Commodities Daily Report

Monday| January 28, 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

Monday| January 28, 2013

International Commodities
Overview
US New Home Sales declined to 369 K levels in month of December. German Ifo Business Climate grew to 104.2 levels in January 2013. Belgium NBB Business Climate declined to -13.2 levels in January. UK Prelim GDP q/q fell -0.3 percent in the fourth quarter of 2012

Market Highlights (% change)

Last INR/$ (Spot) 53.79 Prev day -0.2

as on 25 January, 2013 w-o-w -0.1 m-o-m 2.1 y-o-y -7.0

Asia markets are trading on a mixed note as Japans corporate index declined less than forecast along with rise in Chinese industrial profits. US New Home Sales declined by 29,000 to 369,000 in December from earlier rise of 398,000 in November. US Dollar Index (DX) declined by 0.4 percent in the last week. The currency depreciated 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, US House of Representatives passed a Republican plan to allow the federal government to keep borrowing money till mid-May along with favorable economic data like decline in unemployment claims also added downside pressure on the DX. Apart from that, US equities traded on a positive note which acted as a negative factor for the DX. The currency touched a weekly low of 79.75 and closed at 79.82 on Friday. On a weekly basis, Indian Rupee appreciated marginally by 0.1 percent. The currency appreciated as a result of central bank allowing exporters to access the foreign exchange market without having to first use funds in their foreign currency accounts and reversing the restriction which was imposed earlier. Additionally, Indian Finance Minister P Chidambaram made a statement in the last week that he will push through further reforms in the budget session which also supported an upside in the currency. Apart from that, upbeat domestic equities coupled with weakness in the DX also acted as a positive factor for the currency. The Indian Rupee touched a weekly high of 53.37 and closed at 53.79 against dollar on Friday. For the month of January 2013, FII inflows totaled at Rs 17,298.70 crores th ($3,173.67 million) as on 24 January 2013. Year to date basis, net capital th inflows stood at Rs.17,298.60 crores ($3,173.70 million) till 24 January 2013.

$/Euro (Spot)

1.346

0.6

1.1

2.1

2.7

Dollar Index NIFTY

79.82

-0.2

-0.4

0.1

0.1

6074.7

0.9

0.2

3.7

17.8

SENSEX

20103.5

0.9

0.3

4.4

17.7

DJIA

13896.0

0.5

1.8

5.8

8.9

S&P

1496.0

0.49

0.5

1.1

13.44

Source: Reuters

The Euro appreciated by more than 1 percent in the last week. The currency appreciated as a result of better economic data like rise in manufacturing and services PMI, increase in German Ifo Business Climate which rose by 1.8 points along with upbeat global market sentiments. Additionally, weakness in the DX also supported an upside in the currency. German Ifo Business Climate rose to 104.2-mark in January as against a rise of 102.4-level in December. The Euro touched a weekly high of 1.3479 and closed at 1.346 against dollar on Friday.

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Commodities Daily Report

Monday| January 28, 2013

International Commodities
Bullion Gold
Spot gold prices declined 1.5 percent week on week. Prices witnessed selling pressure on the back of liquidation by the market participants observing signs of global recovery which led to lower appetite towards the safe haven demand. Further, favorable data from the US also pushed prices lower. However, weakness in the DX cushioned fall in the gold prices. Postponement of debt ceiling issue by the US law makers till May 19, 2013 along with positive sentiments created after European Central Bank said that banks in the region might be able to re-pay more of its emergency three year loans in the coming week. This reduced safe haven buying of the yellow metal. Thus, the optimism that the Euro zone debt crisis is gradually being curtailed supported positive sentiments. The yellow metal touched a weekly low of $1,655.39/oz and closed at $ 1658.31 per ounce on Friday. On the MCX, Gold February contract ended 0.9 percent lower tracing weakness in the spot gold prices along with appreciation in the rupee and closed at Rs. 30,331/10 gms on Friday after touching a weekly low of Rs. 30,258/ 10gm. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot -Mumbai) Gold (LBMA-PM Fix) Comex Gold (Feb13) MCX Gold (Feb13) Unit $/oz Rs/10 gms $/oz 1656.4 $/oz Rs /10 gms 30331.0 -0.4 -0.9 -1.7 #N/A -0.8 -1.8 -0.1 -2.6 #N/A 1660.0 #N/A -0.7 #N/A -1.7 #N/A #N/A #N/A 0.6 Last 1658.3 Prev day -0.5 as on 25 January, 2013 WoW -1.5 MoM 0.1 YoY -3.1

