Commodities Daily Report

Tuesday| September 25, 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 Associate anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104

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Commodities Daily Report

Tuesday| September 25, 2012

International Commodities
Market Highlights (% change)
Last INR/$ (Spot)
53.43

Overview
German Ifo Business Climate declined to 101.4-level in September. Chinas CB Leading Index increased to 1.7 percent in August. Japans CSPI remain unchanged at -0.3 percent in the last month. LME Copper inventories rose by 0.2 percent in yesterdays trade.

as on 24 September, 2012

Prev day
-0.1

w-o-w
0.8

m-o-m
4.1

y-o-y
-7.7

Asian markets are trading on a mixed note taking cues from the gains in the financial shares amidst worries over how the European leaders solving the debt crisis. Chinas Conference Board (CB) Leading Index increased to 1.7 percent in August as against a previous rise of 0.6 percent in July. The US Dollar Index (DX) increased 0.2 percent on the back of rise in the risk aversion amongst market participants triggered by the disagreement between the European policy makers over the timetable of the banking union. This led to increase in the demand for the low yielding currency that is US Dollar Index (DX). US equities also ended on a weak note due to conflict between the European leaders over the timetable of the banking union and concerns to solve the sovereign debt crisis thereof. Further weak data from the China and Germany raised worries that the economy is slowing down. The currency touched a high of 79.83 and closed at 79.58 on Monday.

$/Euro (Spot)

1.293

-0.4

-1.4

3.4

-4.2

Dollar Index

79.58

0.2

0.9

-2.6

0.4

NIFTY

5669.6

-0.4

1.1

6.0

16.5

SENSEX

18673.3

-0.4

0.7

5.6

15.5

DJIA

13558.9

-0.2

0.0

3.3

25.9

S&P

1456.89

-0.2

-0.3

3.2

28.2

Source: Reuters

The Indian Rupee swung between gains and losses in the yesterdays trading session. The currency depreciated marginally by 0.1 percent on the back of strength in the DX coupled with weak domestic market sentiments. Additionally, month end dollar demand from the oil importers also added downside pressure on the currency. However, sharp downside in the currency was cushioned as a result of selling of dollars from exporters and some banks. It touched an intra-day low of 53.54 in yesterdays trade and closed at 53.47 on Monday. For the current month FII inflows totalled at Rs. 11,617.20 crores till 24 September 2012. While year to date basis, net capital inflows stood at Rs. th 74,686.80 crores till 24 September 2012.
th

Euro declined 0.4 percent taking cues from the discord amongst European leaders over the timetable of the banking union and Greece struggling to meet the bailout commitments. Further, strength in the DX along with unfavorable data from the region also exerted downside pressure on the currency. The currency touched a low of 1.2889 and closed at 1.293 on Monday. German Ifo Business Climate declined to 101.4-level in September as against a previous rise of 102.3-mark in August.

Japans Corporate Services Price Index (CSPI) remained unchanged at -0.3 percent in the month of August.

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Commodities Daily Report

Tuesday| September 25, 2012

International Commodities
Bullion Gold
Spot gold prices declined 0.5 percent and settled at $1,763.7 per oz on the back of weak global market sentiments triggered by the discord amongst European leaders over the time table of the banking union and worries over containing the Euro zone debt crisis. Additionally strength in the DX also added pressure on the gold prices. The yellow metal touched low of $1,755.30/oz and closed at $1,765.7/oz on Monday. On the MCX, Gold October contract declined 0.4 percent tracking bearishness in the spot gold prices. Depreciation in the Indian rupee however cushioned sharp fall in the prices. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex Gold (Dec12) MCX Gold (Oct12) Unit $/oz Rs/10 gms $/oz Last
1763.7

as on 24 September, 2012 Prev day

-0.5

WoW
0.2

MoM
6.0

YoY
6.5

31325.0

-0.9

-1.8

1.0

14.3

1762.5

-1.2

-0.4

5.7

4.4

Silver
Spot silver prices declined 1.6 percent taking cues from weak global market sentiments along with bearishness in the gold prices and strength in the DX. Further weakness in the base metals pack also exerted downside pressure on the silver prices. The white metal touched a low of $33.60/oz and closed at $34.94/oz while MCX silver prices fell by 1.5 percent and closed at Rs. 62,412/kg after touching a low of Rs.62,034 per kg on Monday. Depreciation in Indian currency cushioned sharp fall in the Silver prices on MCX.

$/oz Rs /10 gms

1762.1

-0.8

-0.3

5.4

7.6

31433.0

-0.4

-1.2

1.2

20.0

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex Silver (Dec12) MCX Silver (Dec12) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last
33.9 61450.0 3378.0

as on 24 September, 2012 WoW

-0.8 -2.5 -2.2

Prev day
-1.6 -2.5 -2.6

MoM
10.6 4.2 11.2

YoY
9.1 8.2 2.7

Outlook
We expect precious metals to trade on a negative note on the back of mixed global market sentiments along with strength in the DX. Discord amongst European leaders over the timetable of the banking union and thereby worries over containing Euro zone debt are causing bearish market sentiments. In the domestic markets depreciation in the Indian rupee will cushion sharp fall in the prices of precious metals on MCX. Technical Outlook
Unit Spot Gold MCX Gold Oct12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg valid for September 25, 2012 Support 1761/1756 31360/31280 33.96/33.86 62200/62000 Resistance 1770/1776 31530/31620 34.29/34.56 62800/63300

