Commodities Daily Report

Thursday| September 27, 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

Thursday| September 27, 2012

International Commodities
Overview
US New Home Sales declined by 1,000 to 373,000 in August. Italian Retail Sales dropped by 0.2 percent in the month of July. st US crude oil inventories fell by 2.4 mn bbl for w/e 21 Sept EIA. UKs CBI Realized Sales increased to 6-mark in September.

Market Highlights (% change)

Last INR/$ (Spot)
53.57

as on 26 September, 2012

Prev day
-0.4

w-o-w
0.8

m-o-m
3.8

y-o-y
-8.7

Asian markets are trading on firm note anticipating further stimulus measures from the global central bankers particularly China to support growth in the nation. Weak industrial profits in China and South Korea may induce central bankers there to announce stimulus measures. US New Home Sales declined by 1,000 to 373,000 in August as against a rise of 374,000 a month ago. US dollar index (DX), gained 0.4 percent on the back of weak global market sentiments triggered by concerns in Spain and political unrest over further austerity measures there is creating bearish market sentiments. This led to rise in risk aversion amongst market participants and thereby increase in demand for the low yielding currency that is DX. US equities also ended on a weak note taking cues from the concerns of Spain and thereby worry of deepening Euro zone debt crisis. Further, unfavorable data from the nation also exerted downside pressure on the equities. The index touched a high of 80.08 and closed at 79.95 on Wednesday. The Indian Rupee depreciated by 0.4 percent in yesterdays trading session. The currency depreciated taking cues from rise in risk aversion in the global markets along with strength in the DX. Additionally month end dollar demand from the oil importers also added downside pressure on the currency. Also Indian equities ended on weak note which also led to depreciation in the currency. It touched an intraday low of 53.62 in yesterdays trade and closed at 53.57 on Wednesday. For the current month FII inflows totalled at Rs. 17,825.10 crores till 26 September 2012. While year to date basis, net capital inflows stood at Rs. th 80,894.70 crores till 26 September 2012.
th

$/Euro (Spot)

1.2871

-0.2

-1.3

2.7

-5.3

Dollar Index

79.95

0.4

1.0

-2.0

2.5

NIFTY

5663.5

-0.2

1.1

7.1

13.9

SENSEX

18632.2

-0.3

0.7

6.5

12.8

DJIA

13413.5

-0.3

-1.2

2.3

19.9

S&P

1433.32

-0.6

-1.9

1.6

23.3

Source: Reuters

Euro continued to extend losses of the previous day on the back of protests in Spain on the further austerity measures and worries that European leaders are unable to resolve the sovereign debt crisis. Additionally, rise in the German bond yields also acted as a bearish factor for the currency. The currency touched a low of and closed at .

UKs Confederation of British Industry (CBI) Realized Sales increased to 6mark in September from previous decline of 3-level in August. Italian Retail Sales declined by 0.2 percent in July as against a previous rise of 0.4 percent a month ago.

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Commodities Daily Report

Thursday| September 27, 2012

International Commodities
Bullion Gold
Spot gold prices declined 0.5 percent due to worries of the Euro zone debt crisis and thereby weak global market sentiments. This created rise in the risk aversion amongst market participants and thereby increase in the demand for DX. This in turn pressurized spot gold prices. The yellow metal touched a low of $1,737.50 and closed at $1,751.59 on Wednesday. In the domestic market, MCX gold prices declined 0.7 percent taking cues from bearishness in the spot gold prices. The MCX gold prices settled at Rs. 31,310 per 10 gms after touching a low of Rs. 31,205 per 10 gms in yesterdays session. However sharp fall in the gold prices were cushioned on the back of depreciation in Indian rupee. 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
1751.6

as on 26 September, 2012 Prev day

-0.5

WoW
-1.0

MoM
5.8

YoY
6.2

31520.0

0.1

-0.7

2.3

18.7

1744.8

-1.5

-1.2

5.1

5.2

$/oz Rs /10 gms

1750.6

-0.7

-1.0

5.5

6.1

31310.0

-0.3

-2.2

1.5

19.6

Source: Reuters

Silver
Spot Silver prices gained 0.7 percent taking on the back of short coverings by the market participants. However, sharp gains in the spot silver prices were capped on account of strength in the DX, weakness in the spot gold and base metals pack. The white metal prices settled at $33.9 per ounce after touching a high of $34.04 per ounce on Wednesday. In the domestic markets MCX silver prices ended on a flat note and settled at Rs. 62,656 per kg after touching a high of Rs.62,790 per kg in yesterday session. Depreciation in the Indian rupee acted as a supportive factor for the silver prices in the domestic market. 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 61570.0 3390.0

as on 26 September, 2012 WoW

-1.9 -1.7 -2.2

Prev day
0.7 -0.4 -0.3

MoM
10.6 5.1 10.3

YoY
6.6 8.2 1.2

3388.3

0.0

-1.8

9.9

7.6

62656.0

0.5

-2.8

8.9

18.2

Source: Reuters

Outlook
Technical Chart Spot Gold In todays session, we expect precious metals to trade on a firm note on the back mixed global market sentiments along with weakness in the DX. However, appreciation in the Indian rupee will cap sharp gains 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 27, 2012 Support 1748/1742 31220/31120 33.75/33.58 62300/62000 Resistance 1757/1764 31390/31500 34.13/34.33 63000/63380
Source: Telequote

