Commodities Daily Report

Friday| March 22, 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

Friday| March 22, 2013

International Commodities
Overview
US Unemployment Claims increased to 336,000 for w/e 15th March. German Flash Manufacturing PMI declined to 48.9-level in March. US Existing Home Sales was at 4.98 million in the last month. UK's Retail Sales increased by 2.1 percent in February. US Unemployment Claims increased by 2,000 to 336,000 for the week th ending on 15 March from earlier rise of 334,000 in prior week. Flash Manufacturing Purchasing Managers' Index (PMI) rose by 0.6 points to 54.9-mark in March as against a rise of 54.3-level in February. House Price Index (HPI) increased by 0.6 percent in January as compared to rise of 0.5 percent a month ago. Existing Home Sales was at 4.98 million in February with respect to rise of 4.94 million in January. Philly Fed Manufacturing Index was at 2-mark in March from earlier decline of 12.5level in last month. Conference Board (CB) Leading Index remained unchanged at 0.5 percent in the month of February. US Dollar Index (DX) depreciated by 0.1 percent in the yesterdays trading session on the back of favorable existing home sales and manufacturing index which led to decline in demand for the low yielding currency. However, sharp downside in the currency was cushioned as a result of rise in US unemployment claims coupled with US equities trading on a negative note. The currency touched an intra-day low of 82.835 and closed at 82.91 on Thursday. The Indian Rupee appreciated by 0.2 percent in yesterdays trading session. The currency appreciated on the back of selling of dollars from exporters and banks. Further, upbeat global market sentiments coupled with weakness in the DX in the early part of the trade supported an upside in the currency. However, weak domestic market sentiments capped sharp gains in the currency. The Indian Rupee touched an intra-day high of 54.185 and closed at 54.44 against dollar on Thursday. For the month of March 2013, FII inflows totaled at Rs.7,135.60 crores st ($1,308.64million) as on 21 March 2013. Year to date basis, net capital inflows stood at Rs.53,633.70 crores ($9,943.20 million) till 21st March 2013. UK's Retail Sales increased by 2.1 percent in February from earlier decline of 0.6 percent in January.

Market Highlights (% change)

Last INR/$ (Spot) 54.44 Prev day -0.2

as on 21 March, 2013 w-o-w -0.5 m-o-m 0.1 y-o-y -7.0

$/Euro (Spot)

1.2897

-0.3

-0.8

-2.2

-2.4

Dollar Index NIFTY

82.91

-0.1

0.3

1.7

4.3

5658.8

-0.6

-4.2

-3.3

8.2

SENSEX

18792.9

-0.5

-4.0

-2.8

2.8

DJIA

14421.5

-0.6

-0.8

3.0

9.9

S&P

1545.8

-0.8

-1.1

2.9

10.2

Source: Reuters

The Euro Depreciated by 0.3 percent in yesterdays trade as ECB said it may cut the emergency fund to Cyprus bank after March 25 if a Cyprus does not come with a plan to ensure bank solvency. Further, unfavorable economic data from Euro region added downside pressure. French Flash Manufacturing Purchasing Managers' Index (PMI) remained unchanged at 43.9-mark in the month of March. German Flash Manufacturing PMI declined by 1.4 points to 48.9-level in March from previous rise of 50.3-mark in February. European Flash Manufacturing PMI declined by 1.3 points to 46.6-level in present month with respect to increase of 47.9-mark in last month. European Flash Services PMI dropped by 0.8 points to 46.5-level in existing month when compared to 47.3-mark in February. The Euro touched an intraday low of 1.2879 and closed at 1.2897 against dollar on Thursday.

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Commodities Daily Report

Friday| March 22, 2013

International Commodities
Bullion Gold
Spot gold prices increased by 0.5 percent in the yesterday trading on the back of worries over Cyprus bailout as ECB said it may cut the emergency fund to Cyprus bank after March 25 if a nation does not come with a plan to ensure bank solvency, driving investors to buy gold as safe haven. Further, expectation of further monetary policy easing from major central banks coupled with weakness in DX supported prices to trade green. The yellow metal touched an intraday high of $1616.36/oz and closed at $1614.1/oz in yesterdays trading session. In the Indian markets, prices ended on positive note in the yesterday trading session and closed at Rs.29827/10 gms after touching an intra-day High of Rs. 29847/10 gms on Thursday. Appreciation in the Indian rupee prevented sharp gains in prices. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1614.1 Prev. day 0.5 as on 21 March, 2013 WoW 1.5 MoM 2.4 YoY -2.2

