Commodities Daily Report

Monday| February 18, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6135

Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104view:

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Commodities Daily Report

Monday| February 18, 2013

International Commodities
Overview
US markets closed today on the eve of Presidents Day. US Prelim UoM Consumer Sentiment increased to 76.3-mark in Feb. European Trade Balance was at surplus of 12 billion Euros in Dec. UKs Retail Sales declined by 0.6 percent in the last month. US Empire State Manufacturing Index at 10-mark in current month. Asian markets advance with regional benchmark indices paring earlier losses after observing rise in the Japanese shares. Japanese shares rose as G-20 Finance Ministers signal support to the Japanese stimulus measures as the efforts are meant to spur growth of the economy. US Empire State Manufacturing Index was at 10-mark in February from earlier decline of 7.8-level in last month. Treasury International Capital (TIC) Long-Term Purchases increased by $64.2 billion in December as against a rise of $52.4 billion a month ago. Capacity Utilization Rate was at 79.1 percent in January as compared to rise of 79.3 percent in December. Industrial Production declined by 0.1 percent in January with respect to rise of 0.4 percent in earlier month. Prelim University of Michigan (UoM) Consumer Sentiment increased by 5 points to 76.3-mark in February from previous rise of 71.3-level in January. US Dollar Index (DX) appreciated by 0.3 percent in the last week on account of rise in risk aversion in the global market sentiments which led to increase in demand for the low yielding currency. Apart from that, unfavorable economic data from the Euro region and reemergence of Euro Zone debt crisis also supported an upside in the DX. However, sharp upside in the currency was capped on the back of US retail sales, unemployment claims and consumer sentiments data coming on a positive note. It touched a weekly high of 80.71 and closed at 80.58 on Friday. On a weekly basis, Indian Rupee depreciated around 1.4 percent on the back of countrys trade balance coming on a deficit note. Apart from that, unfavorable industrial production, weak domestic market sentiments, dollar demand from oil companies along with strength in the DX also exerted downside pressure on the currency. However, sharp downside in the currency was cushioned on account of countrys wholesale price index data coming on a positive note. It touched a weekly low of 54.34 and closed at 54.31 against dollar on Friday. For the month of January 2013, FII inflows totaled at Rs.21,058.50 crores th ($3,951.*02 million) as on 15 February 2013. Year to date basis, net th capital inflows stood at Rs.43,117.50 crores ($8,010.40 million) till 15 February 2013. www.angelcommodities.com

Market Highlights (% change)

Last INR/$ (Spot) 54.31 Prev day -0.6

as on 15 February, 2013 w-o-w -1.4 m-o-m -1.1 y-o-y -9.3

$/Euro (Spot)

1.3362

0.0

0.0

0.3

1.7

Dollar Index NIFTY

80.58

0.0

0.3

0.6

1.4

5887.4

-0.2

-0.3

-2.9

6.6

SENSEX

19468.2

-0.1

-0.1

-2.8

7.2

DJIA

13981.76

0.1

-0.1

2.4

8.4

S&P

1519.8

-0.1

0.1

3.2

13.2

Source: Reuters

The Euro depreciated marginally by 0.1 percent in the last week on the back of regions and major economies Gross Domestic Product (GDP) coming on unfavorable note. Additionally, strength in the DX coupled with weak global market sentiments also acted as a negative factor for the currency. However, sharp downside in the currency was cushioned as a result of Italian Trade Balance was at a surplus of 2.16 billion Euros in December as against a surplus of 2.36 billion Euros a month ago. European Trade Balance was at surplus of 12 billion Euros in December from earlier surplus of 11 billion Euros a month ago. Further, fall in the currency was prevented on the back of optimistic speech from ECB President Mario Draghi that Spain is showing signs of positive results coupled with rise in regions industrial production. The Euro touched a weekly low of 1.3305 and closed at 1.3362 against dollar on Friday.

Commodities Daily Report

Monday| February 18, 2013

Bullion Gold

International Commodities

Spot gold prices declined 3.5 percent week on week on the signs of recovery in the US, the largest economy of the world after observing positive consumer confidence data showcasing the economy is on the path of recovery. This reduced the safe haven buying by the market participants. Apart from this, lower physical buying by the Asian buyers along with investors adopting a cautious approach due to the G-20 meeting which concluded on Saturday also acted as a bearish factor for the gold prices. Strength in the DX also exerted a downside pressure on the gold prices. The yellow metal touched a weekly low of $ 1,598.04 /oz and closed at $ 1,609.06 /ounce on Friday. On the MCX, Gold April contract ended 2.2 percent lower taking cues from weakness in the spot gold. Depreciation in the rupee however, cushioned fall in the gold prices on MCX. Gold prices on the MCX closed at Rs. 30,160 /10 gms on Friday after touching a weekly low of Rs. 30,006/ 10gms.

