Commodities Daily Report

Friday| August 31, 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

Friday| August 31, 2012

International Commodities
Overview
US Unemployment Claims increased to 374,000 for w/e 24th August. German Unemployment Change remained same at 9,000 in August. US Personal Spending increased by 0.4 percent in the last month. LME Copper inventories declined by 1.6 percent in yesterdays trade. US Natural Gas inventories gained by 66 bcf for w/e 24 Aug - EIA.
th

Market Highlights (% change)

Last INR/$ (Spot) 55.63 Prev day 0.1

as on 30 August, 2012

w-o-w -0.7

m-o-m 0.4

y-o-y -17.7

Asian markets are trading on a negative note on account of rise in the risk aversion amongst market participants due to unfavorable Industrial Production data from Japan and South Korea thus showing signs of further slowdown in the global economies. Also renewed worries of the Euro zone area is adding to the negative sentiments. US Unemployment Claims increased by 2,000 to 374,000 for the week ending on 24th August from previous rise of 372,000 in prior week. Personal Spending increased 0.4 percent in the last month. Personal Income increased at slow pace of 0.3 percent in the last month as against a rise of 0.5 percent in June. The US Dollar Index (DX) gained 0.2 percent due to weak global market sentiments arising from renewed concerns of the Euro zone area along with unfavorable data from the US economy. This led to rise in the risk aversion and thereby increase in the demand for the low yielding currency that is US Dollar Index (DX). US equities declined on the back of negative economic data of the nation and renewed concerns of the Euro zone along with slow down in the major Asian economies. The currency touched a high of 81.78 and closed at 81.71 on Thursday. The Indian Rupee swung between gains and losses in the yesterdays trading session. The currency traded on a flat note and depreciated marginally on Thursday. The Indian Rupee depreciated taking cues from month end dollar demand from oil and its importers. However, sharp downside in the currency was cushioned as a result of upbeat sentiments in domestic equities. It touched an intra-day low of 55.75 in yesterdays trading session and closed at 55.633 on Thursday. For the current month, FII inflows totaled at Rs 8,302.80 crores till 30th August 2012. While year to date basis, net capital inflows stood at Rs 60,568.60 crores till 30th August 2012. GfK Consumer Confidence remained unchanged at -29-level in August. UKs Net Lending to Individuals increased by 0.9 billion Pounds in July as against a previous decline of 0.1 billion Pounds a month ago. M4 Money Supply increased by 0.5 percent in last month from previous decline of 1.6 percent in June. Mortgage Approvals increased by 3,000 to 47,000 in July as compared to previous rise of 44,000 in June.

$/Euro (Spot)

1.2504

-0.2

-0.5

2.7

-13.0

Dollar Index

81.71

0.2

0.4

-2.1

10.2

NIFTY

5315.1

0.5

-1.9

1.7

6.3

SENSEX

17541.6

0.3

-1.7

1.8

5.2

DJIA

13000.7

-0.8

-0.4

0.9

11.9

S&P

1399.48

-0.8

-0.2

1.0

15.4

Source: Reuters

The Euro declined 0.2 percent after the statement by the Spanish Prime Minister Mariano Rajoy that they would delay in seeking the bailout until the conditions are clear. Additionally, strength in the DX also exerted downside pressure on the currency. It touched a low of 1.2486 and closed at 1.2504 on Thursday. German Unemployment Change remained unchanged at 9,000 in last month. European Retail Raw Materials Price Index (RMPI) declined by 2 points to 44.4-mark in August as against a previous level of 46.4 in July. Japans Manufacturing Purchasing Managers' Index (PMI) declined marginally by 0.2 points to 47.7-mark in August as against a previous rise of 47.9-level in July. Household Spending increased b y 1.7 percent in July from previous rise of 1.6 percent a month ago. Tokyo Core Consumer Price Index (CPI) declined by 0.5 percent in current month as compared to decline of 0.6 percent in July. National Core CPI also declined by 0.3 percent in August with respect to decline of 0.2 percent in last month. Unemployment Rate remained unchanged at 4.3 percent in July. Prelim Industrial Production declined by 1.2 percent in July from rise of 0.4 percent a month earlier. www.angelcommodities.com

