Commodities Daily Report

Thursday| May 16, 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

Thursday| May 16, 2013

Overview

International Commodities
US Producer Price Index (PPI) declined by 0.7 percent in April. European Flash GDP declined by 0.2 percent for Q1 2013. US Industrial Production declined by 0.5 percent in the last month.

Market Highlights (% change)

Last INR/$ (Spot) 54.78 Prev day 0.0

as on 15 May, 2013 w-o-w -1.3 m-o-m -1.1 y-o-y -1.8

Asian markets are trading on a mixed note on the back of unfavorable economic data from US in yesterdays trade. While on the other hand, Japans grew more than expected which cushioned sharp fall in the markets. US Producer Price Index (PPI) declined by 0.7 percent in April as against a decline of 0.6 percent in March. Core PPI was at 0.1 percent in last month from earlier rise of 0.2 percent in March. Empire State Manufacturing Index was at -1.4-mark in May as compared to rise of 3.1-level in April. Treasury International Capital (TIC) Long-Term Purchases decline to $13.5 billion in March with respect to fall of $13.3 billion a month ago. Capacity Utilization Rate was at 77.8 percent in April when compared to 78.3 percent in March. Industrial Production declined by 0.5 percent in April from rise of 0.3 percent in prior month. National Association of Home Builders (NAHB) Housing Market Index increased by 3 points to 44-mark in May as against a rise of 41-level in earlier month. The US Dollar Index (DX) increased by 0.3 percent in the yesterdays trading session on the back of rise in risk aversion in the global market sentiments in the early part of the trade which led to increase in demand for the low yielding currency. Further, unfavorable economic data from the country also supported an upside in the currency. However, sharp upside in the currency was capped on account of US equities trading on a positive note. The currency touched an intra-day high of 84.22 and closed at 83.96 on Wednesday. The Indian Rupee appreciated marginally by 0.01 percent in yesterdays trading session. The currency appreciated on account of increase in inflows of foreign funds. Additionally, upbeat global and domestic market sentiments supported an upside in the currency. However, sharp upside in the Indian Rupee was capped as a result of dollar demand from importers coupled with strength in the DX. The currency touched an intra-day high of 54.65 and closed at 54.78 against dollar on Wednesday. For the month of May 2013, FII inflows totaled at Rs.9,051.20 crores th ($1,671.42 million) as on 15 May 2013. Year to date basis, net capital th inflows stood at Rs.70,087.60 crores ($12,981.80 million) till 15 May 2013. Japans Consumer Confidence fell by 0.3 points to 44.5-mark in April as against a rise of 44.8-level in March. Prelim GDP grew by 0.9 percent in the last quarter ending on March 2013. Prelim GDP Price Index declined by 1.2 percent in Q1 of 2013 from earlier fall of 0.7 percent in Q4 of 2012.

$/Euro (Spot)

1.2886

-0.2

-2.0

-1.1

1.2

Dollar Index NIFTY

83.96

0.3

2.5

1.4

5.7

6146.8

2.5

1.3

8.1

25.2

SENSEX

20213.0

2.5

1.1

7.9

10.5

DJIA

15275.7

0.4

1.1

5.1

20.9

S&P

1658.8

0.5

1.6

6.9

24.7

Source: Reuters

The Euro depreciated by 0.2 percent in yesterdays trade on the back of strength in DX coupled with weak economic data from euro zone. However, sharp depreciation in the currency was cushioned on the back of optimistic global market sentiments. French Prelim Gross Domestic Product (GDP) remained unchanged and declined by 0.2 percent in Q1 of 2013. German Prelim GDP increased by 0.1 percent in Q1 of 2013 as against a decline of 0.7 percent in Q4 of 2012. French Consumer Price Index (CPI) declined by 0.1 percent in April from rise of 0.8 percent in March. Italian Prelim GDP declined by 0.5 percent in first quarter of current year as compared to fall of 0.9 percent in last quarter of 2012. European Flash GDP declined by 0.2 percent for the quarter ending on March 2013 with respect to earlier drop of 0.6 percent in Q4 of 2012. The Euro touched an intra-day low of 1.2842 and closed at 1.2886 against dollar on Wednesday. UKs Claimant Count Change declined by 7,300 in April as against a fall of 7,000 in March. Average Earnings Index increased by 0.4 percent in March from earlier rise of 0.8 percent a month ago. Unemployment Rate dropped to 7.8 percent in March as compared to rise of 7.9 percent in prior month. www.angelcommodities.com