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 1609.1 30050.0 Prev. day -1.6 -0.7

as on 15 February, 2013 WoW -3.5 -1.2 MoM -4.1 #N/A YoY -6.9 8.0

1612.3

-2.1

-3.4

-4.1

-7.0

$/oz

1608.8

-1.6

-3.4

-4.4

-6.8

Rs /10 gms

30160.0

-1.0

-2.2

-2.3

7.1

Source: Reuters

Silver
Spot silver declined 5.25 percent week on week. Silver prices declined taking cues from fall in the spot gold prices and strength in the DX. Contraction in the growth in the Euro zone region also added to the losses. However, positive data from the US and China cushioned fall in the silver prices. The white metal touched a weekly low of $ 29.65/oz and closed at $ 29.75 per oz on Friday. In the Indian markets, MCX silver prices fell 3.2 percent and closed at Rs. 56,086 /kg on Friday and touched a weekly low of Rs. 55,947 / kg. Fall in the spot silver weighed on the prices of silver on MCX. However, depreciation in the Indian rupee cushioned fall in the silver prices on MCX.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg 29.8 57400.0 Last Prev day -2.0 -1.5

as on 15 February, 2013 WoW -5.2 -2.4 MoM -5.1 -2.7 YoY -10.8 2.3

$/oz $/ oz

3018.0 2983.9

-2.3 -1.7

-4.3 -5.0

-3.2 -5.3

-10.4 -10.6

Rs / kg

56086.0

-1.0

-3.2

-5.7

-0.4
Source: Reuters

Outlook
In todays session, we expect prices to trade with bearish note due to weak global market sentiments along with strength in the DX. However, improved buying at lower levels and hopes of rise in the Asian demand as Chinese market reopens today might cushion fall in the prices. With US markets remaining close due to President Day, trading participation will remain subdued today. In the domestic market depreciation in the Rupee is expected to support an upside in the prices. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for February 18, 2013 Support 1611/1606 30100/30000 30/29.85 55800/55600 Resistance 1619/1623 30250/30330 30.25/30.40 56300/56600

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Monday| February 18, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices traded on a flat note and increased marginally in the last week taking cues from statement from European Council members that the currency is not overvalued, increase in demand forecast from Organization of Petroleum Exporting Countries and US Energy Department (EIA). Additionally, United Nations inspectors unable to reach a deal with Iran created supply concerns which supported crude prices. However, decline in European and major economies in region coupled with strength in the DX capped sharp gains in the prices. Crude oil prices touched a weekly high of $98.11/bbl and closed at $95.86/bbl in the last trading session of the week. On the domestic bourses, prices gained by 1.1 percent on the back of depreciation in the Indian Rupee and closed at Rs.5,199/bbl and touched a weekly high of Rs.5,273/bbl on Friday. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (March13) ICE Brent Crude (March13) MCX Crude (Feb 13) Unit $/bbl $/bbl $/bbl Last 96.0 118.6 95.9 Prev. day -1.4 -1.0 -1.5 WoW 0.3 -1.3 0.1 as on 15 February, 2013 MoM 2.9 5.4 2.8 YoY -5.8 -2.6 -5.8

$/bbl

117.7

-0.3

-1.0

6.7

-1.1

Rs/bbl

5199.0

-1.1

1.1

1.3

#N/A
Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Feb 13) Unit $/mmbtu Rs/ mmbtu Last 3.161 172 Prev. day -0.28 1.00

as on 15 February, 2013

Natural Gas
On a weekly basis, Nymex natural gas prices declined by 3.2 percent on account of less than expected decline in US natural gas inventories coupled with forecast for cooler winter weather. Additionally, strength in the DX also exerted downside pressure on the prices. Gas prices touched a weekly low of $3.125/mmbtu and closed at $3.161/mmbtu in the last week. On the domestic front, prices declined by 2.7 percent and closed at Rs.172/mmbtu on Friday after touching a low of Rs.169.30/mmbtu in the prior week. Outlook In todays session, we expect crude oil prices to trade with negative bias on the back of worries over the growth in the US as the industrial output witnessed a decline. Strength in the DX might also act as a bearish factor for the crude oil prices. Depreciation in the Indian Rupee will however, cushion fall in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Feb 13 $/bbl Rs/bbl valid for February 18, 2013 Support 94.95/94.20 5170/5130 Resistance 96.40/97.15 5250/5290

