Commodities Daily Report

Friday| January 18, 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

Friday| January 18, 2013

International Commodities
Overview
US Unemployment Claims declined by 37,000 for w/e on 11th Jan. Chinas GDP rose by 7.9 percent in Q4 of 2012. US Philly Fed Manufacturing Index was at -5.8-mark in January. Chinas Retail Sales increased by 15.2 percent in December.

Market Highlights (% change)

Last INR/$ (Spot) 54.35 Prev day 0.5

as on 17 January, 2013 w-o-w 0.1 m-o-m 0.9 y-o-y -7.5

Asian markets are trading on a positive note today on the back of favorable economic data from the US and Chinese economies. US Building Permits remained unchanged at 0.90 million in the month of December. Unemployment Claims declined by 37,000 to 335,000 for the week ending on 11th January from earlier rise of 372,000 in prior week. Housing Starts rose by 0.95 million in December as against a rise of 0.85 million in November. Philly Fed Manufacturing Index was at -5.8-mark in January as compared to rise of 8.1-level in December. Chinas Gross Domestic Product (GDP) rose by 7.9 percent in Q4 of 2012 as against a previous rise of 7.4 percent in Q3 of 2012. Fixed Asset Investment was at 20.6 percent in December from 20.7 percent in November. Industrial Production grew by 10.3 percent in December as compared to rise of 10.1 percent a month ago. Retail Sales increased by 15.2 percent in December with respect to earlier rise of 14.9 percent in prior month. US Dollar Index (DX) declined by 0.2 percent yesterday on the back of rise in risk appetite in the global market sentiments which led to decline in demand for the low yielding currency. Additionally, favorable economic data from the country also exerted downside pressure on the currency. US equities traded on a positive note which also acted as a negative factor for the currency. It touched an intra-day low of 79.66 and closed at 79.71 on Thursday. The Indian Rupee appreciated by 0.5 percent yesterday on the back of upbeat global market sentiments along with weakness in the DX. Additionally, domestic equities also traded on a positive note which also acted as a negative factor for the currency. Apart from that rising foreign inflows also supported an upside in the currency. It touched an intra-day high of 54.19 and closed at 54.35 on Thursday. For the current month 2013 FII inflows totaled at Rs 12,779.60 crores till th 17 January 2013. While year to date basis, net capital inflows stood at Rs. 12779.50 crores as on 17th January 2013.

$/Euro (Spot)

1.3374

0.6

0.8

1.0

4.0

Dollar Index NIFTY

79.71

-0.2

-0.1

0.5

-1.4

6039.2

0.6

1.2

2.1

21.9

SENSEX

19964.0

0.7

1.5

2.6

21.4

DJIA

13596.0

0.6

0.9

2.1

8.1

S&P

1480.94

0.56

0.60

3.54

14.48

Source: Reuters

Euro appreciated by 0.6 percent yesterday on account of upbeat global market sentiments. Apart from that weakness in the DX also supported an upside in the currency. The currency touched an intra-day high of 1.3387 and closed at 1.3374 in yesterdays trading session.

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Commodities Daily Report

Friday| January 18, 2013

International Commodities
Bullion
Market Highlights - Gold (% change)
as on 17 January, 2013 Prev day 0.5 -0.3 WoW 0.8 0.8 MoM 2.4 -0.1 YoY 1.6 12.1

Gold
Gold Unit $/oz Rs/10 gms $/oz Last 1687.3 30536.0

Spot gold prices increased around 0.5 percent yesterday on the back of rise in risk appetite in the global market sentiments. Additionally, weakness in the DX also supported an upside in the gold prices. The yellow metal touched an intra-day high of $1695.56/oz and closed at $1687.30/oz in yesterdays trading session. On the MCX, Gold February contract declined by 0.4 percent as a result of appreciation in the Indian Rupee and closed at Rs.30,758/10 gms after touching an intra-day high of Rs.30,870/10 gms on Thursday.

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

1675.0

-0.1

0.0

1.5

1.7

$/oz Rs /10 gms

1690.4

0.5

0.8

2.8

1.9

30758.0

-0.4

-0.6

0.9

Silver
Taking cues from rise in gold prices along with upside in the base metals complex, Spot silver prices gained around 1 percent yesterday. Further weakness in the DX also acted as a positive factor for the silver prices. The white metal touched an intra-day high of $31.92/oz and closed at $31.70/oz on Thursday. On the domestic front, prices declined by 0.2 percent on account of appreciation in the Rupee and closed at Rs.59,614/kg after touching an intra-day high of Rs.59,706/kg in yesterdays trading session. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 31.7 59260.0 3150.0 3178.6 59614.0 Prev day 1.0 -0.1 0.9 0.9 -0.2

Source: Reuters

as on 17 January, 2013 WoW 2.9 1.8 3.3 3.0 1.6 MoM 5.9 -0.7 1.2 7.3 3.9 YoY 4.1 11.5 4.5 4.2 -

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. 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 18, 2013 Support 1683/1675 30670/30520 31.55/31.40 59300/59000 Resistance 1693/1699 30850/30950 31.90/32.05 59900/60200