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

Rs/10 gms $/oz

29650.0

-0.3

1.0

1.6

6.7

1613.8

0.4

1.7

2.3

-2.2

$/oz

1613.8

0.2

1.5

2.6

-2.0

Rs /10 gms

29827.0

0.5

1.5

0.3

7.1

Silver
Taking cues from rise in gold prices, spot silver prices ended on positive note by 1.3 percent on Thursday. Further, positive US Manufacturing PMI data coupled with rise in US existing home sales data supported prices to trade positive. Additionally, favourable Philly Fed manufacturing Index from US along with weakness in DX acted as a positive factor for prices. However, weak global market sentiments along with negative economic data from Europe capped sharp upside movement in prices. Further, rise in unemployment claims from US prevented sharp rally in prices. The white metal prices touched an intra-day high of $29.32 /oz and closed at $29.13/oz in yesterdays trade. On the domestic front, prices ended on a positive note by 1.3 percent and closed at Rs. 55063/kg after touching an intra-day high of Rs. 55100/kg on Thursday. Appreciation in the Indian rupee capped sharp gains in 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 29.1 55000.0 Prev day 1.3 -0.5

Source: Reuters

as on 21 March, 2013 WoW 1.2 0.4 MoM 1.7 0.5 YoY -9.4 -2.4

$/oz $/ oz

2891.0 2917.9

0.0 0.0

0.9 1.3

0.7 0.7

-9.6 -6.8

Rs / kg

55063.0

1.3

1.4

1.8

-3.1

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a positive note back of worries over Cyprus bailout, driving investors to buy gold as safe haven. However, strength in DX may cap sharp upside movement in prices. In the Indian markets, depreciation in the Indian rupee will support prices to trade green. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for March 22, 2013 Support 1609/1604 29750/29660 28.90/28.80 54800/54500 Resistance 1618/1622 29920/30000 29.25/29.40 55300/55600
Source: Telequote

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Commodities Daily Report

Friday| March 22, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.5 percent yesterday taking cues from decline in German and French manufacturing data which led to expectations of decline in demand for the fuel. Additionally, petroleum deliveries decline by 4.1 percent to 18 million barrels a day in February which is at lowest level since 1993 as per the American Petroleum Institute (API) monthly report yesterday that also acted as a negative factor for the oil prices. However, sharp downside in the prices was cushioned on account of positive US manufacturing data coupled with weakness in the DX. Further, fall in the prices was prevented as a result of Organization of Petroleum Exporting Countries (OPEC) will reduce shipments by 0.2 percent to 17.37 million barrels a day for a period of four weeks from earlier crude shipments of 23.72 million barrels a day as per the Oil movements. Crude oil prices touched an intra-day low of $91.84/bbl and closed at $92.45/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.8 percent on the back of appreciation in the Indian Rupee and closed at Rs.5053/bbl after touching an intra-day low of Rs5036./bbl on Thursday. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (April13) MCX Crude (April 13) Unit $/bbl $/bbl $/bbl Last 92.5 107.6 92.5 Prev. day -0.8 -1.1 -0.5 WoW -0.6 -1.5 -0.6 as on 21 March, 2013 MoM -0.4 -6.7 -0.7 YoY -13.5 -13.8 -13.8

$/bbl

107.5

-1.1

-1.8

-5.3

-13.5

Rs/bbl

5053.0

-0.8

0.4

-1.0

-7.2
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Mar 13) Unit $/mmbtu Rs/ mmbtu Last 3.93 214.5

