Commodities Daily Report
Tuesday, May 17, 2016
International Commodities
Content
Overview
Precious Metals
Energy
Base Metals
Important Events for today
Research Team
Prathamesh Mallya
Sr. Research Analyst (Non-Agro Commodities & Currency)
prathamesh.mallya@angelbroking.com
(022) 2921 2000 Extn :6134
Kaynat Chainwala
Research Analyst
kaynat.chainwala@angelbroking.com
(022) 2921 2000 Extn :6136
Angel Commodities Broking Pvt. Ltd.
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Commodities Daily Report
Tuesday, May 17, 2016
International Commodities
Overview
 India’s WPI Inflation surged by 0.34 percent in Apr’16
 US Empire State Manufacturing Index fell to 9.0 levels in May’16
US and Asian markets have revived and is now trading in green after
Goldman Sachs gave its positive take on markets. Moreover, crude prices
hit six-month highs on global supply outages. All the above factors kept
the global markets positive.
Market Highlights (% change)
Last
Prev day
as on May 16, 2016
w-o-w
m-o-m
y-o-y
INR/$
(Spot)
66.8
0.02
-0.1
-0.3
-5.1
$/Euro
(Spot)
1.1
0.10
-0.6
0.3
-1.2
Dollar
Index
94.6
0.0
0.5
0.1
19.0
NIFTY*
7860.8
0.59
-0.1
#N/A
-4.5
SENSEX*
25653.2
0.64
-0.1
#N/A
40.3
DJIA
17710.7
1.00
0.0
-1.9
-3.2
S&P
2066.7
1.0
0.1
0.3
-1.9
US DOLLAR INDEX
The Dollar Index traded higher by 0.5 percent yesterday as markets
discounted the statement made by Charles Evans, president of the
Chicago Fed. He said that America’s economic fundamentals were solid
and growth this year should pick up to around 2.5 percent. However,
there are some weak spots in capital spending hence continuation of
wait and watch policy with respect to US interest rates would be
appropriate.
He also said that a temporary overshoot in inflation so as to lift consumer
price growth up to the Fed's longer-term target of 2 percent and raise
overall inflation expectations from current low levels is welcome. All the
above statements acted as a positive factor for the greenback.
The Indian Rupee depreciated by 0.2 percent yesterday led by outflows
of funds in the domestic market amid negative sentiments in the global
markets. Moreover, fresh buying of the American currency by importers
and banks amid stronger dollar in the overseas market dragged the rupee
further lower.
Domestic markets i.e. Sensex and Nifty ended on a positive note after
Rajya Sabha passed a new bankruptcy code to address corporate debts
and improve the ease of doing business. Moreover, recently released UN
report stated that despite delay in domestic policy reforms, India’s
economy has been gaining momentum slowly and is projected to grow
by 7.3 per cent in 2016.
News & developments
Oil price to be dragged down by more Saudi pumping
The oil price remaining "lower for longer" is now "highly likely",
says CNBC, after Saudi Arabia ramped up its reform agenda.
The kingdom has replaced its veteran oil minister, Ali al-Naimi, with
Khalid al-Falih, the chairman of state-owned oil company Saudi Aramco,
who is close to reforming Crown Prince Mohammad bin Salman and has
already indicated the kingdom will continue to prioritise market share
over prices.
Source: Reuters
Chinese Indicators Lag behind Expectations, Show Economy
Struggles
Industrial output rose 6.0% year-over-year in April, compared
with 6.8% growth in March, the National Bureau of Statistics
said Saturday. This was below a median forecast of 6.6%
growth by 15 economists surveyed by The Wall Street Journal.
Fixed-asset investment in urban areas grew by a weaker-thanexpected 10.5% year-over-year in the January-to-April period,
compared with an annual increase of 10.7% for the first three
months of 2016.
Retail sales—a traditional bright spot—grew by a less-thanexpected 10.1% in April compared with a year earlier, slowing
from March’s 10.5% year-over-year rise, the statistics bureau
said. (WSJ)
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Commodities Daily Report
Tuesday, May 17, 2016
International Commodities
Bullion
Gold
On Monday, spot gold prices rose marginally by 0.02 percent to close at
$1273.5 per ounce on pressure from strong crude futures and U.S. equity
markets. Bullion prices were initially supported by lower stock markets and
soft Chinese data, which boosted interest in the metal as an alternative
asset.
