Commodities Daily Report

Thursday| February 14, 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

Thursday| February 14, 2013

International Commodities
Overview
US Core Retail Sales increased by 0.2 percent in the last month. Indias Trade Balance was at a deficit of $20 billion in January. European Industrial Production rose by 0.7 percent in December. Japans Prelim GDP declined by 0.1 percent in Q4 of 2012. Asian markets are trading higher amid speculation that an unexpected decline in the Japans GDP might boost Prime Minister Shinzo Abes efforts of ending deflation. Investors are also awaiting the G-20 meeting scheduled on Friday and Saturday which is expected to discuss on the tone of the forex markets. US Core Retail Sales increased by 0.2 percent in January as against a rise of 0.3 percent in December. Retail Sales was at 0.1 percent in January from 0.5 percent a month ago. Import Prices rose by 0.6 percent in last month as compared to decline of 0.5 percent in prior month. Business Inventories grew by 0.1 percent in December with respect to increase of 0.2 percent in earlier month. Indias Trade Balance was at a deficit of $20 billion in January from earlier deficit of $17.7 billion in December.
S&P 1520.3 0.1 0.5 3.3 12.4

Market Highlights (% change)

Last INR/$ (Spot) 53.82 Prev day 0.1

as on 13 February, 2013 w-o-w -1.2 m-o-m 1.5 y-o-y -8.1

$/Euro (Spot)

1.3453

0.0

-0.5

0.8

2.0

Dollar Index NIFTY

80.17

0.0

0.5

0.7

1.4

5933.0

0.2

-0.4

-0.3

10.1

SENSEX

19608.1

0.2

-0.2

-0.3

10.3

DJIA

13982.9

-0.3

0.0

3.7

8.6

US Dollar Index (DX) traded on a flat note and declined marginally yesterday on account of rise in risk appetite in the global market sentiments which led to decline in demand for the low yielding currency. Apart from that, European industrial data which came on a positive note also exerted downside pressure on the DX. However, further downside in the currency was cushioned on account of US equities trading on a mixed note. It touched an intra-day low of 79.92 and closed at 80.17 on Wednesday. The Indian Rupee appreciated around 0.1 percent in yesterdays trading session. The currency appreciated on the back of mild selling of dollars from the exporters coupled with upbeat domestic market sentiments. Additionally, weakness in the DX also supported an upside in the currency. However, sharp upside in the currency was capped on account of countrys trade balance coming on a deficit note. It touched an intra-day high of 53.68 and closed at 53.82 against dollar on Wednesday. For the month of January 2013, FII inflows totaled at Rs.19,725.30 crores ($3,703.48 million) as on 13th February 2013. Year to date basis, net capital inflows stood at Rs.41,784.20 crores ($7,762.80 million) till 13th February 2013.

Source: Reuters

The Euro traded on a flat note and appreciated marginally yesterday on the back of European Industrial Production rose by 0.7 percent in December as against a decline of 0.7 percent a month ago. German Wholesale Price Index (WPI) was at 0.3 percent in the month of January. Additionally, weakness in the DX coupled with upbeat global market sentiments also supported an upside in the currency. The Euro touched an intra-day high of 1.352 and closed at 1.3453 against dollar on Wednesday.

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Commodities Daily Report

Thursday| February 14, 2013

Bullion Gold

International Commodities

Spot gold prices witnessed selling pressure and ended 0.5 percent lower on Wednesday. Weak physical buying and less than expected retail sales data in US exerted downside pressure on the gold prices. Strength in the DX also added to the losses in gold prices. Additionally, investors were adopting a cautious approach ahead of the G20 meeting on Friday and Saturday this week which is expected to set the tone of forex markets. The yellow metal touched an intra-day low of $1639.94 per ounce and closed at $1,642.4 per ounce on Wednesday. On the MCX, Gold April contract ended 0.1 percent lower. Appreciation in the Indian rupee exerted downside pressure in the MCX gold prices. Gold prices on the MCX closed at Rs. 30,554/10 gms on Wednesday after touching an intra-day low of Rs. 30,510/ 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
1642.4