(% change)

as on 21 March, 2013

Prev. day -0.5 -0.3

WoW 2.58 4.28

MoM 21.22 20.17

YoY 67.73 81.01

Source: Reuters

Natural Gas
Nymex natural gas prices declined around 0.5 percent yesterday on the back of less than expected decline in US natural gas inventories coupled with forecast for warmer weather conditions. However, sharp downside in the prices was cushioned on account of weakness in the DX. Gas prices touched an intra-day low of $3.891/mmbtu and closed at $3.93/mmbtu on Thursday. On the domestic front, prices declined by 0.3 percent and closed at Rs.214.5/mmbtu after touching an intra-day low of Rs.211.80/mmbtu in yesterdays trade. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined less than expected by 62 billion cubic feet (bcf) which stood at 1.876 trillion cubic feet for the week ending on 15th March 2012. Outlook From the intra-day perspective, we expect crude oil to trade on positive note on the back of cut in the shipments from the OPEC, positive manufacturing data from US, China and rise in UKs retail sales in yesterdays trading session along with shutdown of pipeline in Libya. However, sharp upside in the prices will be capped on account of weak global market sentiments coupled with strength in the DX. Depreciation in the Rupee will support an upside in the prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude April 13 $/bbl Rs/bbl valid for March 22, 2013 Support 92.0/92.0 5020/4980 Resistance 93.20/93.80 5090/5120

Technical Chart NYMEX Crude Oil

SSource: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Friday| March 22, 2013

International Commodities
Base Metals
The base metals pack traded on a mixed note on the back of rise in Chinas manufacturing PMI, positive US Manufacturing PMI along with rise in US existing home sales data. Further, favourable Philly Fed manufacturing Index from US coupled with weakness in DX supported prices to gain strength. However, in the later part of the trade due to worries over Cyprus bailout and unfavourable economic data from Europe along with weak global markets sentiments prices remained under pressure. On the MCX, appreciation in the Indian Rupee added downside pressure. 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 21 March, 2013 WoW -2.5 MoM -3.0 YoY -9.9

Last 7609.3

Prev. day -0.1

$/tonne

Rs/kg

416.3

-0.2

-2.3

-3.0

-3.4

$/tonne

1927.0

-0.8

-2.4

-7.1

-12.9

Rs /kg

103.4

-0.7

-2.1

-7.4

-6.5

Copper
Copper, the leader of the base metal pack decreased by 0.1 percent in yesterdays trade on the back weak global market sentiments, worries over Cyprus bailout along with unfavourable economic data from Europe. Further, rise in unemployment claims from US added downside pressure. Additionally, sharp rise in LME Copper inventories by 1.2 percent which stood at 557,450 tonnes kept prices under pressure. However, positive US Manufacturing PMI data coupled with rise in US existing home sales data cushioned sharp downfall in prices. Further, favourable Philly Fed manufacturing Index from US along with weakness in DX also prevented sharp decline in prices. The red metal touched an intra-day high of $7566.25/tonne and closed at $7609.3/tonne yesterdays trading session. On the domestic front, prices ended on negative note and closed at Rs. 416.30/kg on Thursday after touching an intra-day low of Rs 414.1/kg. Appreciation in the Indian Rupee added Downside pressure. Outlook In the intra-day, we expect base metals prices to trade on the positive note on the back of positive US Manufacturing PMI along with rise in US existing home sales data in the yesterdays trade. However, worries over Cyprus bailout, strength in DX along with weak global market sentiments cap sharp gains in the prices. In the Indian markets, depreciation in the Indian Rupee may support prices to trade on positive side. Technical Outlook valid for March 22, 2013
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 Support 414/411 103.5/102.8 116.8/116 102.6/102 911/904 Resistance 418/421 105/105.9 118.1/119 104/104.7 925/932

$/tonne

16862.0

0.3

-1.9

0.7

-10.3

Rs /kg

917.8

0.3

-1.6

0.5

-3.7

$/tonne

2173.3

-0.5

-3.4

-6.5

6.7

Rs /kg

117.5

-0.6

-3.2

-7.1

14.2

$/tonne

1938.0

0.2

-2.0

-8.3

-4.6

Rs /kg

104.3

0.4

-1.7

-9.1

2.2

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 21 March 557,450 5,229,825 162,288 1,195,825 269,975
st

20 March 550,825 5,217,425 162,306 1,199,725 271,475

th

Actual Change 6,625 12,400 -18 -3,900 -1,500

(%) Change 1.2 0.2 0.0 -0.3 -0.6

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| March 22, 2013

International Commodities
Important Events for Today
Indicator German Ifo Business Climate Country Europe Time (IST) 2:30pm Actual Forecast 107.8 Previous 107.4 Impact High

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