Commodities Daily Report

Wednesday| March 13, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst [email protected] (022) 2921 2000 Extn :6130 Saif Mukadam Research Analyst [email protected] (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst [email protected] (022) 2921 2000 Extn :6104

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Commodities Daily Report

International Commodities
Overview
Indias industrial production rose by 2.4 percent in January. Japans Consumer Confidence increased to 44.3-mark in February. German WPI declined to 0.1 percent in the last month. UKs Manufacturing Production declined by 1.5 percent in January. Asian markets are trading on a mixed note today on the back of expectations that rise in the global market sentiments were too high and profit booking is seen at higher levels. Indias industrial production rose by 2.4 percent in January as against a decline of 0.6 percent in December. Manufacturing output increased by 2.7 percent in January from previous fall of 0.7 percent a month ago. Consumer prices index was at 10.91 percent in February as compared to 10.79 percent in January. US Dollar Index (DX) traded on a flat note and depreciated marginally in yesterdays trading session on the back of mixed global market sentiments coupled with range bound US markets. Additionally, rise in risk appetite in the global market sentiments also lead to fall in demand for the low yielding currency. Further, decline in German WPI data also exerted downside pressure on the DX. The currency touched an intra-day low of 82.425 and closed at 82.60 on Tuesday. The Indian Rupee appreciated by 0.3 percent in yesterdays trading session. The currency appreciated on the back of favorable industrial production and manufacturing output data from the country. Additionally, selling of dollars from exporters coupled with constant foreign inflows also supported an upside in the currency. Further, upbeat domestic market sentiments also acted as a positive factor for the currency. The Indian Rupee touched an intra-day high of 54.065 and closed at 54.14 against dollar on Tuesday. For the month of March 2013, FII inflows totaled at Rs.3,784.50 crores th ($691.05 million) as on 12 March 2013. Year to date basis, net capital th inflows stood at Rs.50,282.70 crores ($9,325.60 million) till 12 March 2013. UKs Manufacturing Production declined by 1.5 percent in January as against a rise of 1.5 percent a month ago. Trade Balance was at a deficit of 8.2 billion Pounds in January from earlier deficit of 8.7 billion Pounds in December. Industrial Production fell by 1.2 percent in January as compared to rise of 1.1 percent in prior month.

Market Highlights (% change)

as on 12 March, 2013 w-o-w 1.5 m-o-m -0.7 y-o-y -7.7

$/Euro (Spot)

1.3032

-0.1

-0.1

-3.1

-0.9

Dollar Index NIFTY

82.60

0.0

0.5

3.0

4.0

5914.1

-0.5

2.2

-0.1

8.2

SENSEX

19564.9

-0.4

2.2

0.0

7.0

DJIA

14450.1

0.0

1.4

3.1

11.5

S&P

1552.5

-0.2

0.8

2.2

13.2

Source: Reuters

The Euro depreciated by 0.1 percent in yesterdays trade as the European Central Bank council member Jens Weidmann gave the hint that ECB may continue its monetary stimulus measures. Further, mixed global market sentiments also added downside pressure. German Final Consumer Price Index (CPI) remained unchanged at 0.6 percent in the month of February. German Wholesale Price Index (WPI) declined to 0.1 percent in February as against a rise of 0.3 percent in January. The Euro touched an intra-day low of 1.299 and closed at 1.3032 against dollar on Tuesday. Japans Consumer Confidence increased by 1 point to 44.3mark in February as against a rise of 43.3-level in January.

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Commodities Daily Report

International Commodities
Bullion Gold
Spot gold prices increased by 0.7 percent in the yesterday trading session on the back of worries over Europes debt crisis coupled with weakness in DX. Further, expectation of monetary stimulus measures from major central banks also supported prices to trade positive. . Additionally, negative economic data from UK also supported prices to trade green. The yellow metal touched an intra-day high of $1598.2/oz and closed at $1592.1/oz on Tuesday trading session. In the Indian markets, prices ended on positive note in the yesterday trading session and closed at Rs29445/10 gms after touching an intra-day high of Rs. 29519/10 gms on Tuesday. Appreciation in the Indian rupee prevented sharp upside movement. 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 1592.1 29420.0 Prev. day 0.7 0.6 as on 12 March, 2013 WoW 1.1 -0.6 MoM -3.5 -2.6 YoY -6.3 6.1

