metals & energy june 2, 2016 - aditya birla group...metals & energy june 2,2016 aditya birla...

Metals & Energy June 2, 2016

Aditya Birla Money Limited

Cello Triumph, Unit No. 502-503 & 505 | I. B. Patel Road | of f W.E. Highway | Goregaon (East) | Mumbai - 400063 | Tel: +91 22 61802800

Market synopsis Precious Metals

Base metals

High Low Close %Chg OI


MCX

MCX (Rs/kg)

Gold(Jun) (Rs/10 gm) 28,798 28,480 28,646 0.1 8,374

Alum.(June) 106.5 104.1 106.1 1.5 2,444

Silver(July) (Rs/kg) 38,780 38,270 38,460 0.2 12,821

Copper(June) 312.3 307.8 310.5 (0.7) 29,730

Gold Mini (Rs/10 gm) 28,800 28,500 28,626 0.1 8,226

Lead(June) 116.3 113.0 116.2 1.4 3,402

Silver Mini (Rs/kg) 38,786 38,277 38,468 0.2 14,198

Nickel(June) 576.4 566.5 574.1 0.4 26,841

COMEX (US$/oz)

Zinc(June) 133.7 127.8 133.1 2.7 9,781

Gold(Jun) 1,219.8 1,205.4 1,211.9 (0.2) 490,097

COMEX (US$/Ib)

Silver(July) 16.11 15.83 15.93 (0.4) 198,039

Copper 209.0 205.2 207.3 (1.1) 224,730

Ratios

LME Inventory levels

in US$ in US$ Ratio

Base Metals Close Prev close %Chg

Gold v/s Oil 1,211.9 49.0 24.7

Aluminum 2,520,175 2,529,100 (0.4)

Gold v/s Silver 1,211.9 15.93 76.1

Copper 154,350 151,725 1.7

Lead 185,375 185,475 (0.1)

Energy

Nickel 401,508 401,766 (0.1)


Zinc 380,450 380,700 (0.1)

MCX

Cr. oil(June) (Rs/bbl) 3,320 3,233 3,308 (0.8) 22,245

Currency

Nat.gas(June) (Rs/mmbtu) 161.9 153.8 161.3 4.1 14,321

Close Prev close %Chg

NYMEX

Rs/US$ 67.4538 67.2600 0.3

Cr. oil(Jul) (US$/bbl) 49.3 47.8 49.0 (0.2) 1,722,375

US$/EUR 1.1188 1.1132 0.5

Brent Cr. oil (US$/bbl) 50.0 48.7 49.7 0.1 2,190,724

US$/GBP 1.4416 1.4483 (0.5)

Nat.gas(Jul) (US$/mmbtu) 2.39 2.28 2.38 4.1 1,054,447

JPY/US$ 109.5400 110.7300 (1.1)