WoW -3.21 -2.71

MoM -8.19 -8.95

YoY 29.55 43.09

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Monday| February 18, 2013

Base Metals

International Commodities
Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Feb13) LME Nickel (3 month) MCX Nickel (Feb13) LME Lead (3 month) MCX Lead Feb13) LME Zinc (3 month) MCX Zinc (Feb13)
Source: Reuters

Base metal prices traded on a mixed note during the week. The rise in the metal prices was on the back of increase in the US consumer confidence which rose to 76.3 levels in February. Decline in the LME inventories except for copper supported the metal prices to move upwards. However, decline in the US industrial production to 0.1 percent in January from a rise of 0.4 percent in December restricted gains in the metal prices. Euro zone GDP also contracted in the fourth quarter. Strength in the DX also restricted gains. Subdued trading activity on the account of weeklong Lunar New Year holidays in China also kept prices in check. Depreciation in the Indian Rupee supported the MCX metal prices to trade upwards except for zinc mirroring the international prices

as on 15 February, 2013 WoW -0.4 MoM 3.2 YoY -1.7

Last 8240.8

Prev. day 0.0

$/tonne

Rs/kg

448.4

0.6

0.4

1.6

7.9

$/tonne

2163.5

0.5

1.7

5.2

-1.7

Rs /kg

115.8

1.0

2.8

4.2

7.5

Copper
Copper prices swayed between gains and losses and ended 0.43 percent down taking cues from contraction in the growth in Europe, one of the key consuming nations of red metal along with subdued trading activity in China, the major consumer of the industrial metal. Rise in the LME inventories along with strength in the DX also lead to the fall in the copper prices. Decline in the US industrial output also weighed on the prices. However, favourable consumer sentiment in US along with hopes of rise in the demand from China after Lunar New Year holidays cushioned fall in the prices. LME copper inventories gained 0.5 percent week on week and stood at 401,675 tonnes as against 399,775 tonnes on February 08, 2013. Copper prices on LME touched a weekly low of $ 8,166.25 per tonne and closed at $ 8,240.75 per tonne on Friday. In the domestic markets, MCX copper gained 0.4 percent and closed at Rs. 448.35 per kg on Friday. Depreciation in rupee supported an upside in the copper prices on MCX. Outlook In the intra-day we expect base metal prices to trade with bearish tone owing to global growth worries as US industrial production declined along with more than expected contraction in the Euro zone economy. However, as Chinese markets reopen today downside in the prices are likely to be capped on hopes of revival in demand. In the domestic market, depreciation in the rupee is expected to cushion fall in the prices of the base metals on MCX. Technical Outlook
Unit MCX Copper Feb13 MCX Zinc Feb 13 MCX Lead Feb 13 MCX Aluminum Feb13 MCX Nickel Feb 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for February 18, 2013 Support 445/442 117/116.4 131.8/131 115/114.2 987/980 Resistance 450/452 118.4/119.2 133.5/134.3

$/tonne

18321.0

0.3

0.0

4.6

-9.3

Rs /kg

994.8

1.1

1.1

3.9

-0.1

$/tonne

2442.5

1.2

0.8

6.6

17.8

Rs /kg

132.4

1.9

1.7

5.8

30.7

$/tonne

2176.5

-0.5

-1.7

9.0

7.6

Rs /kg

117.4

0.1

-0.3

8.1

17.9

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 15th February 401675 5145150 153480 1193550 287150 14th February 399125 5147800 153720 1188100 287075 Actual Change 2,550 -2,650 -240 5,450 75 (%) Change 0.64 -0.05 -0.16 0.46 0.03
Source: Reuters

Technical Chart LME Copper

Source: Telequote

116.4/117.5 1000/1010

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Commodities Daily Report

Monday| February 18, 2013

International Commodities
Important Events for Today

Indicator Current Account Bank Holiday ECB President Draghi Speaks

Country EU US EU

Time (IST) 2:30 pm All Day 8:00pm

Actual -

Forecast -

Previous 14.8B -

Impact Medium High

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