1594.0

0.9

0.9

-3.2

-6.1

$/oz

1591.5

0.9

1.1

-3.2

-6.3

Rs /10 gms

29445.0

0.4

-0.4

-3.7

5.3

Source: Reuters

Silver
Taking cues from rise in gold prices along with upside in base metal complex, Spot silver prices ended on positive note by 0.5 percent on Tuesday. Weakness in DX supported prices to trade on positive note. However, mixed global market sentiments coupled with negative economic data from UK capped sharp gains in prices. The white metal prices touched an intra-day high of $29.35/oz and closed at $29.1/oz in yesterdays trade. On the domestic front, prices ended on a positive note by 0.6 percent and closed at Rs. 54943/kg after touching an intra-day high of Rs. 55199/kg on Tuesday. Appreciation in the Indian rupee capped sharp gains in prices.

Market Highlights - Silver (% change)

as on12 March, 2013 WoW 1.5 -0.5 MoM -6.4 -4.8 YoY -13.3 -4.9

$/oz $/ oz

2925.0 2913.1

1.2 1.1

1.1 2.0

-5.2 -6.0

-13.4 -12.7

Rs / kg

54943.0

0.6

2.1

-4.5

-5.9

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of expectation of monetary stimulus measures from major central banks coupled with weakness in DX. Further, worries over Europe debt crisis and UKs economic condition may support prices to trade positive. In the Indian markets, appreciation in the Indian Rupee will cap sharp upside in prices on MCX. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for March 13, 2013 Support 1587/1581 29340/29230 28.90/28.80 54600/54300 Resistance 1598/1602 29530/29620 29.30/29.50 55200/55500
Source: Telequote

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Commodities Daily Report

Energy

International Commodities
Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April 13) ICE Brent Crude (March13) MCX Crude (Mar 13) Unit $/bbl $/bbl $/bbl Last 92.4 109.6 92.5 Prev. day 0.4 -0.1 0.5 WoW 1.7 -1.7 1.9 as on 12 March, 2013 MoM -5.2 -7.9 -5.1 YoY -13.1 -14.9 -13.0

Crude Oil
Nymex crude oil prices increased around 0.5 percent yesterday taking cues from unexpected decline in US crude oil inventories coupled with weakness in the DX. However, sharp upside in the prices was capped as a result of increase in the OPEC production in the month of February. Crude oil prices touched an intra-day high of $93.47/bbl and closed at $92.4/bbl in yesterdays trading session. On the domestic bourses, prices gained by 1.2 percent and closed at Rs.5036/bbl after touching an intra-day high of Rs5060/bbl on Tuesday. Appreciation in the Indian Rupee prevented further gains in the prices on the MCX. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories declined unexpectedly by 1.4 million barrels to th 377.62 million barrels for the week ending on 8 March 2013. Gasoline inventories fell by 3.1 million barrels to 227.13 million barrels and whereas distillate inventories dropped by 2.2 million barrels to 120.45 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 th expected to rise by 2.3 million barrels for the week ending on 8 March 2013. Gasoline stocks are expected to fall by 1.2 million barrels whereas distillate inventories are expected to drop by 1.8 million barrels for the same period. News As per the Organization of Petroleum Exporting Countries (OPEC) monthly report the cartel pumped in 30.31 million barrels a day in the month of February as against 30.24 million barrels a day in January. The production is at highest level in the last three months since November. Outlook

$/bbl

109.7

-0.5

-1.8

-7.6

-13.1

Rs/bbl

5036.0

1.2

1.2

-4.0

-5.6
Source: Reuters

Market Highlights - Natural Gas (% change)

as on 12 March, 2013

WoW -2.97 -0.15

MoM -10.62 -10.89

YoY -37.47 -42.55

Technical Chart NYMEX Crude Oil

SSource: Telequote

For the intra-day perspective, we expect crude oil prices to trade on a positive note on the back of unexpected decline in US crude oil inventories from API, mixed global market sentiment along with weakness in the DX. However, sharp upside in the prices will be capped on account forecast of rise in US crude oil inventories coupled with increase in OPEC production. Appreciation in the Indian rupee will prevent gains in the prices on the MCX platform. Technical Outlook
Unit NYMEX Crude Oil MCX Crude March 13 $/bbl Rs/bbl valid for March 13, 2013 Support 92.20/91.50 5010/4970 Resistance 93.30/93.90 5070/5100

