Commodities Daily Report

Tuesday| January 22, 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:

D Vijiya Rao - Research Analyst vijiya.d@angelbroking.com (022) 2921 2000 Extn. 6134view

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Commodities Daily Report

Tuesday| January 22, 2013

International Commodities
Overview
The Euro group has appointed new President Jeroen Dijsselbloem. Bank of Japan expected to declare stimulus measures today. German PPI declined by 0.3 percent in December. Asian markets are trading on a mixed note today ahead of the outcome of Bank of Japan meeting. The Japanese Prime Minister Shinzo Abe is expected to expand monetary stimulus to help revive the economic growth. US Dollar Index (DX) traded on a flat note in yesterdays trading session as a result of US markets being closed on account of Martin Luther King Day. Additionally, in the later part of the trade European Finance Ministers had met to discuss the situation of regions debt crisis and expectations of solving them were very high which added downside pressure on the currency. The Euro group has appointed Dutch Finance Minister Mr. Jeroen Dijsselbloem as its new President for the tenure of two and half years which led to rise in investors expectations for solution towards its debt situation. The currency touched an intra-day low of 80.0 and closed at 80.12 on Monday. The Indian Rupee traded on a flat note and depreciated marginally by 0.1 percent in yesterdays trading session. The currency had appreciated in the early part of the trade as a result of rising expectations that policymakers will make efforts to spur economic growth and improve public finances. Moodys rating also maintained a stable outlook for the country which also supported an upside in the currency. However, in the later part of the trade currency depreciated on the back of dollar demand for oil importers along with strength in the DX. The currency touched an intra-day low of 53.955 and closed at 53.755 on Monday.

Market Highlights (% change)

Last INR/$ (Spot) 53.77 Prev day -0.1

as on 21 January, 2013 w-o-w 1.4 m-o-m 2.1 y-o-y -6.6

$/Euro (Spot)

1.3312

0.0

-0.5

1.0

2.9

Dollar Index NIFTY

80.12

0.0

0.7

0.5

-0.4

6082.3

0.3

1.0

3.9

20.5

SENSEX

20101.8

0.3

1.0

4.4

20.1

DJIA

13649.7

0.4

1.1

3.9

7.3

S&P

1485.98

0.34

1.04

3.90

12.97

Source: Reuters

Euro traded on a flat note in yesterdays trading session on the back of appointment of new President Mr. Jeroen Dijsselbloem which rose investors expectations of solving the regions debt crisis. Additionally, weakness in the DX also supported an upside in the currency. It touched an intra-day high of 1.332 and closed at 1.3312 on Monday. German Producer Price Index (PPI) declined by 0.3 percent in December as against a previous decline of 0.1 percent in November.

For the current month 2013 FII inflows totaled at Rs 14,594.20 crores till 21st January 2013. While year to date basis, net capital inflows stood at Rs.14, 594 crores as on 21st January 2013..

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Commodities Daily Report

Tuesday| January 22, 2013

Bullion Gold

International Commodities
Market Highlights - Gold (% change)
as on 21 January, 2013 Prev day 0.4 -0.1 -0.1 WoW 1.4 #N/A 1.3 MoM 1.4 -0.9 1.4 YoY 2.0 10.8 2.0

Trading activity in the spot gold remained subdued on the observance of the Martin Luther Day. In the domestic markets, gold prices traded on a firm note as the government raised the import duty on gold to 6 percent from 4 percent in order to curtail the widening current account deficit. Rise in the import duty causes the landed cost of the metal in the domestic to rise thereby increasing the prices. The finance ministry officials also said that the duties would be reviewed if there are changed in the gold imports. The yellow metal touched an intra-day high of $1,691.1/oz and closed at $1,686.6/oz in yesterdays trading session. On the MCX, Gold February contract gained by 0.5 percent on the back of increase in the Indian Rupee and mild depreciation in the Indian rupee in the later part of the day and closed at Rs.30,757/10 gms after touching an intra-day high of Rs. 30,847/10 gms on Monday.

Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Feb13) MCX Gold (Feb13)

Unit $/oz Rs/10 gms $/oz

Last 1689.6 30325.0 1687.5

#N/A $/oz Rs /10 gms 30757.0

#N/A

#N/A

#N/A

#N/A

0.5

-0.3

-0.2

12.5

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz 59370.0 Rs/1 kg $/oz $/ oz Rs / kg 59432.0 0.0 3190.0 #N/A 0.3 #N/A 0.2 Last 32.0 Prev day 0.5

as on 21 January, 2013 WoW 3.2 1.7 MoM 3.2 -1.4 YoY 4.6 11.2

Silver
Taking cues from strength in the gold prices spot silver prices also ended 0.5 percent higher. Weakness in the base metals pack restricted sharp gains in the spot silver prices. The white metal touched an intra-day high of $32.04/oz and closed at $32/oz on Friday. On the domestic front, prices ended on a flat note taking cues from strength in the spot silver prices while appreciation in the currency exerted downside pressure on the silver prices on MCX. Prices of silver closed at Rs.59,432/kg after touching an intra-day low of Rs. 59,322/kg in yesterdays trading session.

3.7 #N/A

1.7 #N/A

3.6 #N/A

2.6

-0.3

11.3

Source: Reuters

Outlook
From the intra-day perspective, we expect prices to trade on a positive note on the back of rise in risk appetite in the global market sentiments along with weakness in the DX. Apart from this stimulus measures announced by the Bank of Japan is also expected to support an upside in the precious metals. In the domestic markets, gold prices are expected to trade with an upward bias due to rise in the import duty on gold. However, appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Feb13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for January 22, 2013 Support 1685/1680 30650/30550 31.80/31.65 59100/58800 Resistance 1696/1702 30850/30950 32.10/32.25 59600/59900

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Tuesday| January 22, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased by 0.2 percent yesterday ahead of the policy meeting of Bank of Japan which may declare stimulus measures to boost the economic growth.
Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Feb13) ICE Brent Crude (Feb13) MCX Crude (Jan13) Unit $/bbl $/bbl $/bbl Last 95.5 113.2 Prev. day 1.3 0.7 WoW 1.8 1.1 as on 21 January, 2013 MoM 6.4 0.0 YoY -5.1 3.0

95.5 111.7

1.3 -0.2

1.8 -0.2

5.9 1.2

-5.1 0.1

Additionally, weakness in the DX also supported an upside in the oil prices. Crude oil prices touched an intra-day high of $95.48/bbl and closed at $95.47/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.2 percent and closed at Rs.5,157/bbl after touching an intra-day high of Rs.5,175/bbl on Monday. However, depreciation in the Indian Rupee cushioned sharp fall in the crude oil prices on the MCX.

$/bbl 5161.0 Rs/bbl

Source: Reuters

0.2

2.6

4.3

2.3

Market Highlights - Natural Gas (% change)

Natural Gas (NG)

as on 21 January, 2013

Unit $/mmbtu Rs/ mmbtu

Last 3.63 194.8

Prev. day 1.79 1.30

WoW 7.62 4.90

MoM 5.19 1.62

YoY 54.93 65.65

Source: Reuters

Outlook In the intra-day, we expect crude oil prices to trade higher on the back of mixed global market sentiments along with weakness in the DX. Provision of aid to Greece is also expected to raise hopes that the demand from the region might improve. Appreciation in the Indian Rupee will cap sharp gains in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Jan 13 $/bbl Rs/bbl valid for January 22, 2013 Support 95.20/94.30 5120/5070 Resistance 96.50/97.30 5190/5230 Nymex NG MCX NG (Jan 13)