Commodities Daily Report

Friday| August 31, 2012

International Commodities
Bullion Gold
Spot gold prices swung between gains and losses and settled on a flat note as investors followed wait and watch stance awaiting decision on further stimulus measures to be taken in the annual meeting of the US Federal Reserve at Jackson Hole Wyoming today. Further, renewed debt worries of the Euro zone area along with strength in the DX exerted downside pressure on the gold prices. The yellow metal touched an intra-day low of $1652.40/oz and closed at $1655.5/oz in yesterdays trading session. On the MCX, Gold October contract settled on a flat note and closed at Rs.30,837/10gms after touching an intra-day low of Rs.30,756/10gms on Thursday. Depreciation in the Indian Rupee however cushioned sharp fall in the prices. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMAPM Fix) Comex (Dec12) MCX (Oct12) Unit $/oz Rs/10 gms $/oz $/oz Rs /10 gms Last 1655.5 30700.0 Prev day 0.0 -0.4 as on 30 August, 2012 WoW -0.9 0.4 MoM 4.1 2.9 YoY -9.2 12.2

1660.5 1653.5 30837.0

0.0 -0.4 0.0

-0.3 -1.0 0.1

4.0 4.2 4.0

-8.4 -9.6 13.4

Source: Reuters

Market Highlights - Silver (% change)

Silver Unit $/oz Rs/1 kg $/oz $/ oz Rs / kg Last 30.4 58540.0 3070.0 3036.7 56953.0 Prev day -0.9 -0.1 -0.1 -1.5 -1.1

as on 30 August, 2012 WoW -0.4 1.3 1.3 -0.3 0.3 MoM 12.2 9.1 12.0 12.5 7.7 YoY -26.7 -7.7 -25.8 -27.2 -8.4

Silver
Taking cues from fall in base metals pack along with mixed movement in the gold prices Spot silver prices declined by 0.9 percent yesterday. Additionally, a stronger DX also added downside pressure on silver prices. The white metal touched an intra-day low of $30.19/oz and closed at $30.40/oz on Thursday. In the Indian markets, prices declined by 1.1 percent and closed at Rs.56,953/kg after touching an intra-day low of Rs.56,731/kg in yesterdays trading session.

Silver (Spot) Silver (Spot -Mumbai) Silver (LBMA) Comex (Sep12) MCX (Sep12)

Source: Reuters

Technical Chart Spot Gold

Outlook
In todays session we expect precious metals to trade rangebound with bearish tone on the back of weak global markets along with strength in the DX. Also, market participants are awaiting decision by the US Federal Reserve on further stimulus measures to be announced in the later part of the evening today. Technical Outlook
Unit Spot Gold MCX Gold Oct12 Spot Silver MCX Silver Sep12 $/oz Rs/10 gms $/oz Rs/kg valid for August 31, 2012 Support 1650/1646 30770/30680 30.15/29.95 56600/56200 Resistance 1656/1660 30880/30950 30.40/30.60 57100/57400
Source: Telequote

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Commodities Daily Report

Friday| August 31, 2012

International Commodities
Energy Crude Oil
Nymex crude oil prices declined around 0.9 percent yesterday taking cues from resume of refineries operation in Gulf of Mexico after Tropical Storm Isaac has passed away. Additionally, strength in the DX has also added downside pressure on the crude oil prices. Crude prices touched an intra-day low of $93.95/bbl and closed at $94.60/bbl in yesterdays trading session. On the domestic bourses, prices declined by 0.7 percent and closed at Rs.5,276/bbl after touching an intra-day low of Rs.5257/bbl on Thursday. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (Aug12) ICE Brent Crude (Aug12) MCX Crude (Aug12) Unit $/bbl $/bbl Last 94.6 113.0 Prev. day -1.0 -0.2 WoW -1.3 -4.4 as on 30 August, 2012 MoM 8.4 4.4 YoY 6.6 -4.1

$/bbl

94.6

-0.9

-1.7

8.6

6.5

$/bbl

112.7

0.1

-2.1

6.4

-1.9

Rs/bbl

5276.0

-0.7

-0.8

6.8

29.3

Natural Gas
Nymex natural gas prices gained by 2.5 percent yesterday on account of month end contract expiring. However, further upside in the prices was restricted on the back of more than expected increase in US natural gas inventories coupled with strength in the DX. Natural gas prices touched an intra-day high of $2.767/mmbtu and closed at $2.76/mmbtu on Thursday. In the Indian markets prices gained by 2.4 percent and closed at Rs.154/mmbtu after touching an intra-day high of Rs.155/mmbtu in yesterdays trading session. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory has increased more than the expectations by 66 billion cubic feet (bcf) which stood at 3.374 trillion cubic feet for the week ending on 24th August 2012. Outlook We expect crude oil prices to trade with bearish tone taking cues from weak global market sentiments along with strength in the DX. Additionally, operations in the refineries to resume shortly after the Hurricane Isaac passed over from the Gulf of Mexico region adding further downside pressure to the crude oil prices. Technical Outlook
Unit valid for August 31, 2012 Support Resistance

Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (Aug12) Unit $/mmbtu Rs/ mmbtu Last 2.76 154

