Commodities Daily Report

Wednesday| September 26, 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

Wednesday| September 26, 2012

International Commodities
Overview
US Consumer Confidence rose to 70.3-mark in current month. BBA Mortgage Approvals increased by 1,700 to 30,500 in August. LME Copper inventories increased by 0.2 % in yesterdays trade. GfK German Consumer Climate was at 5.9-mark in September. st US crude oil inventories rose by 0.3 mn bbl for w/e 21 Sept API.

Market Highlights (% change)

Last INR/$ (Spot)
53.36

as on 25 September, 2012

Prev day
0.1

w-o-w
1.0

m-o-m
4.1

y-o-y
-7.3

Asian markets are trading lower today on the back of expectations that stimulus measures taken by central banks of the major economies will not be sufficient enough to boost the global economic growth. US Standard & Poor's (S&P) / Case-Shiller (CS) Composite-20 House Price Index (HPI) increased to 1.2 percent in July as against a previous rise of 0.6 percent a month ago. Richmond Manufacturing Index was at 4-mark in September as compared to earlier decline of -9-level in last month. The Conference Board (CB) Consumer Confidence increased by 9 points to 70.3-mark in current month from previous rise of 61.3-level in August. House Price Index (HPI) rose at slow pace of 0.2 percent in July with respect to rise of 0.7 percent in prior month. The US Dollar Index (DX) traded on a flat note in yesterdays trading session. The currency appreciated marginally on the back of rise in risk aversion in the global markets which led to increase in demand for the low yielding currency. Additionally, US equities also ended on a weaker note which also supported upside in the currency. However, further positive movement in the currency was not witnessed on account of rise in US consumer confidence and other favorable economic data from the country. The currency touched an intra-day high of 79.76 in yesterdays trade and closed at 79.61 on Tuesday. The Indian Rupee swung between gains and losses in the yesterdays trading session. The currency appreciated by 0.1 percent yesterday taking cues from upbeat domestic market sentiments in the early part of the trade. However, sharp upside in the currency was capped as a result of month end dollar demand from importers along with stronger DX in the initial part of the trade. It touched an intra-day high of 53.245 in yesterdays trade and closed at 53.36 on Tuesday. For the current month FII inflows totalled at Rs. 13,269.40 crores till 25 September 2012. While year to date basis, net capital inflows stood at Rs. th 76,339.0 crores till 25 September 2012.
th

$/Euro (Spot)

1.2898

-0.2

-1.1

2.7

-4.7

Dollar Index

79.61

0.0

0.3

-2.2

0.7

NIFTY

5673.9

0.1

1.3

6.4

17.3

SENSEX

18694.4

0.1

1.1

6.0

16.5

DJIA

13457.6

-0.7

-0.8

2.7

21.9

S&P

1441.6

-1.1

-1.2

2.2

26.8

Source: Reuters

Euro declined 0.2 percent taking cues from the lingering sovereign debt crisis and concerns over Spanish bailout. Spains unwillingness to ask officially for the bailout is weighing on the investor confidence. The currency touched a low of 1.2885 and closed at 1.2898 on Tuesday. GfK German Consumer Climate remained unchanged at 5.9mark in the month of September. UKs British Bankers' Association (BBA) Mortgage Approvals increased by 1,700 to 30,500 in August from previous rise of 28,800 in July.

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Commodities Daily Report

Wednesday| September 26, 2012

International Commodities
Bullion Gold
Spot gold prices declined 0.2 percent due to doubts that whether stimulus measures offered by the global central bankers few weeks back might be enough to revive the global economy. This created risk aversion amongst market participants causing strength in the DX. Strength in the DX thereby pressurized spot gold prices. The yellow metal touched a low of $1,757.80 and closed at $1,760.04 on Tuesday. In the domestic market, MCX gold prices declined 0.1 percent taking cues from the spot gold prices along with appreciation in the Indian rupee. The MCX gold prices settled at Rs. 31,400 per 10 gms after touching a low of Rs. 31,360 per 10 gms in yesterdays session. 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
1760.0

as on 25 September, 2012 Prev day

-0.2

WoW
-0.6

MoM
5.6

YoY
8.2

31500.0

0.6

-0.8

2.0

20.0

1771.5

0.5

0.1

6.2

10.9

$/oz Rs /10 gms

1763.8

0.1

-0.3

5.8

10.8

31400.0

-0.1

-1.7

1.5

22.2

Source: Reuters

Silver
Spot Silver prices declined 0.7 percent taking cues from bearishness in the spot gold prices along with strength in the DX. However, sharp downside in the silver prices was cushioned on the back of strength in the base metals pack. The white metal prices settled at $33.7 per ounce after touching a low of $33.63 per ounce on Tuesday. In the domestic markets MCX silver prices declined 0.2 percent and settled at Rs. 62,314 per kg after touching a low of Rs.62,112 per kg in yesterday session. Appreciation in the Indian rupee also exerted downside pressure on 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
33.7 61840.0 3403.0

as on 25 September, 2012 WoW

-3.1 -1.3 -0.1

Prev day
-0.7 0.6 0.9

MoM
9.3 5.3 10.5

YoY
9.9 19.2 20.8

3388.6

-0.1

-2.2

9.8

13.2

62314.0

-0.2

-3.3

8.2

20.8

Source: Reuters

Outlook
In todays session, we expect precious metals to trade on a bearish note on the back weak global market sentiments along with strength in the DX. However depreciation in the Indian rupee will cushion sharp fall in the prices 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 26, 2012 Support 1760/1754 31330/31230 33.85/33.60 61900/61500 Resistance 1769/1775 31490/31590 34.25/34.50