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Commodities Daily Report

Thursday| September 27, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 1.5 percent yesterday taking cues from reports of the US Energy Department (EIA) that demand has declined along with strength in the DX. However, sharp downside in the prices was cushioned on the back of unexpected decline in US crude oil inventories. Crude oil prices touched an intra-day low of $88.95/bbl and closed at $90/bbl in yesterdays trading session. On the domestic bourses, prices declined by 1.5 percent and closed at Rs.4,822/bbl after touching an intra-day low of Rs.4,801/bbl on Wednesday. However, depreciation in the Indian Rupee prevented sharp fall in the prices on the MCX. EIA Inventories Data As per the US Energy Department (EIA) report last night, US crude oil inventories declined unexpectedly by 2.4 million barrels to 365.20 million barrels for the week ending on 21st September 2012. Gasoline stocks fell by 0.5 million barrels to 195.80 million barrels and whereas distillate stockpiles drop by 0.5 million barrels to 127.70 million barrels for the last week. News As per the US Energy Department (EIA), oil production rose to 6.51 million barrels a day in last week, which is at the highest level since January 1997. Gasoline consumption declined by 0.8 percent to 8.82 million barrels a day in the last four weeks ending on 21st September and last week average was at 8.77 million barrels a day from previous 9.18 million barrels a day in the end of the week for August. Outlook
Source: Telequote

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
89.7 109.4

as on 26 September, 2012 WoW

-2.4 0.7

Prev. day
-1.5 -1.3

MoM
-6.1 -3.4

YoY
6.7 -2.2

$/bbl

90.0

-1.5

-2.2

-5.8

6.5

$/bbl

110.0

-0.4

1.7

-2.2

2.7

Rs/bbl

4822.0

-1.5

-2.9

-9.3

17.2

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Oct12) Unit $/mmbtu Rs/ mmbtu Last
3.023 172.1

as on 26 September, 2012

Prev. day
2.47 11.68

WoW
7.96 13.67

MoM
11.84 13.30

YoY
-20.20 -8.51

Source: Reuters

Technical Chart Nymex Crude Oil

In todays session, we expect crude oil prices to trade lower on the back of sufficient supplies of the same, weak demand and lingering Euro zone debt concerns. However, weakness in the DX might cushion sharp fall in the crude oil prices. On the domestic front, appreciation in the Indian Rupee will support for the downside in the MCX crude prices. Technical Outlook
Unit valid for September 27, 2012 Support Resistance

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

89.38/88.64

91.07/92.0

MCX Crude Oct12

Rs/bbl

4780/4740

4870/4920

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Commodities Daily Report

Thursday| September 27, 2012

International Commodities
Base Metals
The base metals pack traded lower in yesterdays trading session on account 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. Also unfavourable economic data from the US led to fall in 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 complex declined by 1.4 percent yesterday on the back of weak global market sentiments along with strength in the DX. Additionally, rise in the LME Copper inventories by 0.1 percent which stood at 220,525 tonnes also exerted downside pressure on the prices. The red metal touched an intra-day low of $8,082/tonne and closed at $8,143.30/tonne in yesterdays trading session. On the domestic front, prices fell by 0.7 percent and closed at Rs.442.0/kg after touching an intra-day low of Rs.439.8/kg on Wednesday. However, depreciation in the Rupee prevented sharp fall in the prices on the MCX. Outlook In todays session, we expect base metals to trade on a firm note on account of mixed global market sentiments along with weakness in the DX. Additionally, anticipating further stimulus measures from the Chinese government might support an upside in the base metals pack. In the Indian markets appreciation in the Rupee will cap sharp gains in the base metal prices on MCX. 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 27, 2012 Support 440/437 109.50/108.70 120.50/119.80 109.10/108.50 957/950 Resistance 444/448 110.80/111.50 122.0/122.60 110.50/111.20 970/977

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
110.1

as on 26 September, 2012 WoW

-2.5

Last
8143.3

Prev. day
-1.4

MoM
7.5

YoY
6.9

$/tonne

Rs/kg

442.0

-0.7

-3.5

4.6

17.6

$/tonne

2080.0

-1.0

-2.7

10.0

-7.6

Rs /kg

109.8

-0.8

-4.6

5.4

1.2

$/tonne

18048.0

-1.9

1.6

10.7

-5.2

Rs /kg

964.9

-1.3

0.1

6.7

3.9

$/tonne

2270.0

-1.9

0.2

15.6

11.9

Rs /kg

121.3

-1.1

-1.0

11.0

20.8

$/tonne

2083.5

-2.1

-1.9

12.4

5.0

-1.7

-3.3

7.8

14.8

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 26th September
220,525 5,071,800 122,442 974,475 274,175

25th September
220,300 5,080,725 122,442 976,125 277,600

Actual Change
225 -8,925 0 -1,650 -3,425

(%) Change
0.1 -0.2 0.0 -0.2 -1.2 Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Thursday| September 27, 2012

International Commodities
Important Events for Today

Indicator Nationwide HPI m/m German Unemployment Change M3 Money Supply y/y Current Account Final GDP q/q Italian 10-y Bond Auction Core Durable Goods Orders m/m Unemployment Claims Durable Goods Orders m/m Final GDP q/q Pending Home Sales m/m

Country UK Euro Euro UK UK Euro US US US US US

Time (IST) 27 31
th st

Actual -

Forecast 0.2% 10K 3.3% -12.2B -0.5% 0.2% 378K -4.3% 1.7% -0.7%

Previous 1.3% 9K 3.8% -11.2B -0.5% 5.82/1.4 -0.6% 382K 4.1% 1.7% 2.4%

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

1:25pm 1:30pm 2:00pm 2:00pm Tentative 6:00pm 6:00pm 6:00pm 6:00pm 7:30 pm

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