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz 59120.0 Rs/1 kg $/oz $/ oz Rs / kg 58250.0 -1.2 3156.0 3118.0 -0.9 -1.6 -0.5 Last 31.1 Prev day -1.5

as on 25 January, 2013 WoW -2.2 -0.2 MoM 4.2 1.7 YoY -6.4 8.4

Silver
Spot silver fell 2.2 percent week on week. Silver prices traced sharp fall in the gold prices and erased earlier gains. Silver prices remained firm in the early part of the week due to firmness in the industrial metals along with weakness in the DX. Downward revision of global growth by the International Monetary Fund to 3.5 percent from 3.6 percent forecasted in the month of October 2012 also pushed prices of silver downside. The white metal touched a weekly low of $ 31.09/oz and closed at $ 31.14 per oz on Friday. In the Indian markets, MCX silver prices fell 1.9 percent and closed at Rs. 58,250/kg on Friday and touched a weekly low of Rs. 59,436/ kg. Fall in the spot silver prices along with appreciation in the Indian rupee exerted downside pressure on silver prices on MCX.

-0.8 -2.3

4.5 4.5

-0.3 -5.8

-2.0

0.9

#N/A

Source: Reuters

Technical Chart Spot Gold

Outlook
From the intra-day perspective, we expect precious metals to trade with a bearish note due to favorable data from the major nations indicating growth in the regions and thereby reducing the safe haven buying of the yellow metal. However, weakness in the DX might cushion fall in the prices of precious metals. Appreciation in the rupee is likely to exert downside pressure on the precious metals. Technical Outlook
Unit Spot Gold MCX Gold Feb13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for January 28, 2013 Support 1651/1646 30200/30120 31.0/30.75 57900/57500 Resistance 1663/1668 30420/30510 31.35/31.55 58550/58900

Source: Telequote

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Commodities Daily Report

Monday| January 28, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased 0.3 percent week on week due to favorable data from the major consuming nations which raised hopes that demand from the major consuming nations might increase. Additionally, weakness in the DX also supported an upside in the oil prices. However, downward revision of the global growth forecast of by the International Monetary Fund to 3.5 percent from 3.6 percent earlier forecasted in the month of October 2012 restricted gains in the crude oil prices. Crude oil prices touched a weekly high of $96.92/bbl and closed at $95.88/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.8 percent and closed at Rs. 5,194/bbl after touching a weekly high of Rs.5,212/bbl on Friday. However, appreciation in the Indian Rupee cushioned capped gains in the crude oil 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 113.3 $/bbl 5194.0 Rs/bbl
Source: Reuters

as on 25 January, 2013 WoW -0.5 1.9 0.3 7.8 4.0 8.2 MoM -4.1 5.0 -3.5 YoY

Last 95.2 114.6 95.9

Prev. day -0.2 -0.6 -0.1

0.0

1.2

4.1

3.2

0.3

0.8

5.8

#N/A

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Jan 13)

as on 25 January, 2013

Unit $/mmbtu Rs/ mmbtu

Last 3.444 186.5

Prev. day -0.06 -0.37

WoW -3.42 -2.56

MoM 2.93 0.87

YoY 26.20 38.97

Source: Reuters

Natural Gas
Natural gas prices ended 3.42 percent lower week on week on the back of break in the frigid cold weather which reduced the demand for this fuel thereby exerting a downside pressure on the prices. However, weakness in the DX cushioned fall in the natural gas prices. In the domestic market prices traced weakness in the international prices coupled with appreciation in the rupee and ended 2.56 percent down week on week. Prices touched a weekly low of 3.441mmbtu and closed at 3.444 mmbtu on Friday. In the domestic markets prices touched a weekly low of Rs.184.3 per mmbtu and closed at 186.5 per mmbtu on Friday. Outlook In the intra-day, we expect crude oil prices to trade higher due to hopes of recovery in the major nations along with weakness in the DX. Recovery in the nations might increase the demand for the oil. In the domestic market, appreciation in the rupee is expected to cap gains in the crude oil prices on MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude Jan 13 $/bbl Rs/bbl valid for January 28, 2013 Support 95.40/94.60 5160/5120 Resistance 96.70/97.30 5230/5260