3392.1

-1.9

-1.1

9.3

12.9

62412.0

-1.5

-2.1

7.5

19.2

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Tuesday| September 25, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 1 percent yesterday taking cues from disagreement between the European leaders over the banking union along with decline in German Business climate which led to expectations of fall in demand for the fuel. Additionally, a stronger DX also exerted downside pressure on the crude prices. However, sharp downside in the prices was cushioned as a result of tensions in Middle East which will lead to supply concerns from the region. Crude oil prices touched an intra-day low of $91.06/bbl and closed at $91.90/bbl in yesterdays trading session. On the domestic bourses, prices declined by 1.2 percent and closed at Rs.4,902/bbl after touching an intra-day low of Rs.4891/bbl on Monday. However, depreciation in the Indian Rupee restricted sharp fall in the prices. API Inventories Forecast The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 2.0 million barrels for the week ending on 21st September 2012. Gasoline stocks are expected to rise by 500,000 barrels and distillate inventories are expected to gain by 900,000 barrels for the same week. Outlook In todays session, we expect crude oil prices to trade on a sideways note as expectations of rising US crude oil inventories, strength in the DX along with mixed global market sentiments will add downside pressure on the crude oil prices. While on the other hand, tensions in the Middle East which will lead to supply concerns from the region will push upside in the prices. Technical Outlook
Unit valid for September 25, 2012 Support Resistance

Market Highlights - Crude Oil (% change)

Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Nov12) ICE Brent Crude (Nov12) MCX Crude (Oct12) Unit $/bbl $/bbl Last
91.7 109.4

as on 24 September, 2012 WoW

-5.0 -6.4

Prev. day
-1.1 -1.9

MoM
-4.1 -4.5

YoY
15.1 -1.9

$/bbl

91.9

-1.0

-4.9

-3.7

15.1

$/bbl

109.8

-1.4

-3.5

-2.2

5.6

Rs/bbl

4902.0

-1.2

-7.1

-7.6

23.4

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Sept12) Unit $/mmbtu Rs/ mmbtu Last
2.889 154.1

as on 24 September, 2012

Prev. day
-0.03 1.05

WoW
0.14 -0.84

MoM
6.88 1.45

YoY
-21.77 -15.84

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

91.91/91.15

93.22/93.98

MCX Crude Oct12

Rs/bbl

4880/4840

4950/4990

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Commodities Daily Report

Tuesday| September 25, 2012

International Commodities
Base Metals
The base metals pack traded lower in yesterdays trading session on the back of rise in risk aversion in the global markets along with strength in the DX. Additionally, mixed LME inventories also added downside pressure on the prices. In the Indian markets, depreciation in the Rupee cushioned sharp fall in the prices on the MCX. Copper Copper, the leader of the base metals pack declined by 1.4 percent yesterday on the back of weak global market sentiments along with strength in the DX. Additionally, rise in LME Copper inventories by 0.2 percent which stood at 219,950 tonnes also exerted downside pressure on the prices. The red metal touched an intra-day low of $8,150/tonne and closed at $8,178.30/tonne in yesterdays trading session. On the domestic front, prices declined by 0.9 percent and closed at Rs.442.5/kg after touching an intra-day low of Rs.440.8/kg on Monday. Outlook In todays session, we expect base metals to trade on a bearish note on the back of mixed global market sentiments along with strength in the DX. European leaders disagreement over the banking union and talks amongst them coming to a deadlock and Greece struggling to meet the bailout commitments is creating bearish global market sentiments causing risk aversion amongst market participants. This would pressurise prices on the downside. In the domestic markets however, depreciation in the Indian rupee is expected to cushion sharp downside in the base metals. Technical Outlook
Unit MCX Copper Nov12 MCX Zinc Sept12 MCX Lead Sept12 MCX Aluminum Sept12 MCX Nickel Sept12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for September 25, 2012 Support 440/438 110.0/109.40 119.70/119.0 109.80/109.0 952/945 Resistance 444/447 111.40/112.0 121.0/121.60 111.30/112.20 965/972
Source: Telequote

Market Highlights - Base Metals (% change)

Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Sept12) LME Nickel (3 month) MCX Nickel (Sept12) LME Lead (3 month) MCX Lead (Sept12) LME Zinc (3 month) MCX Zinc (Sept12) Rs /kg
110.8

as on 24 September, 2012 WoW

-1.3

Last
8178.3

Prev. day
-1.4

MoM
6.7

YoY
12.2

$/tonne

Rs/kg

442.5

-0.9

-2.4

3.7

22.1

$/tonne

2084.0

-1.7

-3.4

8.6

-5.5

Rs /kg

110.3

-1.2

-4.5

5.4

3.1

$/tonne

18000.0

-0.7

-0.5

9.2

-1.1

Rs /kg

959.7

-0.2

-1.6

5.1

7.6

$/tonne

2260.0

-1.4

0.4

14.7

17.6

Rs /kg

120.4

-0.7

-0.5

10.4

25.6

$/tonne

2096.0

-1.0

0.5

11.8

9.7

-0.7

-0.5

7.6

18.9

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 24th September
219,950 5,080,950 122,466 977,425 281,250

21st September
219,475 5,085,850 120,852 976,900 283,625

Actual Change
475 -4,900 1,614 525 -2,375

(%) Change
0.2 -0.1 1.3 0.1 -0.8 Source: Reuters

Technical Chart LME Copper

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Commodities Daily Report

Tuesday| September 25, 2012

International Commodities
Important Events for Today

Indicator FOMC Member Williams Speaks GfK German Consumer Climate BBA Mortgage Approvals ECB President Draghi Speaks S&P/CS Composite-20 HPI y/y CB Consumer Confidence

Country US Euro UK Euro US US

Time (IST) 1:00 am 11:30am 2:00pm 6:30pm 6:30pm 7:30 pm

Actual -

Forecast 6.0 28.6K 1.5% 62.9

Previous 5.9 28.4K 0.5% 60.6

Impact Medium Medium Medium High Medium High

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