9 -8.4 -3.9 YoY -13.7 -15.2 -13.7

$/bbl

110.9

-0.3

0.4

-6.8

-11.6

Rs/bbl

4976.0

-0.1

-0.7

-3.3

Source: Reuters

Market Highlights - Natural Gas (% change)

as on 8 March, 2013

Natural Gas
On a weekly basis, Nymex natural gas prices gained around 5 percent on the back of more than forecasted decline in the US natural gas inventories. Further, expectations of cool winter weather also acted as a positive factor for the gas prices. However, sharp upside in the prices was capped on account of strength in the DX. Gas prices touched a high of $3.635/mmbtu in the last week and closed at $3.629/mmbtu on Friday. On the domestic front, prices rose by 2.9 percent and closed at Rs.197.80/mmbtu on Friday after touching a high of Rs. 198/mmbtu in the last week. Appreciation in the Indian Rupee restricted sharp gains in the prices. Outlook For the intra-day perspective, we expect crude oil prices to trade on a negative note on the back of increase in crude oil production from Saudi Arabia. Additionally, decline in retail sales data and industrial production data from china will add downside pressure on the oil prices. However, weakness in DX coupled with upbeat in global market sentiments will cushion sharp declines in the prices. Appreciation in the Indian rupee will add downside pressure on prices on MCX platform. Technical Outlook
Unit NYMEX Crude Oil MCX Crude March 13 $/bbl Rs/bbl valid for March 11, 2013 Support 90.50/89.90 4960/4930 Resistance 91.60/92.10 5020/5050

Technical Chart NYMEX Crude Oil

SSource: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Monday| March 11, 2013

International Commodities
Base Metals
The base metals pack traded on a mixed note on the back of optimistic global market sentiments and favourable economic datas from US and Euro region. Further, positive comments from ECB president Draghi supported upside in prices. However, strength in DX coupled with rise in LME inventories added downside pressure. Additionally, decline in nonmanufacturing PMI from China acted as a negative factor for prices. In the Indian markets, appreciation in the Indian Rupee added downside pressure on prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (Mar13) LME Nickel (3 month) MCX Nickel (Mar13) LME Lead (3 month) MCX Lead (Mar13) LME Zinc (3 month) MCX Zinc (Mar13)
Source: Reuters

as on 8 March, 2013 WoW 0.4 MoM -1.2 YoY -7.0

Last 7749.0

Prev. day 0.0

$/tonne

Rs/kg

425.2

-0.5

-1.2

-4.8

$/tonne

1963.0

-1.0

-0.6

-7.7

-11.3

Copper
Copper, the leader of the base metal pack increased by 0.4 percent in the last week on the back of optimistic global market sentiments and favourable economic data from US and Euro region. However, rise in LME copper inventories by 11 percent which stood at 509,425 tonnes coupled with strength in DX capped he sharp gains in the prices. The red metal touched a weekly high of $7790/tonne and closed at $7749/tonne in the last trading session of the week. On the domestic front, prices declined by 1.2 percent on the back of appreciation in the Indian Rupee and closed at Rs. 425.2/kg on Friday after touching a low of Rs. 424/kg in the last week. Copper Inventories LME copper inventories gained by whopping 11 percent in the last th week and stood at 509,425 tonnes as on 8 March, 2013 as against st 458,775 tonnes as on 1 March, 2013. Copper inventories in the warehouse monitored by the Shanghai fell by 0.3 percent and stood at 225,416 tonnes for the week th ending on 8 March, 2013. Outlook In the intra-day, we expect base metals prices to trade on the positive note on account of favourable economic datas from US in the previous week coupled with weakness in DX. However, decline in retail sales data and industrial production data from china may cap the sharp gains in prices. Appreciation in the Indian Rupee will cap sharp rallies in prices on the MCX. Technical Outlook
Unit MCX Copper April13 MCX Zinc Mar 13 MCX Lead Mar 13 MCX Aluminum Mar13 MCX Nickel Mar 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 11, 2013 Support 423/420 106.50/105.80 119.10/118.20 105.20/104.70 903/897 Resistance 427/430 107.90/108.90 121.0/122.0 106.40/107.20 915/921

Rs /kg

105.7

-0.9

-1.9

-6.2

$/tonne

16720.0

0.7

0.5

-8.8

-10.9

Rs /kg

909.8

0.3

-1.2

-7.6

$/tonne

2210.0

0.0

-2.1

-8.8

3.9

Rs /kg

120.1

-0.1

-3.4

-7.8

$/tonne

1979.8

-0.5

-2.4

-10.6

-3.4

Rs /kg

107.0

-0.8

-4.0

-9.2

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 8th March 509,425 5,188,900 160,938 1,195,550 285,050 7th March 481,225 5,197,450 160,962 1,198,025 286,150 Actual Change 28,200 -8,550 -24 -2,475 -1,100 (%) Change 5.9 -0.2 0.0 -0.2 -0.4
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Monday| March 11, 2013

International Commodities
Important Events for Today
Indicator Core Machinery Orders m/m French Industrial Production m/m Country Japan Europe Time (IST) 5:20am 1:15pm Actual -13.1% Forecast -1.6% Previous 2.8% -0.1% Impact Medium Medium

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