Commodities Daily Report

Tuesday| October 9, 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

Tuesday| October 9, 2012

International Commodities
Overview
IMF cuts global growth forecast to 3.3 percent for 2012. German Trade Balance was at a surplus of 18.3 billion Euros in August. IMF cuts Indias GDP growth sharply downward to 4.9 percent for 2012. German Trade Balance was at a surplus of 18.3 billion Euros in August. Japans Current Account was at a surplus of 0.72 trillion Yen in August. Asian markets are trading on a mixed note anticipating hopes of stimulus measures to be announced in China overshadowing concerns of slow down after International Monetary Fund (IMF) cuts its global growth forecasts. According to IMF global growth is expected to slow down 3.3 percent in 2012, the slowest since the 2009 recession, and 3.6 percent next year. While, it has cut Indias GDP growth forecast sharply to 4.9 percent in 2012 from earlier estimate of 6.1 percent in July 2012. However it said that the growth could bounce back to 6 percent in 2013. US Dollar Index declined 0.2 percent taking cues from bearish global market sentiments and thereby rise in the risk aversion amongst the market participants. This led to increase in the demand for the low yielding currency that is DX. US equities also ended in the negative territory due to rise in the risk aversion as the European Finance Ministers met yesterday to resolve the sovereign debt crisis. The currency touched a high of 79.81 and closed at 79.62 levels on Monday. The Indian Rupee depreciated around 1.5 percent in yesterdays trading session. The currency depreciated on the back of rise in risk aversion in the global markets which added downside pressure on the currency. Additionally, dollar demand from the importers also lead to fall in the currency. Also, strength in the DX acted as a negative factor for the Indian Rupee. The currency touched a low of 52.65 in yesterdays trade and closed at 52.638 on Monday. For the current month FII inflows totalled at Rs. 3,380.70 crores till 5 October 2012. While year to date basis, net capital inflows stood at Rs. th 85,711.50 crores till 5 October 2012. Japans Current Account was at a surplus of 0.72 trillion Yen in August from earlier surplus of 0.34 trillion Yen a month ago.
th

Market Highlights (% change)

Last INR/$ (Spot)
52.54

as on 8 October, 2012

Prev day
-1.2

w-o-w
-0.3

m-o-m
5.2

y-o-y
-6.7

$/Euro (Spot)

1.2969

-0.5

0.6

1.7

-3.0

Dollar Index

79.62

0.2

-0.4

-0.9

0.6

NIFTY

5676.0

-1.2

-0.7

5.8

16.1

SENSEX

18709.0

-1.2

-0.6

5.3

15.3

DJIA

13583.7

-0.2

0.5

2.5

22.3

S&P

1455.88

-0.3

0.8

1.2

26.0

Source: Reuters

Euro declined 0.5 percent due to rise in the risk aversion along with strength in the DX. Further, unfavorable data from the region also exerted downside pressure on the currency. The currency touched a low of 1.2935 and closed at 1.2969 on Monday. German Trade Balance was at a surplus of 18.3 billion Euros in August as against a previous surplus of 16.3 billion Euros a month ago. European Sentix Investor Confidence was at -22.2mark in October from earlier decline of 23.2-level in September. German Industrial Production declined by 0.5 percent in August as compared to rise of 1.2 percent in prior month. British Retail Consortium (BRC) Retail Sales Monitor increased by 1.5 percent in September as against a previous decline of 0.4 percent in August. Royal Institution of Chartered Surveyors (RICS) House Price Balance declined by 15 percent in September from earlier decline of 18 percent a month ago.

