Commodities Daily Report

Thursday| May 2, 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
Thursday| May 2, 2013

International Commodities
Overview
US ADP Non-Farm Employment Change fell to 119,000 in April. UK’s Manufacturing PMI increased to 49.8-mark in the prior month. US ISM Manufacturing PMI declined to 50.7-mark in the last month. China’s HSBC Final Manufacturing PMI declined to 50.4-mark in April Asian markets are trading lower today on the back of unfavorable economic data from US in yesterday’s trading session and decline in China’s manufacturing data indicating a slowdown in the global economic growth. US Automatic Data Processing, Inc. (ADP) Non-Farm Employment Change declined by 12,000 to 119,000 in April as against a rise of 131,000 in March. Final Manufacturing Purchasing Managers' Index (PMI) increased by 0.1 points to 52.1-mark in April from rise of 52-level in last month. The Institute for Supply Management (ISM) Manufacturing PMI declined by 0.6 points to 50.7-mark in April as compared to rise of 51.3-level a month ago. Construction Spending declined by 1.7 percent in March with respect to rise of 1.5 percent in prior month. ISM Manufacturing Prices fell by 4.5 points to 50-level in April when compared to rise of 54.5-mark a month earlier. The US Dollar Index (DX) declined by 0.3 percent in the yesterday’s trading session on the back of rise in risk appetite in the global market sentiments in the early part of the trade which led to decline in demand for the low yielding currency. However, sharp downside in the currency was cushioned as a result of unfavorable economic data from the US. Further, US equities traded on a negative note which also prevented sharp downside in the DX. The currency touched an intra-day low of 81.37 and closed at 81.52 on Wednesday. The Indian Rupee appreciated by 0.9 percent on Tuesday. The currency appreciated on account of cut in the tax on interest payments to foreigners on government and corporate debt from 20 percent to 5 percent. Additionally, expectations of cut in key rates by the central bank of the country in its monetary policy meeting on 3rd May also supported an upside in the currency. Further, upbeat global market sentiments coupled with weakness in the DX also acted as a positive factor for the Indian Rupee. The currency touched an intra-day high of 53.65 and closed at 53.68 against dollar on Tuesday. For the month of April 2013, FII inflows totaled at Rs.5,414.10 crores ($1,000.27 million) as on 30th April 2013. Year to date basis, net capital inflows stood at Rs.61,036.30 crores ($11,310.30 million) till 30th April 2013. China’s HSBC Final Manufacturing Purchasing Managers' Index (PMI) declined by 0.1 points to 50.4-mark in April as against a rise of 50.5-level in March. www.angelcommodities.com

Market Highlights (% change)
Last INR/$ (Spot)** 53.68 Prev day 0.9

as on 1 May, 2013 w-o-w 1.1 m-o-m 1.1 y-o-y -1.9

$/Euro (Spot)

1.3177

0.1

1.2

2.5

-0.4

Dollar Index NIFTY**

81.52

-0.3

-1.8

-1.6

2.6

5930.2

0.4

1.6

4.4

14.2

SENSEX**

19504.2

0.6

1.7

3.5

6.6

DJIA

14701.0

-0.9

0.2

0.6

10.7

S&P

1582.7

-0.9

0.2

1.3

12.6

Source: Reuters (** Indian markets were closed on the occasion of Maharashtra Day)

The Euro appreciated by 0.1 percent in yesterday’s trade on the back of weakness in DX. However, weak economic data from the US increased the worries over global economic growth which capped sharp gains in the currency. The Euro touched an intra-day high of 1.3242 and closed at 1.3177 against dollar on Wednesday. UK’s Nationwide House Price Index (HPI) declined by 0.1 percent in April. Manufacturing Purchasing Managers' Index (PMI) increased by 1.2 points to 49.8-mark in April as against a rise of 48.6-level in March. Japan’s Monetary Base increased by 23.1 perc ent in April as against a rise of 19.8 percent in March.

Commodities Daily Report
Thursday| May 2, 2013

International Commodities
Bullion Gold
Spot gold prices decreased by 1.3 percent in the yesterday’s trading session on the back of weak global market sentiments. Further, weak economic data from US added downside pressure. Additionally, Fed commented that it may raise or lower its monthly asset purchasing programme as economic condition advance kept the prices under pressure. SPDR gold trust holdings fell by 0.31 percent which acted as a negative factor for the prices. However weakness in DX prevented sharp fall in the prices. The yellow metal touched an intra-day low of $1439.74/oz and closed at $1456.7/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.26540/10 gms after touching an intra-day low of Rs. 26365/10 gms on Wednesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June’13) MCX Gold (June’13) Unit $/oz Rs/10 gms $/oz Last 1456.7 27100.0 Prev. day -1.3 0.4 as on 1 May, 2013 WoW 1.8 2.8 MoM -6.5 -7.4 YoY -12.2 -

