Commodities Daily Report

Wednesday| April 3, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn :6130 Saif Mukadam – Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report
Wednesday| April 3, 2013

International Commodities
Overview
US Factory Orders increased by 3 percent in the month of February. Spanish Manufacturing PMI declined to 44.2-mark in the last month. UK’s Manufacturing PMI gained to 48.3-mark in the month of March. European Unemployment Rate unchanged at 12 percent in February. Asian markets are trading on a positive note on the back of better than forecasted US factory orders data coupled with ease in the Euro Zone debt crisis as Cyprus government completed the talks for aid with European Union, European Central Bank (ECB) and International Monetary Fund (IMF). US Factory Orders increased by 3 percent in February as against a decline of 1 percent a month ago. Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism increased by 4 points to 46.2-mark in March from 42.2-level in the month of February. China’s Non-Manufacturing Purchasing Managers' Index (PMI) increased by 1.1 points to 55.6-mark in March as against a rise of 54.5-level in February. The US Dollar Index (DX) gained by 0.2 percent yesterday on the back of rise in risk aversion in the global market sentiments in the early part of the trade which led to increase in demand for the low yielding currency. However, sharp upside in the currency was capped on account of better than expected US factory orders data. Further, positive US market sentiments also restricted upside movement in the DX. The currency touched an intra-day high of 83.13 and closed at 83.09 on Tuesday. The Indian Rupee depreciated by 0.5 percent in the yesterday’s trading session. The currency depreciated on account of record high current account deficit data coupled with weak global market sentiments in the early part of the trade. The country’s account gap raised to $32.63 billion in Q4 of 2012 as against a $22.3 billion in Q3 of 2012. However, sharp downside in the currency was cushioned as a result of upbeat domestic market sentiments in the later part of the trade along with weakness in the DX. The currency touched an intra-day low of 54.45 and closed at 54.42 against dollar on Tuesday. For the month of April 2013, FII inflows totaled at Rs.1,262.0 crores ($232.03 million) as on 2nd April 2013. Year to date basis, net capital nd inflows stood at Rs.56,884.40 crores ($10,542.10 million) till 2 April 2013. UK’s Manufacturing Purchasing Managers' Index (PMI) increased by 0.4 points to 48.3-mark in March as against a rise of 47.9-level in February. Mortgage Approvals was at 52,000 in February with respect to 54,000 a month earlier.

Market Highlights (% change)
Last INR/$ (Spot) 54.42 Prev day -0.5

as on 2 April, 2013 w-o-w 0.1 m-o-m 0.9 y-o-y -6.7

$/Euro (Spot)

1.2818

-0.2

-0.3

-1.8

-3.8

Dollar Index NIFTY

83.09

0.2

0.1

1.0

4.6

5748.1

0.8

1.9

-0.6

8.5

SENSEX

19041.0

0.9

1.8

-0.5

4.1

DJIA

14662.0

0.6

1.5

2.9

11.0

S&P

1570.3

0.5

0.4

3.4

10.7

Source: Reuters

The Euro depreciated by 0.2 percent in yesterday’s trade on the back of unfavorable economic data from Europe coupled with strength in DX. However, sharp depreciation in the currency was cushioned as the International Monetary Fund, the European Central Bank and the European Union granted 2 extra years till 2018 to Cyprus to apply measures associated to its bailout. Spanish Manufacturing Purchasing Managers' Index (PMI) declined by 2.6 points to 44.2-mark in March from previous rise of 46.8-level in February. Italian Manufacturing PMI fell by 1.3 points to 44.5-level in March as compared to rise of 45.8mark a month ago. European Final Manufacturing PMI rose marginally by 0.2 points to 46.8-mark in last month with respect to 46.6-level in prior month. European Unemployment Rate remained unchanged at 12 percent for the month of February. The Euro touched an intra-day low of 1.2808 and closed at 1.2818 against dollar on Tuesday.

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Commodities Daily Report
Wednesday| April 3, 2013

International Commodities
Bullion Gold
Spot gold prices decreased around 1.4 percent in the yesterday’s trading session on the back of strong US dollar index coupled with optimistic global market sentiments which affected safe haven demand from investors. Further, reduce in worries over Cyprus bailout, kept investors away from safe haven. The yellow metal touched an intra-day low of $1573.39/oz and closed at $1575.2/oz in yesterday’s trading session. In the Indian markets, prices ended on negative note in the yesterday trading session tracking spot gold prices and closed at Rs.29149/10 gms after touching an intra-day high of Rs. 29120/10 gms on Tuesday. Depreciation in the Indian rupee prevented sharp decline in prices. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1575.2 Prev. day -1.4 as on 2 April, 2013 WoW -1.5 MoM 0.0 YoY -6.1