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Commodities Daily Report

Tuesday| October 9, 2012

International Commodities
Bullion Gold
Spot gold prices declined 0.3 percent due to bearish global market sentiments along with strength in the DX. Further rise in the risk aversion was witnessed as European Finance ministers meeting began yesterday to resolve the sovereign debt crisis. The yellow metal touched a low of $ 1,766.14 per ounce and settled at $1,774.29 per ounce on Monday. In the domestic markets MCX Gold prices gained 1.6 percent due to sharp depreciation in the Indian rupee. MCX gold prices settled at Rs.31, 331 per 10gms after touching a high of Rs. 31,362 per 10gms in yesterdays session. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Dec12) MCX Gold (Dec12) Unit $/oz Rs/10 gms $/oz Last
1774.3

as on 8 October, 2012 Prev day

-0.3

WoW
0.0

MoM
2.8

YoY
8.3

31050.0

0.0

1.8

-2.7

17.9

1773.5

-0.6

-0.8

2.4

7.4

$/oz Rs /10 gms

1773.5

-0.3

-0.4

2.6

8.5

Silver
Spot silver prices also declined 1.5 percent taking cues from bearishness in the spot gold prices along with weakness in the base metal pack. Additionally strength in the DX also exerted downside pressure on the spot silver prices. The white metal touched an intra-day low of 3$3.72 per ounce and settled at $34.0 per ounce on Monday. In the domestic markets silver prices on MCX swung between gains and losses and settled 0.4 percent down. Sharp downside in the prices was cushioned on the back of depreciation in the Indian rupee in yesterdays session.

31331.0

1.6

1.0

-1.8

19.5

Source: Reuters

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
34.0 61060.0 3388.0

as on 8 October, 2012 WoW

-2.0 -1.0 -1.4

Prev day
-1.5 -1.0 -2.8

MoM
2.0 -3.2 0.8

YoY
9.2 13.1 5.9

Outlook
In the intraday, we expect precious metals to trade with negative bias taking cues from mixed global market along with strength in the DX. In the domestic markets depreciation in the Indian rupee will exert downside pressure on the precious metals on the MCX.

3399.1

-1.5

-2.6

1.2

9.8

61474.0

-0.4

-2.3

-3.9

18.4

Source: Reuters

Technical Chart Spot Gold

Technical Outlook
Unit Spot Gold MCX Gold Dec12 Spot Silver MCX Silver Dec12 $/oz Rs/10 gms $/oz Rs/kg

valid for October 9, 2012 Support 1773/1768 31250/31160 33.95/33.70 61100/60700 Resistance 1784/1791 31440/31560 34.30/34.50 61800/62100

Source: Telequote

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Commodities Daily Report

Tuesday| October 9, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 0.6 percent in yesterdays trading session taking cues from expectations that Euro Zone Finance Ministers meeting to fight the regions debt crisis along with slowdown in Asia will curb the demand for the fuel. Additionally, strength in the DX also exerted downside pressure on the prices. Crude oil prices touched an intra-day low of $88.21/bbl and closed at $89.30/bbl in yesterdays trading session. On the domestic bourses, prices increased by 0.8 percent as a result of depreciation in the Indian Rupee and closed at Rs.4,700/bbl after touching an intra-day low of Rs.4,625/bbl on Monday. 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
89.2 113.1

as on 8 October, 2012 WoW

-3.5 0.0

Prev. day
-0.7 0.4

MoM
-7.6 -0.5

YoY
8.2 3.8

$/bbl

89.3

-0.6

-3.4

-7.5

7.7

$/bbl

111.8

-0.2

-0.3

-2.6

5.6

Rs/bbl

4700.0

0.8

-3.3

-11.8

16.5

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Oct12)

as on 8 October, 2012

Natural Gas
Nymex natural gas prices gained around 0.7 percent yesterday on the back of expectations of unseasonably cold weather which will lead to increase in demand for the fuel. However, stronger DX capped sharp upside in the prices. Gas prices touched an intra-day high of $3.431/mmbtu and closed at $3.42/mmbtu in yesterdays trading session. On the domestic front, prices gained by 2.5 percent as a result of depreciation in the Indian Rupee and closed at Rs.179.30/mmbtu after touching an intra-day high of Rs.180.50/mmbtu on Monday. Outlook We expect crude oil prices to trade on weak note on the back of mixed global market sentiments along with strength in the DX. Further IMF reducing the global growth forecast is likely to add pressure to the crude prices today. On the domestic front depreciation in the Indian Rupee will cushion sharp fall in the crude oil prices on the MCX. Technical Outlook
Unit valid for October 9, 2012 Support Resistance