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

International Commodities
Base Metals
The base metals pack traded on a positive on the back of expectation of monetary stimulus measures from major central banks coupled with weakness in DX. However, negative economic data from UK and rise in the LME inventories capped sharp gains. Further, mixed global market sentiments coupled with worries over Europe debt crisis and UKs economic condition capped sharp upside movement in prices. On the MCX, appreciation in the Indian Rupee capped sharp upside in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (Mar13) LME Nickel (3 month) MCX Nickel (Mar13) LME Lead (3 month) MCX Lead (Mar13) LME Zinc (3 month) MCX Zinc (Mar13)
Source: Reuters

as on 12 March, 2013 WoW 0.7 MoM -0.2 YoY -7.3

Last 7829.5

Prev. day 0.8

$/tonne

Rs/kg

428.3

0.6

-0.6

-3.8

0.2

$/tonne

1982.0

1.2

0.2

-6.4

-11.1

Rs /kg

106.1

1.1

-1.3

-5.7

-3.9

Copper
Copper, the leader of the base metal pack increased by 0.8 percent in yesterdays trade on the back of expectation of monetary stimulus measures from major central banks along with expectations of physical buying from china may increase. However, rise in LME copper inventories by 0.8 percent which stood at 517,900 tonnes coupled with mixed global market sentiments capped sharp gains in the prices. Additionally, negative economic data from UK coupled with worries over Europe debt crisis and UKs economic condition prevented gains in the prices. The red metal touched an intra-day high of $7883/tonne and closed at $7829.5/tonne yesterdays trading session. On the domestic front, prices gained by 0.6 percent and closed at Rs. 428.3/kg on Monday after touching an intra-day high of Rs. 430.2/kg. Outlook In the intra-day, we expect base metals prices to trade on the positive note on the back of expectation of positive retail sales data from US coupled with weakness in DX. However, expectation of negative industrial production data from Europe along with worries over UKs economic condition may cap sharp gain in the prices. In the Indian markets, Appreciation in the Indian Rupee will cap sharp upside movement in the prices on the MCX. Technical Outlook
Unit MCX Copper April13 MCX Zinc Mar 13 MCX Lead Mar 13 MCX Aluminum Mar13 MCX Nickel Mar 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 13, 2013 Support 425/422 106/105 119.80/119 105.3/104.3 915/906 Resistance 431/434 107.8/108.5 121.3/122.2 106.8/107.5 930/937

$/tonne

17003.0

0.9

2.0

-7.1

-11.7

Rs /kg

923.7

0.8

0.9

-6.2

-4.2

$/tonne

2226.5

1.1

-0.2

-8.0

4.0

Rs /kg

120.5

1.1

-1.6

-7.3

12.8

$/tonne

1987.8

1.2

-1.2

-10.2

-4.3

Rs /kg

107.0

0.9

-2.7

-9.6

3.0

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 12th March 517,900 5,182,425 161,316 1,209,550 283,300 11th March 513,550 5,189,975 161,460 1,207,675 284,900 Actual Change 4,350 -7,550 -144 1,875 -1,600 (%) Change 0.8 -0.1 -0.1 0.2 -0.6
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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International Commodities
Important Events for Today
Indicator Industrial Production m/m Core Retail Sales m/m Retail Sales m/m Import Prices m/m Business Inventories m/m Crude Oil Inventories 10-y Bond Auction Country Europe US US US US US US Time (IST) 3:30pm 6:00pm 6:00pm 6:00pm 7:30pm 8:00pm 10:30pm Actual Forecast -0.1% 0.5% 0.5% 0.5% 0.5% 2.3M Previous 0.7% 0.2% 0.1% 0.6% 0.1% 3.8M 2.05/2.7 Impact Medium High High Medium Medium Medium Medium

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