Commodities Daily Report

Thursday| May 16, 2013

International Commodities
Bullion Gold
Spot gold prices declined by 2.3 percent in the yesterdays trading session on the back of strength in DX coupled with weak economic data from Euro zone and US. Further, rise in stock market led to the decline in demand for safe haven. Additionally, SPDR gold trust holding remained unchanged at 33.8 million tonnes on Tuesday but still near to 4 years low acted as a negative factor for the prices. The yellow metal touched an intra-day low of $1389.04/oz and closed at $1392.3/oz in yesterdays trading session. In the Indian markets, prices ended on negative note in the yesterday trading session taking cues from spot gold prices and closed at Rs.26310/10 gms after touching an intra-day low of Rs. 26188/10 gms on Wednesday. Appreciation in the Indian Rupee kept prices under pressure. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13) Unit $/oz Rs/10 gms $/oz Last 1392.3 26400.0 Prev. day -2.3 -1.0 as on 15 May, 2013 WoW -5.4 -2.2 MoM 1.1 3.3 YoY -9.8 -6.1

1410.0

-1.7

-4.0

1.3

-9.4

$/oz

1396.5

-2.0

-4.9

0.3

-10.5

Rs /10 gms

26310.0

-1.5

-2.9

2.5

-6.5

Source: Reuters

Silver
Taking cues from decline in spot gold prices coupled with downside in the base metal packs, Spot silver prices fell by 3.4 percent in the yesterdays trading session. Further, unfavourable economic data from Euro zone and US along with strength in DX added downside pressure on the prices. However, rise in risk appetite in the global market sentiments cushioned sharp downside in the prices. The white metal prices touched an intra-day low of $22.47 /oz and closed at $22.6/oz in yesterdays trade. On the domestic front, prices decreased by 2.7 percent taking cues from spot silver prices and closed at Rs. 43314/kg after touching an intra-day low of Rs. 42950/kg on Wednesday.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 22.6 44740.0 Prev day -3.4 -1.3

as on 15 May, 2013 WoW -5.5 -1.8 MoM -3.0 -1.3 YoY -18.5 -15.9

$/oz $/ oz

2287.0 2264.3

-2.4 0.0

-4.1 -5.2

-1.9 -1.4

-19.1 -16.7

Rs / kg

43314.0

-2.7

-3.5

-0.7

-18.2

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a negative note on the back of strength in DX coupled with weak economic data from US and Euro zone. Further, expectation of decline in Inflation in Major economies of the world may reduce the demand for safe haven. Additionally, SPDR gold trust holding is near to 4 years low, which may keep prices under pressure. However, expectation of rise in US initial jobless claims data may cushion sharp fall in the prices. In the Indian markets depreciation in the Indian rupee may prevent sharp decline in the prices. Technical Outlook
Unit Spot Gold MCX Gold June13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for May 16, 2013 Support 1387/1379 26150/26000 22.50/22.30 42800/42500 Resistance 1402/1411 26450/26620 23.00/23.30 43800/44300

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Thursday| May 16, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices gained around 0.1 percent yesterday taking cues from unexpected decline in US crude oil inventories which led to expectations of rise in demand for the fuel. Further, rise in risk appetite in the global market sentiments also supported an upside in the oil prices. However, sharp upside in the in crude prices was capped on account of unfavorable economic data from US and Euro Zone. Additionally, strength in the DX prevented sharp upside movement in the prices. Crude oil prices touched an intra-day high of $94.44/bbl and closed at $94.30/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.6 percent as a result of appreciation in the Indian Rupee and closed at Rs.5,160/bbl after touching an intra-day low of Rs.5064/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories declined unexpectedly by 0.6 million barrels to 394.90 million barrels for th the week ending on 10 May 2013. Gasoline stocks increased by 2.6 million barrels to 217.70 million barrels and whereas distillate stockpiles rose by 2.3 million barrels to 119.90 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (May13) MCX Crude (May 13) Unit $/bbl $/bbl $/bbl Last 93.9 101.7 94.3 Prev. day 0.4 -1.2 0.1 WoW -2.4 -2.8 -2.4 as on 15 May, 2013 MoM 8.4 3.8 7.5 YoY 0.0 -9.3 0.3

$/bbl

103.7

1.1

-0.6

6.1

-7.6

Rs/bbl

5160.0

-0.6

-0.9

9.8

1.5
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (May 13) Unit $/mmbtu Rs/ mmbtu Last 4.071 222.7 Prev. day 1.3 1.6

as on 15 May, 2013

WoW 2.62 3.87

MoM -1.12 -1.85

YoY 61.61 65.33

Source: Reuters

Technical Chart NYMEX Crude Oil

Natural Gas
EIA Inventories Forecast US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to increase by 96 billion cubic feet (bcf) for the week ending on 10th May 2013. Outlook From the intra-day perspective, we expect crude oil prices to trade lower on the back of rise in risk aversion in the global market sentiments. Further, strength in the DX will also exert downside pressure on the crude oil prices. However, sharp downside in the prices will be cushioned on account of unexpected decline in US crude oil inventories. Also expectations of favorable economic data from the US will prevent sharp downside in the prices. In the Indian markets, depreciation in the Rupee will restrict a plunge in the crude oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude May13 $/bbl Rs/bbl valid for May 16, 2013 Support 92.20/91.10 5060/5000 Resistance 94.80/96.00 5200/5270
Source: Telequote Source: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Thursday| May 16, 2013