Market Highlights - Gold (% change)
as on May 16, 2016
Prev.
day
Gold
Unit
Last
Gold
(Spot)
$/oz
1273.5
Gold (Spot
-Mumbai)
Rs/10
gms
Comex
Gold
Spot silver prices rose marginally by 0.2 percent on Monday to close at
$17.1 per ounce in line with rise in gold prices. However stronger dollar
capped the rally.
MCX Gold
(Jun’16)
On the MCX, silver prices rose marginally by 0.03 percent to close at
Rs.40987 per kg.
Market Highlights - Silver (% change)
On the MCX, gold prices declined marginally by 0.19 percent to close at
Rs.29977 per 10 gms.
Silver
WoW
MoM
YoY
0.02
0.8
3.2
4.1
30100.0
0.58
0.7
#N/A
10.3
$/oz
1273.4
0.12
0.6
1.6
3.9
Rs /10
gms
29977.0
-0.19
0.6
3.5
9.2
Source: Reuters
Silver
Unit
as on May 13, 2016
Last
Prev day
WoW
MoM
YoY
Outlook
Silver
(Spot)
$/oz
17.1
0.2
0.7
5.7
-2.1
On an intraday basis, we expect gold prices to trade higher continuing its
positive momentum from the recent trading sessions wherein the
possibility of delayed rate hike on the one hand and stronger ETF inflows
have boosted the safe haven appeal for the yellow metal.
Silver
(Spot Mumbai)
Comex
Silver
Rs/1
kg
41500.0
1.2
0.2
#N/A
4.3
$/ oz
17.1
0.2
0.3
0.9
-2.5
MCX Silver
(May’16)
Rs / kg
40987.0
0.03
0.6
6.4
2.6
On the MCX, gold prices are expected to trade higher today.
Source: Reuters
Technical Outlook
valid for May 17, 2016
Unit
Spot Gold
MCX Gold Jun’16
MCX Silver May’16
NCDEX Silver hedge June’16
Resistance
1270/1221
1283/1288
29800/28650
30100/30200
27287/26230
27560/27650
$/oz
40600/40200
41300/41700
Rs/kg
40600/40200
41300/41700
36975/36575
37675/38075
$/oz
Rs/10 gms
NCDEX Gold hedge May’16
Spot Silver
Support
Technical Chart – Spot Gold
Source: Reuters
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37
Commodities Daily Report
Tuesday, May 17, 2016
International Commodities
Energy
Crude Oil
Market Highlights - Crude Oil (% change)
Unit
Last
Prev.
day
WoW
MoM
YoY
Brent
(Spot)
$/bbl
48.5
3.1
15.2
18.5
-24.7
Nymex
Crude
(May’16)
ICE Brent
Crude
(May’16)
$/bbl
47.7
3.3
9.9
18.2
-20.1
$/bbl
49.0
2.4
12.2
13.6
-26.7
Rs/bbl
3239.0
2.6
9.2
15.5
-16.0
Crude Oil
WTI oil prices rose by 3.3 percent on Monday to close at $47.7 per
barrel as prices hit six-month highs on worries about global supply
outages and as long-time bear Goldman Sachs sounded more positive
on the market, although a stockpile build at the U.S. storage hub for
crude futures limited gains.
Expectations of resumption in oil exports from a Libyan port, a ramp up
in Nigerian crude production by Exxon Mobil Corp and an improved oilfor-loans deal reached by Venezuela with China furthered the tempered
the bullish theme in oil.
as on May 16, 2016
MCX Crude
(May’16)
Source: Reuters
Market Highlights - Natural Gas (% change)
as on May 16, 2016
On the MCX, oil prices rose by 2.6 percent to close at Rs.3239 per barrel.
Natural
Gas (NG)
API inventory forecast
Reports from industry group the American Petroleum Institute (API) and
the U.S. Department of Energy's Energy Information Administration
(EIA) estimated, on average that crude stocks declined 3.2 million
barrels in the week ended May 13. Gasoline stocks likely fell 700,000
barrels last week, while distillate inventories, which include heating oil
and diesel fuel.
Nymex
NG
MCX NG
(May’16)
Unit
Last
Prev. day
WoW
MoM
YoY
$/mmbtu
2.17
-2.69
-2.65
8.99
-28.17
Rs/
mmbtu
136.1
-3.75
-3.34
6.58
-29.26
Source: Reuters
Technical Chart – NYMEX Crude Oil
Outlook
On an intraday basis, we expect oil prices to trade higher today on
supply outages across the globe while supply glut in inventories is
something that needs a close watch. The API inventory due tonight is
expected to show a decline in crude stocks which will be supportive for
oil prices.