Pivot Levels MCX levels

Commodity R3 R2 R1 Pivot S1 S2 S3

Gold 28,896 28,805 28,721 28,646 28,571 28,487 28,396

Silver 38,860 38,715 38,580 38,460 38,340 38,205 38,060

Aluminum 107.89 107.23 106.60 106.05 105.50 104.88 104.21

Copper 313.94 312.68 311.50 310.45 309.40 308.23 306.96

Lead 118.74 117.80 116.93 116.15 115.37 114.50 113.56

Nickel 581.9 579.1 576.4 574.1 571.8 569.2 566.3

Zinc 137.68 136.00 134.44 133.05 131.66 130.10 128.42

Crude oil 3,376 3,352 3,328 3,308 3,288 3,265 3,240

Nat. Gas 167.66 165.35 163.20 161.30 159.40 157.25 154.94

International levels

Commodity R3 R2 R1 Pivot S1 S2 S3

Gold 1,223.20 1,219.10 1,215.28 1,211.90 1,208.52 1,204.70 1,200.60

Silver 16.14 16.06 15.99 15.93 15.86 15.79 15.71

COMEX Copper 210.283 209.200 208.193 207.300 206.407 205.400 204.317

Crude oil 50.19 49.76 49.36 49.01 48.66 48.26 47.83

Br. Crude oil 50.78 50.40 50.04 49.72 49.40 49.05 48.66

Nat. Gas 2.467 2.436 2.407 2.381 2.355 2.327 2.295

LME Aluminum 1,594.12 1,585.00 1,576.52 1,569.00 1,561.48 1,553.00 1,543.88

LME Copper 4,681.37 4,658.00 4,636.27 4,617.00 4,597.73 4,576.00 4,552.63

LME Nickel 8,588.83 8,547.50 8,509.08 8,475.00 8,440.93 8,402.50 8,361.18

LME Lead 1,748.86 1,734.75 1,721.63 1,710.00 1,698.37 1,685.25 1,671.14

LME Zinc 2,036.94 2,013.00 1,990.74 1,971.00 1,951.26 1,929.00 1,905.06

A pivot is a level at which the market direction can change for the day.

Pivot levels are only broad indicators and not necessarily our view on the commodity.




Market news and Technical forecast

Gold prices pared early gains and moved into

negative territory, as the dollar briefly pared

losses following U.S. manufacturing data and as

U.S. equities came off their lows, while the

market tried to assess how close the Federal

Reserve is to raising interest rates.

Data yesterday showed U.S. manufacturing

activity expanded for the third straight month in

May, but growth in new orders slowed further as

factories grappled with sluggish overseas

demand and weak capital spending in the energy

sector.

Spot gold was down 0.4% at $1,210.31 per ounce

in aftermarket hour trades, falling for the tenth

out of the last 11 sessions. Gold shed around 6%

in May, its biggest decline in six months.

U.S. futures for August delivery closed down

0.2% at $1,214.7 per ounce.

The holdings of SPDR Gold trust increased to

870.74 tons, as on June 1, while that of ishares

Silver trust declined to 10,442.66 tons, as of May

23.

The Fed's Beige Book report pointed to rising

labor costs’, potentially making policymakers

more comfortable that inflation is on track to rise

to the central bank's 2% target.

Technical outlook:

Gold’s intra-day trend looks sideways to up till

prices are trading above 28845, while on the

upside prices may test levels at 29070-29150.

Silver’s intra-day trend looks down till prices are

trading below 38700-38800, while on the

downside prices may test 38200-37900 levels.

Precious metals





Crude oil prices closed lower, after facing

technical resistance at around the $50 per barrel

mark, with the market retracing earlier declines

after OPEC sources said the group will likely

consider a production curb at its forthcoming

meeting.

However, prices briefly slipped further after

settlement when an industry group said its

weekly data showed a surprise build in U.S. crude

inventories and Iran's oil minister called for OPEC

to adopt the radical idea of production quotas

for individual member countries instead of for

the group as a whole.

American Petroleum Institute reported a surprise

build of nearly 2.4mn barrels in U.S. crude

stockpiles last week, distillates stocks dropped

1.15mn barrels, and gasoline stock declined

1.48mn barrels, slightly more than expected.

Natural gas futures rallied for the third straight

session, climbing to a 5-month high as forecasts

for the first 2-weeks of June pointed to intense

heat, boosting near-term demand expectations.

Demand for natural gas tends to rise in the

summer months as warmer temperatures

increase the need for gas-fired electricity to

power air conditioning.

Technical outlook:

Crude oil’s trend looks sideways to down till

prices are trading till prices are trading below

3320, while on the downside support holds at

3230-3218 levels.

Natural gas trend remains positive till prices are

trading above 159.5-157.5, while on the upside

prices may rally further towards 164-166 levels.

Energy complex





Zinc surged to its highest level in 10-months, as

speculators bet that weaker supplies would

create shortages, but copper touched a one-

week low on worries about demand in top

consumer China.

Speculators pushed zinc prices through key

technical levels, fuelling a rally by triggering pre-

set buying orders, also other industrial metals

got a fillip late in the session from a report that

OPEC will consider setting a new oil output

ceiling at its meeting on Thursday.

3-month zinc on LME climbed 2.5% to close at

$1,971 per ton, the strongest since July 30 last

year. LME copper finished down 1.1% at

$4,619.5, after touching a session low of

$4,565.5, the weakest since May 24.