1454.8

-1.0

1.8

-7.6

-12.6

$/oz

1446.3

-1.8

1.6

-6.8

-13.1

Rs /10 gms

26540.0

-1.4

0.6

-7.9

-8.9

Source: Reuters

Silver
Taking cues from decline in spot gold prices along with downside in the base metal packs, Spot silver prices decreased by 3.1 percent in the yesterday’s trading session. Further, weak global market sentiments coupled with unfavourable economic data from US and China added downside pressure. However, weakness in DX cushioned sharp downside in the currency. The white metal prices touched an intra-day low of $23.21 /oz and closed at $23.5/oz in yesterday’s trade. On the domestic front, prices declined by 2.6 percent taking cues from spot silver prices and closed at Rs. 43659/kg after touching an intraday low of Rs. 43172/kg on Wednesday.

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 23.5 45680.0 Prev day -3.1 -1.3

as on 1 May, 2013 WoW 1.9 1.2 MoM -12.6 -12.3 YoY -23.8 -19.8

$/oz $/ oz

2397.0 2330.5

-1.8 0.0

4.6 2.1

-11.8 -12.9

-22.1 -24.5

Rs / kg

43659.0

-2.6

1.8

-13.9

-21.1

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a negative note on the back of rise in risk aversion in the global market sentiments coupled with strength in DX. Further, weak economic data from US and china may add downside pressure. Additionally, expectation of interest rate cut by European Central Bank (ECB) may keep prices under pressure. However, expectation of favourable economic data from Euro zone and UK may cushion sharp decline in the prices. In the Indian market appreciation in the Indian rupee may add downside pressure. Technical Outlook
Unit Spot Gold MCX Gold June’13 Spot Silver MCX Silver May’13 $/oz Rs/10 gms $/oz Rs/kg valid for May 2, 2013 Support 1439/1427 26300/26090 23.30/23.05 43700/43300 Resistance 1458/1466 26650/26800 23.70/23.95 44400/44900

Technical Chart – Spot Gold

Source: Telequote

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Commodities Daily Report
Thursday| May 2, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 2.6 percent yesterday on the back of more than expected rise in the US crude oil inventories which are at highest level since 1982 and led to expectations of slowdown in the global economic growth. Further, US manufacturing data grew at a slower pace coupled with declined in payroll data which also exerted downside pressure on the crude prices. However, sharp downside in the prices was cushioned on account of weakness in the DX. Crude oil prices touched an intra-day low of $90.11/bbl and closed at $91/bbl in yesterday’s trading session. On the domestic bourses, prices declined by 2.8 percent and closed at Rs.4,872/bbl after touching an intra-day low of Rs.4841/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories increased more than expectations by 6.7 million barrels to 395.30 th million barrels for the week ending on 26 April 2013. Crude oil inventories are at the highest level in last 82 years. Gasoline stocks fell by 1.8 million barrels to 216.0 million barrels and whereas distillate stockpiles rose by 0.5 million barrels to 115.80 million barrels for the last week.
Natural Gas (NG) Nymex NG MCX NG (May ’13) Unit $/mmbtu Rs/ mmbtu Last 4.314 233.6 Prev. day -0.7 0.4 WoW 3.50 2.77 MoM 7.07 6.13 YoY 82.80 87.18
Source: Reuters

Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May ’13) ICE Brent Crude (May’13) MCX Crude (May ’13) Unit $/bbl $/bbl $/bbl Last 90.7 99.1 91.0 Prev. day -2.7 -3.5 -2.6 WoW -0.4 -2.7 -0.4

as on 1 May, 2013 MoM -6.5 -9.0 -2.4 YoY -14.5 -17.4 -14.3

$/bbl

100.0

-2.4

-1.7

-6.7

-16.5

Rs/bbl

4872.0

-2.8

-1.8

-6.3

-13.0
Source: Reuters

Market Highlights - Natural Gas (% change)

as on 1 May, 2013

Technical Chart – NYMEX Crude Oil

Natural Gas
EIA Inventories Forecast US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to increase by 27 billion cubic feet (bcf) for the week ending on 26th April 2013 Outlook From the intra-day perspective, we expect crude oil prices to trade lower on the back of crude oil inventories at the highest level in last 82 years which led to expectations of decline in demand for the crude oil. Further, rise in risk aversion in the global market sentiments, unfavorable economic data from the US and China along with strength in the DX will add downside pressure on the currency. However, sharp downside in the prices will be cushioned on account of forecast for favorable economic data from the Euro Zone. In the Indian markets, appreciation in the Rupee will exert downside pressure on the crude oil prices. Technical Outlook
Unit NYMEX Crude Oil MCX Crude May’13 $/bbl Rs/bbl valid for May 2, 2013 Support 89.90/88.60 4820/4750 Resistance 92.00/93.30 4930/5000
Source: Telequote Source: Telequote