On the MCX, oil prices are expected to trade higher today.
Technical Outlook
valid for May 17, 2016
Unit
Support
Resistance
$/bbl
47.30/46.50
48.95/49.90
MCX Crude May’16
Rs/bbl
3120/3070
3230/3290
NCDEX Crude May’16
Rs/bbl
3160/3110
3270/3330
NYMEX Crude Oil
Technical Chart – NYMEX Natural Gas
Source: Reuters
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Commodities Daily Report
Tuesday, May 17, 2016
International Commodities
Base Metals
Market Highlights - Base Metals (% change)
Base metals on the LME traded positive although various Federal
Reserve Bank members called a June interest-rate called a possibility.
Besides, firm oil prices and brighter company earnings also acted as a
positive factor.
Unit
LME Copper (3
Last
Prev. day
as on May 16, 2016
MoM
YoY
-0.9
-22.3
-27.6
0.6
-0.5
-17.0
-24.4
1550.0
0.8
-0.7
-13.0
-16.5
Rs /kg
103.5
0.5
-0.4
-6.9
-11.0
$/tonne
8685.0
0.5
0.5
-33.2
-37.4
Rs /kg
584.8
0.7
1.0
-27.6
-33.5
$/tonne
1746.0
2.0
1.0
-7.1
-11.8
Rs /kg
117.6
1.6
1.0
0.0
-6.9
$/tonne
1898.0
0.1
3.5
-10.9
-17.2
Rs /kg
126.4
-0.1
3.5
-4.6
-13.2
$/tonne
4645.0
0.4
Rs/kg
311.7
$/tonne
WoW
month)
MCX Copper
(May’16)
On the MCX, base metals traded higher in line with international
trends.
LME Aluminum
(3 month)
MCX Aluminum
Copper
(May’16)
LME Copper prices rose 0.4 percent on Monday to close at $4645 per
tonne firm oil prices and brighter company earnings, while investors
looked for further Chinese measures to cement a recovery after tepid
economic growth in April.
LME Nickel
BOJ Governor Haruhiko Kuroda said last week that the Bank of Japan
is likely to expand monetary stimulus either in June or July. Also,
producers from Codelco to Glencore Plc gave optimistic longer term
outlooks at an industry conference in Miami as three years of
declining prices deters production.
LME Lead
(3 month)
MCX Nickel
(May’16)
(3 month)
MCX Lead
(May’16)
LME Zinc
(3 month)
China will push forward supply-side reform and increase the number
of middle-income earners, state television quoted President Xi Jinping
as saying on Monday.
MCX copper prices rose by 0.6 percent last week to close at Rs.311.7
per kg.
MCX Zinc
(May’16)
Source: Reuters
LME Inventories in tonnes
13th May
Copper
Outlook
We expect LME Copper prices to trade lower as China’s industrialproduction and investment data came in below expectations in April,
despite string of easing measures. Also, markets will now await FOMC
Meeting Minutes due to be released on Wednesday.
We expect MCX Copper prices to trade sideways today.
12th May
Actual
Change
(%)
Change
159025
156675
2350
1.50%
2577775
2584400
-6625
-0.26%
Nickel
406464
412344
-5880
-1.43%
Zinc
390050
390375
-325
-0.08%
Lead
175825
176075
-250
-0.14%
Aluminum
Source: Reuters
Technical Outlook
valid for May 17, 2016
Unit
Support
Resistance
MCX Copper June’16
Rs /kg
309/307
313/315
MCX Zinc May’16
Rs /kg
125.50/124.50
127.50/128.50
MCX Lead May’16
Rs /kg
115.50/114.50
117.50/118.50
MCX Aluminum May’16
Rs /kg
102.50/101.50
104.50/105.50
MCX Nickel May’16
Rs /kg
578/568
592/600
Technical Chart – LME Copper
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Commodities Daily Report
Tuesday, May 17, 2016
International Commodities
Economic indicators to be released on May 17, 2016
Indicator
Country
Time (IST)
Actual
Forecast
Previous
Impact
Building Permits
US
6:00pm
-
1.13M
1.09M
High
CPI m/m
US
6:00pm
-
0.4%
0.1%
High
Core CPI m/m
US
6:00pm
-
0.2%
0.1%
High
Housing Starts
US
6:00pm
-
1.12M
1.09M
Medium
Capacity Utilization Rate
US
6:45pm
-
75.1%
74.8%
Medium
Industrial Production m/m
US
6:45pm
-
0.3%
-0.6%
Medium
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