(% change)

as on 30 August, 2012

Prev. day 2.56 2.39

WoW -2.16 -1.28

MoM -14.23 -13.34

YoY -29.43 -14.30

Source: Reuters

Technical Chart Nymex Crude Oil

Source: Telequote

Technical Chart Nymex Natural Gas

NYMEX Crude Oil

$/bbl

93.98/93.45

95.24/95.96

MCX Crude Aug12

Rs/bbl

5240/5210

5310/5350

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Commodities Daily Report

Friday| August 31, 2012

International Commodities
Market Highlights - Base Metals (% change)
Unit Last 7570.0 as on 30 August, 2012 WoW -1.0 MoM 3.8 YoY -18.2

Base Metals
The base metals pack traded on negative note yesterday on the back of rise in risk aversion in the global markets along with strength in the DX. However, sharp downside in the prices was cushioned on account of decline in LME inventories apart from Nickel. In the Indian markets depreciation in the Rupee cushioned sharp fall in the prices. Copper Copper, the leader of the base metals complex declined by 0.1 percent yesterday on the back of weak global market sentiments coupled with strength in the DX. However, sharp fall in the prices was restricted taking cues from sharp decline in LME copper inventories by 1.6 percent which stood at 230,175 tonnes. The red metal touched an intra-day low of $7,536/tonne and closed at $7,570.0/tonne in yesterdays trading session. On the domestic front, prices gained by 0.1 percent due to depreciation in the Indian rupee and closed at Rs.423.20/kg after touching an intra-day high of Rs.427.5/kg on Thursday. Outlook From the intra-day perspective, we expect base metal prices to trade bearish on account of negative global market sentiments along with strength in the DX. Further slowdown in the Asian economies might also act as a bearish factor for the base metal prices. In the Indian markets depreciation in the Rupee might cushion sharp fall in the base metals prices on the MCX. Technical Outlook
Unit MCX Copper Aug12 MCX Zinc Aug12 MCX Lead Aug12 MCX Aluminum Aug12 MCX Nickel Aug12 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for August 31, 2012 Support 421.0/418.0 101.40/100.80 108.0/107.40 103.0/102.50 886/878 Resistance 424.50/427.0 102.60/103.10 109.0/109.40 104.0/104.50 898/905

Prev. day -0.1

LME Copper (3 month) MCX Copper (Aug12) LME Aluminum (3 month) MCX Aluminum (Aug12) LME Nickel (3 month) MCX Nickel (Aug12) LME Lead (3 month) MCX Lead (Aug12) LME Zinc (3 month) MCX Zinc (Aug12)

$/tonne

Rs/kg

423.2

0.1

-0.1

2.8

-0.9

$/tonne

1879.3

-0.6

-0.8

2.3

-24.0

Rs /kg

103.5

-0.6

0.1

0.1

-8.1

$/tonne

16015.0

-1.7

-2.0

4.6

-28.2

Rs /kg

891.4

-1.4

-0.9

2.4

-12.9

$/tonne

1947.8

-0.8

0.2

5.0

-24.6

Rs /kg

108.6

-0.6

1.6

3.4

-8.5

$/tonne

1839.0

-0.8

-0.4

2.1

-19.7

Rs /kg

101.2

-0.9

-0.1

-0.8

-3.5

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 30 August 230,175 4,878,950 118,662 953,650 311,475
th

29 August 234,025 4,889,650 118,164 955,225 312,575

th

Actual Change -3,850 -10,700 498 -1,575 -1,100

(%) Change -1.6 -0.2 0.4 -0.2 -0.4

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| August 31, 2012

International Commodities
Important Events for Today

Indicator GfK Consumer Confidence Household Spending y/y Tokyo Core CPI y/y Prelim Industrial Production m/m German Retail Sales m/m Nationwide HPI m/m CPI Flash Estimate y/y Unemployment Rate Chicago PMI Revised UoM Consumer Sentiment Fed Chairman Bernanke Speaks Factory Orders m/m Jackson Hole Symposium

Country UK Japan Japan Japan Euro UK Euro Euro US US US US All

Time (IST) 4:31am 5:00am 5:00am 5:20am 11:30am 11:30am 2:30pm 2:30pm 7:15pm 7:25pm 7:30pm 7:30pm Day 2

Actual -29 1.7% -0.5% -1.2% -

Forecast -26 1.3% -0.6% 1.8% 0.2% 0.2% 2.5% 11.3% 53.6 73.7 1.1% -

Previous -29 1.6% -0.6% 0.4% -0.1% -0.7% 2.4% 11.2% 53.7 73.6 -0.5% -

Impact Medium Medium Medium Medium Medium Medium Medium Medium Medium Medium High Medium Medium

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