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June’13) MCX Gold (June’13)

Rs/10 gms $/oz

29525.0

-0.2

0.1

-0.3

5.5

1583.5

-0.9

-0.9

0.2

-5.6

$/oz

1575.1

-1.6

-1.3

0.0

-5.6

Rs /10 gms

29149.0

-1.1

-1.2

-1.4

4.5

Source: Reuters

Silver
Taking cues from fall in spot gold prices coupled with decline in base metal packs, spot silver prices decreased by 2.9 percent on Tuesday. Further, strength in DX coupled with weak economic data from Europe added downside pressure. However, optimistic global market sentiments cushioned sharp downside in prices. The white metal prices touched an intra-day low of $27.16 /oz and closed at $27.2/oz in yesterday’s trade. On the domestic front, prices declined by 2.4 percent taking cues from spot silver and closed at Rs. 51473/kg after touching an intraday low of Rs. 51254/kg on Tuesday.

Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May’13) MCX Silver (May’13) Unit $/oz Rs/1 kg Last 27.2 53362.0 Prev day -2.9 -0.6

as on 2 April, 2013 WoW -5.3 -2.6 MoM -5.1 -4.0 YoY -15.7 -5.9

$/oz $/ oz

2796.0 2721.7

-2.4 0.0

-3.0 -5.0

-3.4 -5.4

-13.8 -17.7

Rs / kg

51473.0

-2.4

-4.8

-4.3

-10.6

Source: Reuters

Technical Chart – Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a negative note as the worries over Cyprus has decreased as the International Monetary Fund, the European Central Bank and the European Union granted 2 extra years till 2018 to the country to apply measures associated to its bailout leading to decline in demand for safe haven. Further, strength in DX may add downside pressure. In the Indian markets appreciation in the Indian rupee will exert downside pressure on the prices. Technical Outlook
Unit Spot Gold MCX Gold June’13 Spot Silver MCX Silver May’13 $/oz Rs/10 gms $/oz Rs/kg valid for April 3, 2013 Support 1565/1560 29500/29400 26.95/26.75 51100/50700 Resistance 1576/1581 29700/29800 27.30/27.50 51800/52200
Source: Telequote

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Commodities Daily Report
Wednesday| April 3, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 0.1 percent yesterday taking cues from better than forecasted US factory orders which led to expectations of rise in demand for the fuel. However, sharp upside in the prices was capped on account of more than estimated rise in US crude oil inventories. Further, strength in the DX also prevented sharp positive movement in the prices. Crude oil prices touched an intra-day high of $97.44/bbl and closed at $97.19/bbl in yesterday’s trading session. On the domestic bourses, prices increased by 0.4 percent on account of depreciation in the Indian Rupee and closed at Rs5304./bbl after touching an intra-day high of Rs.5311/bbl on Tuesday. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories increased more than expected by 4.7 million barrels to 385.14 million barrels for the week ending on 29th March 2013. Gasoline inventories fell by 1.9 million barrels to 220.35 million barrels and whereas distillate inventories dropped by 5.0 million barrels to 115.38 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 2.2 million barrels for the week ending on 29 March 2013. Gasoline stocks are expected to fall by 0.8 million barrels whereas distillate inventories are expected to drop by 1.1 million barrels for the same period. Outlook From the intra-day perspective, we expect crude oil prices to trade lower on the back of expectations of rise in US crude oil inventories coupled with strength in the DX. Additionally, more than forecasted rise in the US crude oil inventories from API in yesterday’s trading session will also add downside pressure. However, sharp downside in the prices will be cushioned on account of better US factory orders in yesterday’s trade along with upbeat global market sentiments. Appreciation in the Indian Rupee will add more downside pressure in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude April ’13 $/bbl Rs/bbl valid for April 3, 2013 Support 96.10/95.60 5260/5230 Resistance 97.40/98.20 5330/5370
Source: Telequote

Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May ’13) ICE Brent Crude (May’13) MCX Crude (April ’13) Unit $/bbl $/bbl $/bbl Last 97.2 110.8 97.2 Prev. day 0.1 0.8 0.1 WoW 1.3 2.4 2.5

as on 2 April, 2013 MoM 7.0 -0.7 7.0 YoY -7.6 -11.5 -5.7

$/bbl

110.7

-0.4

1.2

-0.8

-11.8

Rs/bbl

5304.0

0.4

1.3

6.6

-0.6
Source: Reuters

Market Highlights - Natural Gas
Natural Gas (NG) Nymex NG MCX NG (April ’13) Unit $/mmbtu Rs/ mmbtu Last 3.96 216.7

