Commodities Daily Report

Friday| June 14, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Reena Rohit Chief Manager Non-Agri Currencies and Commodities Reena.rohit@angelbroking.com (022) 2921 2000 Extn :6134 Anish Vyas Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report
Friday| June 14, 2013

International Commodities
Overview
US Core Retail Sales increased by 0.3 percent in the last month. German Wholesale Price Index (WPI) declined by 0.4 percent in May. US Unemployment Claims declined to 334,000 for w/e on 7th June. Asian markets are trading higher today on the back of favorable economic data from US which beat the estimates. Further, expectations that Federal Reserve will make plans to keep the interest rates lower also supported an upside in global markets. US Core Retail Sales increased by 0.3 percent in May. Retail Sales rose by 0.6 percent in May as against a previous rise of 0.1 percent in April. Unemployment Claims declined by 12,000 to 334,000 for week ending on 7th June from earlier rise of 346,000 in prior week. Import Prices fell by 0.6 percent in last month as compared to drop of 0.7 percent in April. Business Inventories rose 0.3 percent in April with respect to decline of 0.1 percent a month ago. The US Dollar Index (DX) declined 0.3 percent in the yesterday’s trading session on the back of better than forecast economic data from US. Further, rise in risk appetite in global markets in later part of the trade added downside pressure on the currency. Additionally, expectations of the Fed keeping interest rates low acted as a negative factor for the currency. The DX touched an intra-day low of 80.51 and closed at 80.74 on Thursday. The Indian Rupee depreciated 0.3 percent in yesterday’s trading session. The currency depreciated on account of cut in the growth outlook of the economy to 5.7 percent by World Bank. Further, weak domestic markets coupled with disappointing statement from Finance Minister as no concrete steps were taken added downside pressure on the currency. However, sharp downside in the Rupee was cushioned as a result of weakness in the DX. Additionally, selling of dollars from exporters prevented sharp downside in the Rupee. The currency touched an intraday low of 58.56 and closed at 57.99 against dollar on Thursday. For the month of June 2013, FII outflows totaled at Rs.905.30 crores ($149.83 million) as on 13th June 2013. Year to date basis, net capital inflows stood at Rs.82,299.80 crores ($15,203.10 million) till 13th June 2013.

Market Highlights (% change)
Last INR/$ (Spot) 57.99 Prev day -0.3

as on 13 June, 2013 w-o-w -1.9 m-o-m -5.8 y-o-y -3.9

$/Euro (Spot)

1.3374

0.3

1.0

3.5

5.9

Dollar Index NIFTY

80.74

-0.3

-1.0

-3.6

1.6

5699.1

-1.1

-3.8

-4.9

11.3

SENSEX

18827.2

-1.1

-3.5

-4.5

2.9

DJIA

15176.1

1.2

0.9

-0.4

21.4

S&P

1636.4

1.5

0.9

0.2

24.4

Source: Reuters

The Euro appreciated 0.3 percent in the yesterday’s trade on the back of weakness in the DX. Further, upbeat global markets in the later part of the trade also supported an upside in the currency. The Euro touched an intra-day high of 1.339 and closed at 1.3374 against the dollar on Thursday. However, sharp upside in Euro was capped on account of unfavourable economic data from Germany. German Wholesale Price Index (WPI) declined by 0.4 percent in May from earlier fall of 0.2 percent a month ago.

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Commodities Daily Report
Friday| June 14, 2013

International Commodities
Bullion Gold
Spot gold prices declined by around 0.2 percent in yesterday’s trading session on the back of rise in risk appetite in the global markets in later part of the trade which led to fall in safe haven demand. Further, expectations that Fed will keep the interest rates lower also added downside pressure on prices. The yellow metal touched an intra-day low of $1374.09/oz and closed at $1385.40/oz in yesterday’s trade. However, sharp downside in the prices was cushioned as a result of weakness in the DX. In the Indian markets, prices ended on a negative note, declining 0.7 percent and closed at Rs.27766/10 gms after touching an intra-day low of Rs. 27711/10 gms on Thursday. Depreciation in the Rupee prevented sharp fall in prices on the MCX. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1385.4 Prev. day -0.2 as on 13 June, 2013 WoW -2.0 MoM -2.8 YoY -14.6

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

Rs/10 gms $/oz

27890.0

1.0

1.1

4.5

-7.6

1385.0

0.2

-1.1

-3.4

-14.2

$/oz

1377.6

0.0

-2.7

-0.7

-14.6

Rs /10 gms

27766.0

-0.7

-0.5

4.0

-7.8

Source: Reuters

Silver
Taking cues from fall in gold prices along with downside in base metals group, Spot silver prices fell 0.3 percent in yesterday’s trade. The white metal touched an intra-day low of $21.55/oz and closed at $21.80/oz in yesterday’s trading session. However, sharp downside in prices was cushioned as a result of weakness in the DX. On the domestic front, prices dropped 0.7 percent and closed at Rs.43,235/kg after touching an intra-day low of Rs.43,180/kg on Thursday.

Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (July’13) MCX Silver (July’13) Unit $/oz Rs/1 kg Last 21.8 44800.0 Prev day -0.3 0.7

as on 13 June, 2013 WoW -3.5 -1.2 MoM -6.7 -1.1 YoY -23.8 -19.3

$/oz $/ oz

2183.0 21.6

0.2 -1.0

-3.5 -4.9

-6.9 -4.7

-24.4 -25.4

Rs / kg

43235.0

-0.7

-2.9

-2.9

-20.6

Outlook
In today’s session, we expect precious metals to trade lower on the back of rise in risk appetite in global markets thereby leading to fall in safe haven demand. Further, expectations that Fed will maintain its interest rates will exert downside pressure on prices. However, weakness in the DX will cushion sharp fall in prices. In the Indian markets, appreciation in the Rupee will add downside pressure on prices. Technical Outlook
Unit Spot Gold MCX Gold Aug’13 Spot Silver MCX Silver July’13 $/oz Rs/10 gms $/oz Rs/kg valid for June 14, 2013 Support 1378/1373 27650/27550 21.55/21.40 42900/42600 Resistance 1389/1396 27870/28000 21.95/22.30 43700/44300

Source: Reuters

Technical Chart – Spot Gold

Source: Telequote

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Commodities Daily Report
Friday| June 14, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 0.8 percent in yesterday’s trading session, taking cues from weakness in the DX. Additionally, favorable economic data from US led to expectations of increase in demand for the fuel. Crude oil prices touched an intra-day high of $96.92/bbl and closed at $96.70/bbl on Thursday. Additionally, decline in US jobless claims data shows that economy is growing and acted as a positive factor for prices. On the domestic bourses, prices gained 0.2 percent and the commodity closed at Rs.5,571/bbl, after touching an intra-day high of Rs.5,583/bbl in yesterday’s trade. Depreciation in the Rupee supported an upside in prices on the MCX. Market Highlights - Crude Oil (% change)
Crude Oil Brent (Spot) Nymex Crude (July ’13) ICE Brent Crude (July’13) MCX Crude (June ’13) Unit $/bbl $/bbl Last 104.1 96.7 Prev. day -0.2 0.8 WoW 0.5 2.0 as on 13 June, 2013 MoM 1.2 1.6 YoY 7.1 17.0

$/bbl

104.3

0.7

0.6

1.6

7.4

Rs/bbl

5571.0

0.2

3.1

7.3

19.5
Source: Reuters

Market Highlights - Natural Gas
Natural Gas (NG) Nymex NG MCX NG (June ’13) Unit $/mmbtu Rs/ mmbtu Last 3.822 221.1

(% change)

as on 13 June, 2013

Natural Gas
Nymex natural gas prices gained by more than 1 percent yesterday on the back of less than expected rise in US natural gas inventories. Further, weakness in the DX supported an upside in prices. However, sharp upside in prices was capped as a result of expectations warm weather conditions. Gas prices touched an intra-day high of $3.85/mmbtu and closed at $3.822/mmbtu in yesterday’s trade. On the domestic front, prices rose 1.2 percent on account of depreciation in the Rupee and closed at Rs.221.10/mmbtu after touching an intra-day high of Rs.223.70/mmbtu on Thursday. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory increased less than expectations by 95 billion cubic feet (bcf) which stood at 2.347 trillion cubic feet for the week ending on 7th June 2013. Outlook For today’s trade, crude oil prices in the international markets are expected to trade on a higher note on the back of upbeat global markets coupled with weakness in the DX. Further, favorable economic data from US in yesterday’s trade and Fed keeping the interest rates lower will support an upside in prices. Additionally, expectations of positive economic data from US and Euro Zone will be more optimistic for crude prices. Appreciation in the Indian Rupee will prevent sharp gained in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude June’13 $/bbl Rs/bbl valid for June 14, 2013 Support 95.95/95.10 5530/5480 Resistance 97.35/98.05 5610/5650