Technical Chart – NYMEX Natural Gas

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Commodities Daily Report
Thursday| May 2, 2013

International Commodities
Base Metals
The base metals pack traded on a negative note on the back of weak global market sentiments. Further, decline in US ADP Nonfarm employment change and weak ISM manufacturing PMI data added downside pressure on the prices. Additionally, weak China’s Manufacturing PMI kept prices under pressure. However, weakness in DX along with favourable economic data from UK cushioned sharp downside in the prices. Apart from that, US Federal Reserve decided to continue with its bond purchase programme prevented sharp fall in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April’13) LME Aluminum (3 month) MCX Aluminum Rs /kg 97.2 -2.9 -4.8 -4.5 -12.4 $/tonne 1825.0 -2.4 -4.3 -2.5 -13.8 Rs/kg 368.0 -3.4 -2.8 -8.8 -17.8 $/tonne Last 6798.0 Prev. day -3.4 as on 1 May, 2013 WoW -2.9 MoM -13.4 YoY -19.4

Copper
Copper, the leader of the base metal pack decreased by 3.4 percent on the back of rise in risk aversion in the global market sentiments. Further, unfavourable economic data from US added downside pressure. Additionally, decline in China’s Manufacturing PMI acted as a negative factor. However, weakness in DX, decline in LME inventories by 0.1 percent along with positive manufacturing data from UK cushioned sharp fall in the prices. The red metal touched an intra-day low of $6785.75/tonne and closed at $6798/tonne yesterday’s trading session. On the domestic front, prices ended on negative note and closed at Rs. 368/kg on Wednesday after touching an intra-day low of Rs 366.4 kg. Outlook In the intra-day, we expect base metals prices to trade on the negative on the back of weak global market sentiments coupled with strength in DX. Further, weak economic data from US and China has increased the worries among the investors that the demand for base metals may go down. Additionally, weak HSBC manufacturing data from china and expectation of unfavourable economic data from US will add further downside pressure. However, expectation of favourable economic data from Euro zone and UK may prevent sharp downside in the pressure. In the Indian markets, appreciation in the Rupee will add 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 May 2, 2013 Support 364/361 97/96 104.5/103.5 96.5/95.5 785/770 Resistance 372/377 99/100 106.5/107.5 98/99.8 804/815

(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

$/tonne

14760.0

-3.9

-3.2

-8.0

-16.9

Rs /kg

794.5

-3.6

-3.7

-9.6

-15.5

$/tonne

1969.5

-3.0

-3.7

-4.0

-9.1

Rs /kg

105.5

-3.6

-4.3

-5.7

-7.5

$/tonne

1839.0

-1.4

-4.0

-1.2

-10.6

Rs /kg

98.0

-2.2

-4.1

-3.0

-9.3

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 1st May 618,175 5,152,825 178,476 1,062,175 254,325 30th April 618,600 5,157,625 177,036 1,068,475 255,175 Actual Change -425 -4,800 1,440 -6,300 -850 (%) Change -0.1 -0.1 0.8 -0.6 -0.3
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Thursday| May 2, 2013

International Commodities
Important Events for Today
Indicator Monetary Base y/y Monetary Policy Meeting Minutes HSBC Final Manufacturing PMI Spanish Manufacturing PMI Italian Manufacturing PMI Construction PMI French 10-y Bond Auction Minimum Bid Rate ECB Press Conference Trade Balance Unemployment Claims Prelim Nonfarm Productivity q/q Prelim Unit Labor Costs q/q Country Japan Japan China Europe Europe UK Europe Europe Europe US US US US Time (IST) 5:20am 5:20am 7:15am 12:45pm 1:15pm 2:00pm Tentative 5:15am 6:00pm 6:00pm 6:00pm 6:00pm 6:00pm Actual 23.1% 50.4 Forecast 50.6 44.6 44.9 48.1 0.50% -42.1B 346K 1.8% 0.8% Previous 19.8% 50.5 44.2 44.5 47.2 1.94/3.1 0.75% -43.0B 339K -1.9% 4.6% Impact Medium Medium Medium Medium Medium High Medium High High High High Medium Medium

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