(% change)

as on 2 April, 2013

Prev. day -1.7 -1.5

WoW -0.40 0.42

MoM 14.55 12.75

YoY 84.53 96.82

Source: Reuters

Technical Chart – NYMEX Crude Oil

Source: Telequote

Technical Chart – NYMEX Natural Gas

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Commodities Daily Report
Wednesday| April 3, 2013

International Commodities
Base Metals
The base metals pack traded on a negative note on the back of unfavourable economic data from Europe which increased the worries among the investors over decline in demand for base metals. Further, manufacturing data from United Kingdom came lower than the expectation fueling fears over the economic growth of the country coupled with strength in DX. However, optimistic global market sentiments coupled with decrease in worries over Cyprus bailout cushioned sharp decline in prices. Positive US factory orders also prevented sharp downside in prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April’13) LME Aluminum (3 month) MCX Aluminum (April’13) LME Nickel (3 month) MCX Nickel (April’13) LME Lead (3 month) MCX Lead (April’13) LME Zinc (3 month) MCX Zinc (April’13)
Source: Reuters

as on 2 April, 2013 WoW -2.1 MoM -4.6 YoY -13.2

Last 7483.3

Prev. day -0.7

$/tonne

Rs/kg

408.6

0.1

-2.2

-5.2

-6.9

$/tonne

1886.8

-0.9

-1.4

-4.6

-11.4

Rs /kg

102.5

-1.5

-0.1

-4.7

-5.0

Copper
Copper, the leader of the base metal pack declined by 0.7 percent in yesterday’s trade on the back of unfavourable economic data from Europe coupled with strength in DX. Further, sharp rise in LME Copper inventories by 0.2 percent which stood at 571,125 tonnes kept the prices under pressure. Additionally, Weak economic data from UK fuelling worries over country’s growth exerted downside pressure. However, decrease in worries over Cyprus bailout coupled with optimistic global market sentiments prevented sharp downside in prices. The red metal touched an intra-day low of $7439/tonne and closed at $7483.3/tonne yesterday’s trading session. On the domestic front, prices ended on positive note and closed at Rs. 408.6/kg on Tuesday after touching an intra-day low of Rs 406.1/kg. Depreciation in the Indian rupee supported prices to trade in green. . Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of weak economic data from Europe and UK in yesterday’s trading session increasing worries over economic growth. Further, strength in DX coupled with expectation of decline in ISM non-manufacturing data from US may add downside pressure. However optimistic global market sentiments coupled with expectation of positive ADP non-farm employment change data may cushion sharp decline in prices. In the Indian markets, appreciation in the Indian rupee will exert downside pressure on the prices. Technical Outlook
Unit MCX Copper April’13 MCX Zinc April ’13 MCX Lead April ’13 MCX Aluminum April’13 MCX Nickel April ’13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for April 3, 2013 Support 405/402 100/99.2 111.2/110 101.8/101 888/880 Resistance 411/413 101.5/102.5 113/114.8 103.2/104 904/912

$/tonne

16380.0

-1.8

-2.5

-1.8

-10.2

Rs /kg

895.9

-1.8

-1.9

-2.1

-3.9

$/tonne

2056.0

-2.4

-3.8

-7.8

-0.1

Rs /kg

112.2

-2.5

-2.7

-8.4

6.6

$/tonne

1859.0

-2.0

-2.8

-7.6

-7.4

Rs /kg

100.8

-2.2

-1.8

-8.3

-1.7

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 2 April 571,125 5,228,425 166,716 1,171,100 262,025
nd

28 March 569,775 5,237,400 165,420 1,175,525 262,725

th

Actual Change 1,350 -8,975 1,296 -4,425 -700

(%) Change 0.2 -0.2 0.8 -0.4 -0.3
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Wednesday| April 3, 2013

International Commodities
Important Events for Today
Indicator FOMC Member Evans Speaks Halifax HPI m/m Construction PMI BOE Credit Conditions Survey CPI Flash Estimate y/y ADP Non-Farm Employment Change ISM Non-Manufacturing PMI Crude Oil Inventories Country US UK UK UK Europe US US US Time (IST) 5:00am 3 -4
rd th

Actual -

Forecast 0.2% 47.7 1.6% 203K 55.9 2.2M

Previous 0.5% 46.8 1.8% 198K 56.0 3.3M

Impact Medium Medium High Medium Medium High High Medium

2:00pm 2:00pm 2:30pm 5:45pm 7:30pm 8:00pm

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