Technical Chart Spot Gold

Source: Telequote

62600/62990

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Commodities Daily Report

Wednesday| September 26, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.6 percent yesterday taking cues from rise in US crude oil inventories along with strength in the DX. Additionally, expectations that stimulus measures taken by central banks of the major economies will not be sufficient enough to boost the global economic growth added downside pressure on the prices. Crude oil prices touched an intra-day low of $90.57/bbl and closed at $91.40/bbl in yesterdays trading session. On the domestic bourses, prices declined around 0.1 percent and closed at Rs.4,895/bbl after touching an intra-day low of Rs.4,884/bbl on Tuesday. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories increased by 335,000 barrels to 361.785 million barrels for the week ending on 21st September 2012. Gasoline inventories gained around 112,000 barrels to 197.928 million barrels and whereas distillate inventories dropped by 483,000 million barrels to 127.306 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to rise by 0.9 million barrels for the week ending on 21st September 2012. Gasoline stocks are expected to increase by 0.2 million barrels whereas distillate inventories are expected to gain by 0.8 million barrels for the same period. Outlook In todays session, we expect crude oil prices to trade lower on the back of expectations of rise in US crude oil inventories along with strength in the DX. On the domestic front, depreciation in the Indian Rupee will cushion sharp fall in the prices on the MCX. Technical Outlook
Unit valid for September 26, 2012 Support Resistance Natural Gas (NG) Nymex NG MCX NG (Sept12) Unit $/mmbtu Rs/ mmbtu Last
2.95 154.1

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
91.0 110.9

as on 25 September, 2012 WoW

-4.4 -2.2

Prev. day
-0.7 1.4

MoM
-5.5 -2.2

YoY
13.9 0.7

$/bbl

91.4

-0.6

-4.1

-5.1

13.9

$/bbl

110.5

0.6

-1.4

-1.9

6.3

Rs/bbl

4895.0

-0.1

-5.5

-8.7

22.3

Source: Reuters

Market Highlights - Natural Gas (% change)

Prev. day
2.11 0.00

as on 25 September, 2012

WoW
6.04 0.98

MoM
9.14 1.45

YoY
-20.12 -15.84

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

90.60/89.90

91.80/92.50

MCX Crude Oct12

Rs/bbl

4855/4820

4920/4960

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Commodities Daily Report

Wednesday| September 26, 2012

International Commodities
Base Metals
The base metals pack traded higher in yesterdays trading session on account of favourable economic data from the US along with decline in LME inventories apart from Copper. However, sharp upside in the prices was capped as a result of rise in risk aversion in the global markets coupled with strength in the DX. In the Indian markets, appreciation in the Rupee prevented sharp upside in the prices on the MCX. Copper Copper, the leader of the base metals pack increased by 0.9 percent yesterday on the back of more than expected rise in US consumer confidence data. However, weak global market sentiments, stronger DX along with rise in LME Copper inventories by 0.2 percent which stood at 220,300 tonnes added downside pressure on the prices. The red metal touched an intra-day high of $8,295/tonne and closed at $8,255.30/tonne in yesterdays trading session. On the domestic front, prices gained by 0.6 percent and closed at Rs.445.0/kg after touching an intra-day high of Rs.446.30/kg on Tuesday. However, appreciation in the Indian Rupee capped sharp gains in the prices on the MCX. Outlook
Copper

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
112.0

as on 25 September, 2012 WoW

-0.6

Last
8255.3

Prev. day
0.9

MoM
8.5

YoY
13.3

$/tonne

Rs/kg

445.0

0.6

-2.2

4.7

21.6

$/tonne

2100.0

0.8

-2.3

10.1

-5.1

Rs /kg

110.7

0.3

-4.4

5.4

2.2

$/tonne

18400.0

2.2

4.0

13.0

1.0

Rs /kg

977.3

1.8

1.8

8.1

8.5

$/tonne

2313.0

2.3

1.8

17.1

21.6

Rs /kg

122.7

1.9

0.3

12.0

28.6

$/tonne

2129.0

1.6

1.4

14.0

12.9

1.1

-0.4

8.7

21.0

Source: Reuters

LME Inventories
Unit tonnes tonnes tonnes tonnes tonnes 25th September
220,300 5,080,725 122,442 976,125 277,600

24th September
219,950 5,080,950 122,466 977,425 281,250

Actual Change
350 -225 -24 -1,300 -3,650

(%) Change
0.2 0.0 0.0 -0.1 -1.3 Source: Reuters

In todays session, we expect base metals to trade on a bearish note on the back of weak global market sentiments along with strength in the DX. Additionally, expectations that stimulus measures taken by central banks of the major economies will not be sufficient enough to boost the global economic growth will also add pressure on the prices. However, US consumer confidence which came on a positive note in the yesterdays session can cushion sharp fall in the prices. In the Indian markets depreciation in the Rupee will also restrict sharp fall in the prices. 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 26, 2012 Support 443/441 111.30/110.50 122.0/121.40 110.0/109.50 971/964 Resistance 448/451 112.50/113.20 123.30/124.0 111.10/111.90 984/992

Aluminum Nickel Zinc Lead

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Wednesday| September 26, 2012

International Commodities
Important Events for Today

Indicator German Prelim CPI m/m BOE Credit Conditions Survey CBI Realized Sales German 10-y Bond Auction New Home Sales Crude Oil Inventories

Country Euro UK UK Euro US US

Time (IST) All Day 2:00pm 3:30pm Tentative 7:30pm 8:00 pm

Actual -

Forecast 0.0% 6 381K 0.9M

Previous 0.4% -3 1.42/1.1 372K 8.5M

Impact Medium Medium Medium Medium High Medium

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