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Monday| January 28, 2013

International Commodities
Base Metals
Base metal prices traded on a mixed note with prices of copper and nickel trading in the negative zone while lead, zinc and aluminium witnessing gains in the last week. Favourable data from the China and Euro regions raised hopes of increase in the demand for the base metals. Weakness in the DX also acted as a supportive factor for the firmness in the base metals. However, sharp gains were capped as the IMF downward revised the global growth forecast for 2013 to 3.5 percent. 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 (3 month) MCX Lead (Jan13) LME Zinc (3 month) MCX Zinc (Jan13)
Source: Reuters

as on 25 January, 2013 WoW

-0.6

Last
8042.0

Prev. day
-0.4

MoM
2.9

YoY
-5.1

$/tonne

Rs/kg

436.6

-0.3

-0.4

0.1

3.2

$/tonne

2052.0

-0.9

0.1

-1.3

-9.2

Copper
Copper prices declined 0.6 percent in the last week. Dull appetite by the Chinese buyers due to the ongoing Lunar New Year period along with rise in the output at Chiles Escondida, the largest copper mine jumped 31 percent in the fourth quarter of 2012 weighed on the prices. However, favourable data from the major consuming nation, weakness in the DX, decline in the LME inventories week on week cushioned fall in the copper prices. LME Copper inventories decreased 0.8 percent during last week and stood at 342,900 tonnes on Friday as against 345,525 tonnes on 18th January 2013. Copper inventories at warehouse monitored by the Shanghai Futures Exchange declined by 1.7 percent to 2,05,120 tn in the w/e 25th January, 2013. Copper prices on LME touched a weekly low of $8,010 per tonne and closed at $8,042 per tonne on Friday. In the domestic markets, MCX copper fell 0.14 percent and closed at Rs. 436.6 per kg on Friday. Weakness in the international copper prices along with appreciation in the rupee led prices to remain in the negative territory in the last week Outlook In the intra-day we expect copper prices to trade with upward bias due to favorable data from the China along with hopes of recovery in the major nations which might increase the demand for the metal. Weakness in the DX is also expected to support an upside in the copper prices. In the domestic market, appreciation in the rupee is expected to exert downside pressure on base metals on MCX. 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 28, 2013 Support 433/431 110.5/109.8 126.4/125.8 108/107.3 927/920 Resistance 439/442 112/112.8 128/128.8 109.5/110.4 940/947

Rs /kg

108.9

-0.7

0.0

-3.0

-2.0

$/tonne

17368.0

0.2

-1.1

0.3

-17.9

Rs /kg

933.2

0.2

-1.1

-1.8

-10.7

$/tonne

2366.8

-0.9

2.6

2.3

4.0

Rs /kg

127.1

-0.8

2.7

0.5

13.0

$/tonne

2080.0

-0.2

2.1

0.4

-4.6

Rs /kg

111.3

0.0

2.0

-1.0

3.3

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 25th January
342900 5156975 150216 1211100 293800

24th January
344850 5164150 149718 1213700 293875

Actual Change
-1950 -7175 498 -2600 -75

(%) Change
-0.57 -0.14 0.33 -0.21 -0.03 Source: Reuters

Technical Chart MCX Copper

Source: Telequote

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Commodities Daily Report

Monday| January 28, 2013

International Commodities
Important Events for Today

Indicator M3 Money Supply y/y Core Durable Goods Orders m/m Durable Goods Orders m/m Pending Home Sales m/m

Country EU US US US

Time (IST) 2:30 pm 7:00 pm 7:00 pm 8:30 pm

Actual -

Forecast 3.9% 0.8% 1.8% 0.5%

Previous 3.8% 1.6% 0.8% 1.7%

Impact Medium High Medium High

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