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Tuesday| January 22, 2013

International Commodities
Base Metals
Base metal prices traded on a negative note yesterday taking cues from weak physical demand from the top consumer of industrial metals, China. However, downside was restricted by the comments from the U.S. House Republican leaders that they would seek to pass a four month extension on debt ceiling issue. In the domestic markets, depreciation in the Indian rupee supported the prices of base metals to move upwards. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) Rs/kg
436.3 -0.5 -1.0 -0.7 2.9

as on 21 January, 2013 WoW

0.6

Last
8055.0

Prev. day
-0.4

MoM
1.7

YoY
5.7

$/tonne

Copper
Copper prices declined 0.4 percent on account of weak physical demand from China. Imports of refined copper by the nation dropped 4.7 percent in December 2012 as against the previous month. China consumes around 40 percent of the worlds supplies of copper. Rise in the copper inventories also pushed the prices of the metal downwards. However, the US lawmakers seeking an extension a four month extension for the resolution on the debt ceiling issue revived the risk appetite thus restricted the losses in the prices. LME Copper inventories rose 0.04 percent in yesterdays session and stood at 345,525 tonnes on Monday as against 345,375 tonnes on 18th January 2013. Prices of Copper on LME touched an intra-day low of $ 8,047 per tonne and closed at $ 8,055 /tonne on Monday. In the domestic markets, MCX copper declined 0.5 percent tracing weakness in the international prices. Depreciation in the Indian rupee however restricted losses in the metal prices. In the domestic markets prices of Copper on MCX touched an intra-day low of Rs. 436.1 per kg and closed at Rs. 436.3 per kg on Monday. Outlook In todays session, we except base metal prices to trade on a positive note on the back of approval of the disbursement of aid for Greece by the European finance ministers. The metal prices is also expected to get support from the hopes of recovery in the US and China. The US lawmakers seeking to vote on the bill to suspend the debt ceiling issue until May 19 would also lend support to the prices. Weakness in the DX is expected to push prices upwards. Announcement of stimulus package by the Bank of Japan is also e expected to push prices upwards. In the domestic markets, appreciation in the Indian rupee is expected to restrict gains of MCX base metal prices. Technical Outlook
Unit MCX Copper Feb13 MCX Zinc Jan13 MCX Lead Jan 13 MCX Aluminum Jan13 MCX Nickel Jan 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for January 22, 2013 Support 434/432 107.8/107 122.5/121.8 107.5/106.8 927/920 Resistance 438/441 109.2/110 124/124.8 108.8/109.5

LME Aluminum (3 month) MCX Aluminum (Jan13) LME Nickel (3 month) MCX Nickel (Jan13) LME Lead (3 month) MCX Lead (Jan13) LME Zinc (3 month) MCX Zinc (Jan13)

$/tonne

2045.0

-0.2

-0.6

-2.0

1.3

Rs /kg

108.1

-0.8

-2.6

-4.1

-2.6

$/tonne

17430.0

-0.7

0.5

-2.1

-6.1

Rs /kg

932.7

-1.2

-1.1

-3.8

-8.2

$/tonne

2296.3

-0.5

-0.1

-1.7

13.4

Rs /kg

123.2

-0.5

-1.5

-3.0

13.6

$/tonne

2033.0

-0.2

1.7

-2.3

9.5

Rs /kg

108.6

-0.5

0.0

-3.3

6.7

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 21st January
345525 5177475 148020 1222850 294500

18th January
345375 5188750 147804 1225500 296050

Actual Change 150 -11,275 216 -2,650 -1,550

(%) Change 0.0 -0.2 0.1 -0.2 -0.5

Source: Reuters

Technical Chart MCX Copper

Source: Telequote

940/947

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Commodities Daily Report

Tuesday| January 22, 2013

International Commodities
Important Events for Today

Indicator Monetary Policy Statement Overnight Call Rate All Industries Activity m/m BOJ Press Conference ECOFIN Meetings Public Sector Net Borrowing German ZEW Economic Sentiment ZEW Economic Sentiment Spanish HPI q/q 10-y Bond Auction CBI Industrial Order Expectations Existing Home Sales ECB President Draghi Speaks

Country JPY JPY JPY JPY EU UK EU EU EU UK UK US EU

Time (IST) Tentative Tentative

Actual -

Forecast <0.10% -0.3% 13.4B 12.2 14.1 -10 5.09 M -

Previous <0.10% -0.3% 15.3B 6.9 7.6 -2.4% 1.80|1.7 -12 5.04M -

Impact High High Low High Medium Medium High Medium Medium Medium High High High

Tentative All Day 3:00 pm 3:30 pm 3:30 pm Tentative Tentative 4:30 pm 8:30 pm 11:30 pm

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