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Friday| January 18, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices rose by 1.3 percent taking cues from favorable economic data from the US along with expectations of rise in demand for the fuel. Additionally, weakness in the DX also supported an upside in the prices. Crude oil prices touched an intra-day high of $96.04/bbl and closed at $95.50/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.6 percent and closed at Rs.5,181/bbl after touching an intra-day high of Rs.5,188/bbl on Thursday. However, appreciation in the Indian Rupee capped sharp gains in the prices on the MCX. 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 95.5 111.8 95.5 Prev. day 1.3 0.0 1.3 WoW 1.8 -2.2 1.8 as on 17 January, 2013 MoM 6.4 -0.5 5.9 YoY -5.1 1.4 -5.1

$/bbl

111.1

0.4

-0.7

0.8

0.4

Rs/bbl

5181.0

0.6

1.0

4.1

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Jan 13) Unit $/mmbtu Rs/ mmbtu Last 3.494 190.5

(% change)

as on 17 January, 2013

Natural Gas
Nymex natural gas prices gained by 1.7 percent yesterday on the back of more than expected decline in US natural gas inventories. Additionally, weakness in the DX also acted as a positive factor for the prices. Gas prices touched an intra-day high of $/mmbtu and closed at $3.494/mmbtu on Thursday. In the Indian markets prices gained by more than 2 percent and closed at Rs.190.50/mmbtu after touching an intra-day high of Rs./mmbtu in yesterdays trading session. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined more than expected by 148 billion cubic feet (bcf) which stood at 3.168 trillion cubic feet for the week ending on 11th January 2012. Outlook In the intra-day, we expect crude oil prices to trade higher on the back of favorable economic data from US and Chinese economies which led to increase in expectation of rise in demand for the fuel along with weakness in the DX. 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 18, 2013 Support 94.45/93.70 5140/5100 Resistance 95.70/96.50 5210/5250

Prev. day 1.69 2.04

WoW 9.60 9.42

MoM 4.45 3.20

YoY 40.21 51.19

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Friday| January 18, 2013

International Commodities
Base Metals
Base metal prices traded on a positive note taking cues from favourable data from the US and on the expectations of better Chinese GDP data to be released today. Weakness in the DX also supported prices to move upwards in yesterdays session. Decline in the LME inventories of most of base metals also provided strength to the base metals prices. In the domestic markets, appreciation in the Indian rupee restricted sharp gains in the base metals prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Jan13) LME Nickel (3 month) MCX Nickel (Jan13) LME Lead $/tonne 2285.5 0.7 -2.7 -1.6 6.9 Rs /kg 950.2 -0.3 -0.4 -0.7 $/tonne 17600.0 1.1 0.6 0.7 -10.0 Rs /kg 109.5 -1.2 -4.3 -2.0 $/tonne 2050.0 0.0 -3.3 -0.6 -7.4 Rs/kg 439.7 0.2 -2.0 1.5 $/tonne Last 8058.0 as on 17 January, 2013 WoW -1.1 MoM 3.7 YoY -2.4 Prev. day 1.4

Copper
Copper prices gained 1.4 percent on account of positive housing data from the US and hopes of better GDP data from China which would be released today. Weakness in the DX also supported prices to move upwards. Decline in the LME inventories of copper added to the gains in the red metal prices. LME Copper inventories declined 0.96 percent in yesterdays session and stood at 3, 45,925 tonnes on Thursday as against 3, 49,275 tonnes on 18th January 2013. Prices of Copper on LME touched an intra-day high of $ 8,065 per tonne and closed at $ 8,058/tonne on Thursday. In the domestic markets, MCX copper gained 0.2 percent tracing firmness in the international prices along with weakness in the DX. Appreciation in the Indian rupee however capped gains in the metal prices. In the domestic markets prices of Copper on MCX touched an intra-day high of Rs. 440.8 per kg and closed at Rs. 439.65 per kg on Thursday. Outlook In todays session, we except base metal prices to trade with positive bias owing to better than expected economic growth and favorable industrial data from the China, indicating the economic recovery of the largest consumer of industrial metals. This would translate into increased demand for the metals from the nation. However, strength in the DX is expected to cap gains in the base metal prices. 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 18, 2013 Support 437/435 107.50/106.80 122.80/122.0 108.80/108.0 943/937 Resistance 441/443 109.0/109.80 124.20/125.0 110.20/111.0

(3 month) MCX Lead (Jan13) LME Zinc (3 month) MCX Zinc (Jan13)
Source: Reuters

Rs /kg

123.5

-0.5

-3.3

-2.4

$/tonne

2011.0

1.2

-2.0

-2.7

0.1

Rs /kg

108.1

0.0

-2.6

-3.4

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 17 January 345,925 5,173,950 147,228 1,224,200 295,450
th

16 January 349,275 5,184,575 147,342 1,226,775 298,425

th

Actual Change -3,350 -10,625 -114 -2,575 -2,975

(%) Change -1.0 -0.2 -0.1 -0.2 -1.0

Source: Reuters

Technical Chart MCX Copper

Source: Telequote

960/967

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Commodities Daily Report

Friday| January 18, 2013

International Commodities
Important Events for Today

Indicator GDP q/y Fixed Asset Investment ytd/y NBS Press Conference Industrial Production y/y Retail Sales m/m Prelim UoM Consumer Sentiment

Country China China China US UK US

Time (IST) 7:30 am 7:30 am 7:30 am 7:30 am 3:00 pm 8:25 pm

Actual 7.9% 20.6% 10.3% -

Forecast 7.8% 20.7% 10.2% 0.2% 75.1

Previous 7.4% 20.7% 10.1% 0.0% 72.9

Impact High Medium Medium Medium High High

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