LME data also showed copper inventories rose

2,625 tons on Wednesday, and have gained

about 8% since early April.

China's manufacturing activity showed signs of

steadying in May, but remained weak reflecting

soft demand at home and abroad, suggesting the

world's second-largest economy is still struggling

to regain traction.

Technical outlook:

Copper’s intra-day trend looks sideways to down

till prices are trading below 312.5, while on the

downside prices may test 307-306.

Nickel’s trend looks positive till prices are trading

above 566.4, while on the upside resistance is

seen at 580-583.

Lead’s trend looks positive till prices are trading

above 113-114, while on the upside prices may

test 117-118.5 levels.

Base metals




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Spreads and Arbitrage Calendar spreads

Global Indices

Commodity Near month 2nd month Close Prev close

Markets Close Prev close %Chg

Precious metals

Asia

Gold (Rs/10 gm) 28,646 28,990 344 309

Sensex 26,713.9 26,668.0 0.2

Silver (Rs/kg) 38,460 38,400 683 717

Nifty 8,180.0 8,160.1 0.2

Nikkie 16,955.7 17,235.0 (1.6)

Base metals

Hang Seng 20,761.0 20,815.1 (0.3)

Alum. (Rs/kg) 106.1 106.9 0.85 1.00

Shanghai 2,913.5 2,916.6 (0.1)

Copper (Rs/kg) 310.5 314.9 4.45 4.40

Straits Times 2,790.5 2,791.1 (0.0)

Lead (Rs/kg) 116.2 116.8 0.60 0.70

Nickel (Rs/kg) 574.1 580.6 6.50 6.60

America

Zinc (Rs/kg) 133.1 133.8 0.70 0.65

Dow Jones 17,789.7 17,787.2 0.0

Nasdaq 4,952.3 4,948.1 0.1

Energy

Cr. oil (Rs/bbl) 3,308 3,356 48 45

Europe

Nat.gas (Rs/mmbtu) 161.3 167.0 5.7 6.9

CAC 4,475.4 4,505.6 (0.7)

DAX 10,204.4 10,262.7 (0.6)

National-International price parity

FTSE 6,191.9 6,230.8 (0.6)

MCX COMEX Close* Prev close*

INR 67.45 67.26

Arbitrage

Gold 28,646 1,211.90 (60.44) (59.43)

Metals & Oil Close Prev close %Chg

Silver 38,460 15.93 (229.91) (323.78)

Lead - Zinc (16.90) (15.00) 12.7

Copper 310.5 207.300 2.17 1.77

COMEX Gold - Silver 76.09 75.95 0.2

Crude oil 3,308 49.0 2.09 30.53

Brent - U.S. crude 0.71 0.59 20.3

*MCX premium/ (discount)

COMEX Gold Options (Near month i.e. July)