as on 13 February, 2013 Prev. day

-0.5

WoW
-2.1

MoM
-1.2

YoY
-4.6

30150.0

-0.2

-0.5

-1.1

8.5

1645.0

-0.2

-1.7

-0.8

-4.4

$/oz

1644.2

-0.3

-2.0

-1.0

-4.6

Rs /10 gms

30554.0

-0.1

-1.0

-0.7

8.7

Silver
Spot Silver prices also witnessed a selling pressure taking cues from fall in the Spot gold prices coupled with strength in the DX. Weakness in most of the base metals also acted as a bearish factor for the silver prices. In the Indian markets prices of silver on MCX witnessed a decline and ended 0.2 percent lower taking cues from fall in the spot silver prices along with appreciation in the Rupee. The white metal touched an intra-day low of $ 30.7/oz and closed at $ 30.75 per oz on Wednesday. In the Indian markets, MCX silver prices ended 0.2 percent down and closed at Rs. 57,442/kg on Wednesday and touched an intra-day low of Rs. 57,405/ kg. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg Last
30.8

Source: Reuters

as on 13 February, 2013 WoW

-3.3

Prev day
-1.1

MoM
1.1

YoY
-8.7

58320.0

0.4

-0.9

-0.3

4.0

$/oz $/ oz

3103.5 3085.4

0.6 -0.5

-2.1 -3.2

1.2 1.6

-8.3 -8.4

Outlook
In todays session we expect precious metals to bounce back from the lows on expectation of demand from the Asian buyers after the Lunar New year holiday along with weakness in the DX. However, investors might are also expected to adopt a cautious approach ahead of the G-20 meeting on Friday and Saturday this week which is expected to set the tone of forex markets. This might restrict gains in the precious metal prices. In the domestic markets, appreciation in the rupee might cap gains in the precious metals on MCX or even push prices downwards. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for February 14, 2013 Support 1640/1636 30480/30400 30.70/30.55 57280/57000 Resistance

Rs / kg

57442.0

-0.2

-0.8

-1.1

1.4

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

1648/1653 30630/30730 30.95/31.10 57700/58000

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Commodities Daily Report

Thursday| February 14, 2013

Energy Crude Oil

International Commodities
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
97.0 119.6 97.0

Nymex crude oil prices declined by 0.5 percent yesterday taking cues from Irans statement that it was nearing the agreement with nuclear inspectors along with US Energy Department (EIA) said that US crude output rose to highest level in last 20 years. Additionally, rise in US crude oil inventories coupled with increase in US production for crude oil also exerted downside pressure on the prices. However, sharp downside in the crude oil prices was cushioned as a result of weakness in the DX. Crude oil prices touched an intra-day low of $96.63/bbl and closed at $97.01/bbl in yesterdays trading session. On the domestic bourses, prices traded on a flat note and closed at Rs.5,249/bbl after touching an intra-day high of Rs.5,273/bbl on Wednesday. Appreciation in the Indian Rupee capped sharp gains in the prices on the MCX. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories rose less than expected by 560,000 million barrels to 372.20 million barrels for the week ending on 8th February 2013. Gasoline stocks declined by 0.8 million barrels to 233.20 million barrels and whereas distillate stockpiles fell by 3.7 million barrels to 125.90 million barrels for the last week. News: Iran is nearing the agreement with United Nations nuclear inspectors which arrived in Iran to negotiate and access to the Persian Gulf nations nuclear facilities. International Atomic Energy Agency (IAEA) inspectors led by Herman Nackaerts are looking for a deal that would include a visit to the Parchin military site, the place where nuclear work may have been carried out as per the intelligence reports received by the agency.

as on 13 February, 2013 WoW

0.6 1.3 0.4

Prev. day
-0.5 0.5 -0.5

MoM
3.7 7.8 3.7

YoY
-3.3 -0.2 -3.9

$/bbl

118.7

0.1

1.7

7.3

0.7

Rs/bbl

5249.0

1.9

4.3

2.5

6.0

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Feb 13) Unit $/mmbtu Rs/ mmbtu Last
3.306 179

as on 12 February, 2013

Prev. day
2.35 1.76

WoW
-3.28 -2.66

MoM
-0.63 -1.10

YoY
35.99 48.18
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 decline by 166 billion cubic feet (bcf) for the week ending on 8th February 2013.
Source: Telequote

Outlook In todays session, we expect crude oil prices to trade higher due to weakness in the DX along with firm global market sentiments. However, with rise in the crude oil output in US to a 20 year high along with talks amongst Iran and US are showing signs of progress is likely to cap the gains. Appreciation in the Indian Rupee will act as a bearish factor for the crude oil prices on the MCX. Technical Outlook valid for February 14, 2013
Unit NYMEX Crude Oil MCX Crude Feb 13 $/bbl Rs/bbl Support 96.70/95.90 5220/5180 Resistance 97.90/98.50