International Commodities
Base Metals
Market Highlights - Base Metals (% change) The base metals pack traded on a negative note on the back of strength in Dollar index coupled with rise in LME inventories except Aluminium. Further, Euro zone economy contracted by 0.2 percent in the first quarter of 2013 which increased the concern over demand for industrial metal. Additionally, unfavourable economic data from US exerted downside pressure on the prices. In the Indian market appreciation in the Indian rupee added downside pressure on the prices.
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (April13) LME Nickel (3 month) MCX Nickel (April13) LME Lead (3 month) MCX Lead (April13) LME Zinc $/tonne 1831.3 -0.7 -3.5 -2.2 -5.0 Rs /kg 107.9 -0.3 -3.2 -0.8 -0.8 $/tonne 1968.5 -0.4 -4.7 -2.5 -2.0 Rs /kg 816.3 -1.3 -2.0 -2.1 -11.4 $/tonne 14896.0 -1.5 -3.3 -3.3 -12.6 Rs /kg 100.2 -0.8 -2.1 -1.4 -7.3 $/tonne 1845.5 -0.5 -3.3 -2.4 -8.8 Rs/kg 397.4 -0.6 -1.6 4.2 -5.7 $/tonne Last 7199.3 Prev. day -0.6 as on 15 May, 2013 WoW -3.0 MoM -8.2 YoY -7.2

Copper
Copper, the leader of the base metal pack decreased by 0.6 percent on the back of strength in DX coupled with weak economic data from Euro zone. Further, rise in LME inventories by 1.4 percent to 627,525 tonnes exerted downside pressure on the prices. Additionally, unfavourable economic data from US acted as a negative factor for the prices. However, rise in risk appetite in the global market sentiments cushioned sharp downside in the prices. The red metal touched an intra-day low of $7101/tonne and closed at $7199.25/tonne yesterdays trading session. On the domestic front, prices ended on negative note on the back of appreciation in the Indian Rupee and closed at Rs. 397.4/kg on Wednesday after touching an intra-day low of Rs 392.6/kg. Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of strength in DX coupled with the rise in risk aversion in the global market sentiments. Further, weak economic data from Euro zone and US increased the worries over demand for base metal. Additionally, rise in LME inventories may act as a negative factor for the prices. Apart from that, expectation of mixed economic data from US may keep prices pressure. In the Indian markets, depreciation in the Indian Rupee may cushion sharp downside in the prices. Technical Outlook
Unit MCX Copper April13 MCX Zinc April 13 MCX Lead April 13 MCX Aluminum April13 MCX Nickel April 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for May 16, 2013 Support 394/391 98.80/97.80 107/106.3 99.50/98.80 807/798 Resistance 400/404 100.5/101.5 108.5/109.5 101/101.8

(3 month) MCX Zinc (April13)

Source: Reuters

Rs /kg

99.5

-0.7

-2.3

-0.6

-4.4

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 15th May 627,525 5,225,975 179,556 1,120,900 244,525 14th May 618,700 5,230,300 178,434 1,033,375 245,650 Actual Change 8,825 -4,325 1,122 87,525 -1,125 (%) Change 1.4 -0.1 0.6 8.5 -0.5
Source: Reuters

Technical Chart LME Copper

Source: Telequote

825/837

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Commodities Daily Report

Thursday| May 16, 2013

International Commodities
Important Events for Today
Indicator Prelim GDP q/q French Prelim Non-Farm Payrolls q/q CPI y/y Core CPI y/y FOMC Member Rosengren Speaks Building Permits Core CPI m/m Unemployment Claims CPI m/m Housing Starts Philly Fed Manufacturing Index FOMC Member Raskin Speaks Country Japan Europe Europe Europe US US US US US US US US Time (IST) 5:20am 12:15pm 2:30pm 2:30pm 5:15pm 6:00pm 6:00pm 6:00pm 6:00pm 6:00pm 7:30pm 10:00pm Actual 0.9% Forecast 0.7% -0.3% 1.2% 1.0% 0.94M 0.2% 332K -0.3% 0.98M 2.5 Previous 0.0% -0.3% 1.2% 1.5% 0.91M 0.1% 323K -0.2% 1.04M 1.3 Impact Medium Medium Medium Medium Medium High High High Medium Medium High Medium

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