Prev. day 1.1 1.2

WoW -0.70 1.14

MoM -2.92 2.74

YoY 74.44 79.46

Source: Reuters

Technical Chart – NYMEX Crude Oil

Source: Telequote

Technical Chart – NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report
Friday| June 14, 2013

International Commodities
Base Metals
The base metals pack traded lower yesterday on the back of weak global markets in the early part of the trade and remained weak in the whole trading session. However, sharp downside in prices was cushioned on account of weakness in the DX along with favourable economic data from US. Further, decline in LME inventories also prevented sharp fall in prices. In the Indian markets, depreciation in the Rupee restricted further fall in prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (June’13) LME Aluminum (3 month) MCX Aluminum Rs /kg 106.2 -0.3 -3.7 5.1 -1.4 $/tonne 1860.0 -0.6 -5.2 0.2 -4.8 Rs/kg 408.4 -0.8 -2.1 2.1 -1.1 $/tonne Last 7062.0 Prev. day -1.0 as on 13 June, 2013 WoW -3.7 MoM -10.0 YoY -4.9

Copper
Copper prices fell 1 percent in yesterday’s trade on the back of weak global markets in the prior part of the trade and continued to trade lower till the end. The red metal touched an intra-day low of $7011.25/tonne and closed at $7062.0/tonne in yesterday’s trading session. However, sharp downside in prices was cushioned as a result of weakness in the DX coupled with favourable economic data from US. Further, decline in LME copper inventories by 0.2 percent which stood at 608,300 tonnes restricted sharp fall in prices. On the domestic front, prices fell 0.8 percent and closed at Rs. 408.40/kg, after touching an intra-day low of Rs 406.20/kg on Thursday. Depreciation in the Rupee prevented sharp fall in prices on the MCX. Outlook In today’s session, we expect base metal prices to trade with a positive note on the back of upbeat global markets coupled with weakness in the DX. Additionally, favourable economic data from US in yesterday’s trade along with forecast for optimistic data from US and Euro Zone in today’s trade will act as a positive factor for prices. On the domestic bourses, appreciation in the Rupee will prevent sharp upside in prices. Technical Outlook
Unit MCX Copper June’13 MCX Zinc June ’13 MCX Lead June ’13 MCX Aluminum June’13 MCX Nickel June ’13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for June 14, 2013 Support 406/403 105.0/104.20 120.0/119.20 105.50/104.80 812/807 Resistance 411/414 106.50/107.40 121.80/122.50 107.0/107.60 824/832

(June’13) LME Nickel (3 month) MCX Nickel (June’13) LME Lead (3 month) MCX Lead (June’13) LME Zinc (3 month) MCX Zinc (June’13)
Source: Reuters

$/tonne

14110.0

-1.1

-6.2

-6.7

-15.7

Rs /kg

818.5

-1.0

-4.4

-1.1

-12.3

$/tonne

2091.5

-1.4

-4.8

5.8

9.0

Rs /kg

121.0

-1.2

-3.2

11.8

13.5

$/tonne

1847.0

-1.2

-4.5

0.2

-1.9

Rs /kg

105.8

-1.0

-2.9

5.6

0.9

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 13 June 608,300 5,206,350 183,672 1,091,625 199,975
th

12 June 609,550 5,214,150 183,720 1,096,250 200,325

th

Actual Change -1,250 -7,800 -48 -4,625 -350

(%) Change -0.2 -0.1 0.0 -0.4 -0.2
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Friday| June 14, 2013

International Commodities
Important Events for Today
Indicator Monetary Policy Meeting Minutes CPI y/y Core CPI y/y MPC Member McCafferty Speaks PPI m/m Core PPI m/m Current Account Capacity Utilization Rate Industrial Production m/m Prelim UoM Consumer Sentiment Country Japan Euro Euro UK US US US US US US Time (IST) 5:20am 2:30pm 2:30pm 3:20pm 6:00pm 6:00pm 6:00pm 6:45pm 6:45pm 7:25pm Actual Forecast 1.4% 1.2% 0.1% 0.1% -110B 77.9% 0.3% 84.9 Previous 1.4% 1.0% -0.7% 0.1% -110B 77.8% -0.5% 84.5 Impact Medium Medium Medium Medium High Medium Medium Medium Medium High

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