Technical Chart NYMEX Natural Gas

Source: Telequote

5290/5320

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Commodities Daily Report

Thursday| February 14, 2013

International Commodities
Base Metals
Most of the base metals traded with a negative bias except aluminium and nickel. Prices traded with a bearish tone taking cues from less than expected rise in the retail sales data from the US which disappointed market participants along with strength in the DX. However, sharp fall in the prices was cushioned as investors are optimistic over the Chinese demand which might rise after China Lunar New Year holidays. Decline in the LME inventories in most of the metals also cushioned fall in the base metals Appreciation in the Indian Rupee acted a bearish factor for the base metals pack on the MCX. 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

as on 13 February, 2013 WoW 0.0 MoM 2.4 YoY -2.5

Last 8235.5

Prev. day -0.1

$/tonne

Rs/kg

444.9

-0.1

1.2

-0.1

6.2

$/tonne

2138.8

1.1

1.7

1.9

-3.5

Rs /kg

113.7

1.0

2.8

-0.4

4.9

Copper
Copper prices fell 0.1 percent in yesterdays session as the US retail sales disappointed expectations of the market participants coupled with strength in the DX. However, expectation of rise in the demand from the Chinese buyers cushioned fall in the copper prices on Wednesday. Further, decline in the copper inventories on the LME by 0.23 percent restricted fall in the copper prices in yesterdays session. LME Copper inventories declined 0.23 percent yesterday and stood th at 398,925 tonnes on Wednesday as against 399,850 tonnes on 12 February 2013. Copper prices on LME touched an intra-day low of $8,166.25per tonne and closed at $8,235.5 per tonne on Wednesday. In the domestic markets MCX copper declined 0.1 percent and closed at Rs. 444.9 per kg on Wednesday tracking international prices. Appreciation in the Indian rupee pushed prices copper on the MCX downwards. Outlook In todays session, we expect base metals to trade higher on hopes of rise in the demand from China, the key consumer of the base metals along with weakness in the DX. However, investors are adopting a cautious approach ahead G-20 meet scheduled on February 15-16 to to set the tone of forex markets. This is likely to restrict gains in the base metals pack today. Appreciation in the Indian Rupee will cap rise in the base metals prices on the 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 14, 2013 Support 443/441 117/116.2 127.8/128.7 113/112.6 984/977 Resistance 447/449 118.4/119.2 130.3/131

$/tonne

18395.0

0.5

0.2

4.7

-10.8

Rs /kg

991.1

0.6

1.7

2.9

-2.6

$/tonne

2414.0

-0.2

-0.3

4.7

13.7

Rs /kg

129.6

-0.3

0.8

2.7

24.4

$/tonne

2204.8

-0.4

1.8

9.1

6.6

Rs /kg

117.7

-0.5

2.8

7.0

15.3

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 13th February 398925 5147225 153912 1188100 287350 12th February 399850 5142450 154122 1188100 287625 Actual Change -925 4,775 -210 0 -275 (%) Change -0.23 0.09 -0.14 0.00 -0.10
Source: Reuters

Technical Chart LME Copper

Source: Telequote

114.2/114.8 1000/1010

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Commodities Daily Report

Thursday| February 14, 2013

International Commodities
Important Events for Today

Indicator Prelim GDP q/q Bank Holiday Monetary Policy Statement Overnight Call Rate French Prelim GDP q/q BOJ Press Conference German Prelim GDP q/q French Prelim Non-Farm Payrolls q/q ECB Monthly Bulletin Italian Prelim GDP q/q Flash GDP q/q Unemployment Claims Mortgage Delinquencies Natural Gas Storage FOMC Member Bullard Speaks

Country Japan China Japan Japan EU Japan EU EU EU EU EU US US US US

Time (IST) 5:20 am All Day Tentative Tentative 12:00 pm Tentative 12:30 pm 1:15 pm 2:30 pm 2:30 pm 3:30 pm 7:00 pm 14th-15th 9:00 pm 11:20 pm

Actual -0.1% -

Forecast 0.1% <0.10% -0.2% -0.5% -0.2% -0.5% -0.4% 361K -

Previous -0.9% <0.10% 0.1% 0.2% -0.3% -0.2% -0.1% 366K 7.40% -118B -

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

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