Unit $/mmbtu Rs/ mmbtu

Last
3.42 179.3

Prev. day
0.68 2.52

WoW
-2.79 -6.27

MoM
27.14 20.66

YoY
-1.84 4.06

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

89.80/89.20

91.0/91.80

MCX Crude Oct12

Rs/bbl

4680/4650

4740/4780

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Commodities Daily Report

Tuesday| October 9, 2012

International Commodities
Base Metals
Market Highlights - Base Metals (% change) The base metals pack traded on a negative note in the yesterdays trade on the back of rise in risk aversion in the global markets which added downside pressure on the prices. Additionally, strength in the DX also acted as a negative factor for the prices. However, decline in LME inventories cushioned sharp fall in the prices. In the Indian markets, depreciation in the Rupee prevented further fall in the prices.
Unit LME Copper (3 month) MCX Copper (Nov12) LME Aluminum (3 month) MCX Aluminum (Oct12) LME Nickel $/tonne
18073.0 -1.4 -3.9 7.9 -5.6

as on 8 October, 2012 WoW

-1.4

Last
8180.0

Prev. day
-0.9

MoM
1.4

YoY
12.2

$/tonne

Rs/kg

433.5

-0.2

-1.5

-4.4

20.7

$/tonne

2078.0

-1.4

-2.6

0.7

-5.9

Rs /kg

108.6

-0.3

-2.2

-4.2

0.9

Copper
Copper, the leader of the base metals complex declined by 0.9 percent yesterday on the back of weak global market sentiments coupled with strength in the DX. However, decline in LME Copper inventories by 0.1 percent which stood at 222,500 tonnes restricted sharp fall in the prices. The red metal touched an intra-day low of $8,128/tonne and closed at $8,180/tonne in yesterdays trading session. On the MCX, Copper November contract declined 0.2 percent and closed at Rs.433.50/kg after touching an intra-day low of Rs.431.1/kg on Monday. Depreciation in the Indian Rupee restricted further fall in the prices. Outlook In todays session, we expect base metals to trade on a bearish note on the back of mixed global market sentiments along with strength in the DX. However, expectation of stimulus measures to be announced in China may cushion sharp fall in the base metals. Depreciation in the Rupee will however cushion sharp fall in the prices of base metals on MCX. Technical Outlook
Unit MCX Copper Nov12 MCX Zinc Oct12 MCX Lead Oct12 MCX Aluminum Oct12 MCX Nickel Oct12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for October 9, 2012 Support 431/429 105.4/104.7 117.4/116.7 107.7/107 943/936 Resistance 435/437 106.8/107.5 118.8/119.5 109.2/109.9 957/963

(3 month) MCX Nickel (Oct12) LME Lead (3 month) MCX Lead (Oct12) LME Zinc (3 month) MCX Zinc (Oct12)
Source: Reuters

Rs /kg

950.1

-0.4

-3.7

2.5

1.9

$/tonne

2256.0

-1.0

-1.7

6.3

16.5

Rs /kg

118.1

-0.2

-1.6

0.9

23.7

$/tonne

2034.0

-1.9

-3.4

1.2

6.0

Rs /kg

106.1

-0.8

-3.5

-3.9

13.3

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 8th October
222,500 5,024,350 124,512 996,225 251,350

5th October
222,675 5,033,000 124,860 994,275 254,575

Actual Change
-175 -8,650 -348 1,950 -3,225

(%) Change
-0.1 -0.2 -0.3 0.2 -1.3 Source: Reuters

Technical Chart MCX Copper

Source: Telequote

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Commodities Daily Report

Tuesday| October 9, 2012

International Commodities
Important Events for Today

Indicator BRC Retail Sales Monitor y/y RICS House Price Balance Current Account BOJ Gov Shirakawa Speaks ECB President Draghi Speaks ECOFIN Meetings Manufacturing Production m/m Trade Balance NIESR GDP Estimate

Country UK UK Japan Japan Euro Euro UK UK UK

Time (IST) 4:31am 4:31am 5:20am Tentative 1:00pm All Day 2:00pm 2:00pm 7:30pm

Actual 1.5% -15% 0.72T -

Forecast -20% 0.52T -8.3B -

Previous -0.4% -19% 0.34T -7.1B 0.2%

Impact Medium Medium High Medium High Medium High Medium Medium

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