Near + 1 month i.e. August

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Economic calendar

Date

Country /

Currency Event IST Actual Cons. Previous

30-May EUR German Consumer Price Index (m-o-m) 17:30 0.3% 0.30% -0.40%

EUR German Consumer Price Index (y-o-y) 17:30 0.1% 0.10% -0.10%

31-May JPY Jobless Rate 5:20 3.2% 3.20% 3.20%

JPY Industrial Production (y-o-y) 5:20 -3.5% -5.10% 0.20%

JPY Small Business Confidence 10:30 45.6 47.50 47.80

EUR German Unemployment Change 13:25 11k -5k -16k

EUR German Unemployment Rate s.a. 13:25 6.1% 6.20% 6.20%

EUR Euro-Zone CPI Estimate (y-o-y) 14:30 -0.1% -0.10% -0.20%

EUR Euro-Zone Consumer Price Index - Core (y-o-y) 14:30 0.8% 0.70% 0.70%

EUR Euro-Zone Unemployment Rate 14:30 10.2% 10.20% 10.20%

USD Personal Income 18:00 0.4% 0.40% 0.40%

USD Personal Spending 18:00 1% 0.60% 0.00%

USD Real Personal Spending 18:00 0.6% 0.40% 0.00%

USD Personal Consumption Expenditure Core (m-o-m) 18:00 0.2% 0.20% 0.10%

USD Personal Consumption Expenditure Core (y-o-y) 18:00 1.6% 1.60% 1.60%

USD S&P/Case-Shiller US Home Price Index (y-o-y) 18:30 5.15% 5.32%

USD Consumer Confidence 19:30 92.6 96.20 94.70

1-Jun CNY Manufacturing PMI 6:30 50.1 50.00 50.10

CNY Non-manufacturing PMI 6:30 53.1 53.50

CNY Caixin China PMI Mfg. 7:15 49.2 49.30 49.40

JPY Nikkei Japan PMI Mfg. 7:30 47.7 47.60

EUR Markit/BME Germany Manufacturing PMI 13:25 52.1 52.40 52.40

EUR Markit Eurozone Manufacturing PMI 13:30 51.5 51.50 51.50

GBP Net Lending Sec. on Dwellings 14:00 0.3b 3.8b 7.4b

GBP Mortgage Approvals 14:00 66.3k 67.9k 70.3k

GBP Markit UK PMI Manufacturing s.a. 14:00 50.1 49.60 49.40

USD MBA Mortgage Applications 16:30 -4.1% 2.30%

USD ISM New Orders 19:30 63.5 55.80

USD Construction Spending (m-o-m) 19:30 -1.8% 0.50% 1.50%

USD ISM Manufacturing 19:30 51.3 50.60 50.80

USD ISM Prices Paid 19:30 63.5 58.00 59.00

USD U.S. Federal Reserve Releases Beige Book 23:30

2-Jun JPY Monetary Base End of period 5:20 ¥386.7t ¥386.2t

JPY Monetary Base (y-o-y) 5:20 25.5% 26.80%

JPY Consumer Confidence Index 10:30 40.80

GBP Markit/CIPS UK Construction PMI 14:00 52.00 52.00

EUR European Central Bank Rate Decision 17:15 0.00% 0.00%

EUR ECB Deposit Facility Rate 17:15 -0.40% -0.40%

EUR ECB Marginal Lending Facility 17:15 0.25% 0.25%

EUR ECB Asset Purchase Target 17:15 EU80b EU80b

USD ADP Employment Change 17:45 178k 156k

USD Continuing Claims 18:00 2152k 2163k

USD Initial Jobless Claims 18:00 270k 268k

USD DOE U.S. Crude Oil Inventories 20:30 -4226k

USD DOE Cushing OK Crude Inventory 20:30 -649k

USD DOE U.S. Gasoline Inventories 20:30 2043k

USD DOE U.S. Distillate Inventory 20:30 -1284k

3-Jun CNY Caixin China PMI Services 7:15 51.80

CNY Caixin China PMI Composite 7:15 50.80




JPY Nikkei Japan PMI Services 7:30 49.30

JPY Nikkei Japan PMI Composite 7:30 48.90

GBP Markit/CIPS UK Composite PMI 14:00 52.30 51.90

GBP Markit/CIPS UK Services PMI 14:00 542.,50 52.30

EUR Euro-Zone Retail Sales (y-o-y) 14:30 2.10% 2.10%

USD Unemployment Rate 18:00 5.00% 5.00%

USD Change in Non-farm Payrolls 18:00 170k 160k

USD Change in Private Payrolls 18:00 160k 171k

USD Average Hourly Earnings (m-o-m) 18:00 0.20% 0.30%

USD Trade Balance 18:00 -$43.0b -$40.4b

USD ISM Non-Manufacturing Composite 19:30 55.50 55.70

USD Factory Orders 19:30 0.50% 1.10%

USD Durable Goods Orders 19:30 3.40%

USD Baker Hughes U.S. Rig Count 22:30 404

Commodity Research Team Pranav Mer Sr. Manager - Research

022-61325232/ 022-61325249/ 022-31923810

[email protected] Deepa Shakdwipee Sr. Research Analyst [email protected] Sivasubramaniam Palanisamy Sr. Technical Analyst [email protected] Sunil Darekar Advisor [email protected] Bharat Jha Advisor [email protected]

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metals & energy june 2, 2016 - aditya birla group...metals & energy june 2,2016 aditya birla...

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