Commodities stumble on weak China GDP data

China's GDP numbers for the first quarter of 2013 stumbled the prices of the commodities and stocks worldwide. The reports released by the National Bureau of Statistics stated the growth in the GDP of China for Q1 2013 to be at 7.7 percent from the previous year. The economy grew at a slower pace in the first quarter than the growth rate of 7. 9% witnessed in the last quarter of the previous year. The expected GDP growth rate for the first quarter was 8 percent. 

In a separate report, contrary to the expectations of a 10% growth in the Industrial output,  the Industrial Output growth of China for the month of March stood at 8.9 percent on the previous year. Industrial output for the month of February was 9.9%.  Further underpinning the growth recovery in China, the World Bank downgraded the growth forecast of China by 0.1 percent to 8.3%. China stands out to be the largest consumer of Copper in the world.

At the MCX Copper prices for its April end Contract contracted by 2.03% from its previous closing price of 404.5, the metal closed at 396.1 after registering a high of 402.65 and a low of 386.50; this was also the  all time low for the contract. On the COMEX the metal traded 0.29% higher at 327.30 USD/lb for its May,13 contract.

Meanwhile Crude Oil touched its lowest level so far this year on the wake of concerns over its second largest consumer. WTI for May delivery decreased by 2.8 percent to close at $88.71 at the NYMEX, the lowest since Dec, 24. At the MCX Crude prices were down by 2.57 percent at 4847, it made an intra-day high of 4956 and a low of 4792. 

Demand for Crude Oil in China seems bleak. China's demand for crude oil for the month of March grew by 2.7 percent y-o-y to 9.77 million barrels a day, however the demand was weaker than 10.2 million barrels a day experienced in the month of February. Demand in the month of March was indeed at its lowest level since last October.

Commodities falter as US Retail Sales decline...

Against the market expectation of a 0.1% fall, the US retail sales for the month of March declined by 0.4%; its highest in the last nine months. 

The US retail and food services for the month of March stood at $418.3 billion, a drop of 0.4 percent from February, but was 2.8 percent higher from March 2012. Retail sales for the months January and February, 2013 were revised to 1.0% from 1.1% while the auto and other motor vehicle dealers were up by 7.4% year-on-year.

In a separate report compiled by Thomson Reuters/ University of Michigan the preliminary index of consumer sentiment declined from 78.6 in March to 72.3 in the April. The decline in the consumer sentiment index refers to a decline in the consumer spending. 

On the MCX Copper for its April end contract closed at Rs. 404.65, down by 1.76 percent form its previous closing price of Rs. 411.90. The red metal made a high of Rs.413.90 and a low of Rs.402.85, while its open interest stood at 30905 lots.

COMEX Copper was down by 2.43% at 335 USD/lb for its May 13 contract. At the LME warehouse stock for Copper increased by 3475 tons to 593650 tons.

View on Natural Gas:

Natural Gas has been hovering in  the trading range of  $4.004 to $4.181, in INR the range has been 222-229 and is expected to be within the same range for at least one more week. Any break out above 229 might drag the price up to Rs 234- 239 any break put below Rs 220 might drag the price of Natural Gas below 212 and 202.

View for Today's Trade:  Buy N.Gas around 227 with a strict stop loss below 225.50 with a target 229.5 and 230.

CHILE MINING HALTED

Copper goes as Chile goes. Chile being the largest producer of Copper in the world is its primary driver of  prices globally. Employees of Anglo American Plc, BHP Billiton Ltd and stated owned Codelco are on strike for the next 24 hours.

Having faced no trouble in the past year over copper production, the Copper mine workers are vouching for a greater job security and until then they have vowed to halt any mining activity in Chile. The strike become more conspicuous after the workers of the world's largest copper producing company- Codelco asseverated their demands.

Prices of Copper on the MCX for its April end contract surged higher by 0.57% on the 8th of April. Copper made a high of 410.15 with an open interest of 32493 lots.

Viw on Natural Gas for Intra day trading

One can consider selling Natural gas at the rate of 228 with strict s/l above 230.70 for the Tgt 225 & 222.The view is based on Technical Analysis.

COPPER & CRUDE OIL DRIVERS FOR APRIL,5

IF high unemployment levels alongside weak HSBC PMI of the Euro-zone and the feeble UK HSBC PMI data was not enough to slide down the prices of commodities, then lower than expected US non-farm payroll data did impede on their prices.

Earlier this month Copper and Crude has already faced the adversary of low HSBC PMI data of UK and the entire Euro-zone, further the unemployment levels of the Euro-zone for February came out to be as high as 12%. The increase in the US jobless claims of 28,000 was also disheartening to the traders and investors.

The US Non-farm payroll data for March edged up 88,000 against the expected figure of 193,000. The unemployment however did improve slightly from 7.7% in Feb to 7.6% in March. The weak data was enough to pull down the prices of the red metal and crude.

Copper on the MCX for its April end contract closed at Rs.406.25, a change of -0.68 percent from its previous closing price of Rs. 409.05. Copper made a high of Rs. 409.75 and a low of Rs.405.3 whereas its Open Interest stood at 34783(lots). For its June delivery Copper closed at Rs.412.9 from its PCP of Rs. 415.55- a decrease of 0.67 percent. The June contract made high of Rs. 416.15 and a low of Rs.412.20 with an OI of 4885 (lots).  

Copper inventories at the LME rose by 6850 tons to 579175 tons.  At the COMEX Copper for its May13 contract closed at 334.40 USD/lb with a change of -0.22%.  

Crude Oil for its April contract closed at Rs. 5087 with a change of -0.14% from its previous closing price of Rs.5094. It made a high of Rs. 5130 and a low of Rs.5056 with an OI of 22318 (lots). At the NYMEX Crude Oil (WTI) was priced at 92.70 USD/bbl with a percentage change of -0.60% for its May 13 contract. For the same May 13 contract Crude Oil (Brent) was priced at 104.12 USD/bbl with a change of -2.09%.  

The drop in the prices of Crude was capped by a weakening Dollar; determined by the speculation that the Fed Reserve would continue with quantitative easing. The US Dollar Index dropped to 82.57, a change of -0.18%. The Dollar fell to $1.304 per dollar, its lowest level since March, 25. US Crude inventory was at 388.6 million barrels with an increase of 2.71 million barrels by the last week of March. The US crude stockpiles were at its highest level since 1990.  

Copper and Crude

Copper on the MCX for its April end contract closed at Rs 409.0/kg with a change of 1.41% from its previous closing price of Rs 403.35/kg after registering a high of Rs 410.95/kg and a low of Rs 401.45/kg. Its open interest stood at 32246. For its June contract Copper closed at Rs 415.55/kg from its previous closing price of Rs 410.05/kg, it made a high of Rs 417.20/kg and a low of Rs. 408.20/kg with an open interest of 4759 lots. At the COMEX Copper closed at 335.50 USD/lb, marking an increase of 0.03% for it May13 contract.

The increase in Copper prices was a resultant of strong demand from China. China’s official PMI data for its non manufacturing sector was marked at 55.6 in March from 54.5 of February.  The increase in the figure was due to the buoyancy in the construction sector marking well for the modest recovery in the world’s second largest economy and the largest consumer of copper. Chinese GDP is expected to increase by year on year 8.1% in Q1, faster than its 13 year low rate of 7.8% in 2012. Meanwhile the consumer inflation for China is expected to drop down at 2.4% from its previous 3.2 percent.

Crude oil at the MCX closed at Rs 5094 from its previous closing price of Rs 5199 sliding by 1.71%.  Its open interest stood at 24049. Crude oil prices at the MYMEX dropped by 2.31% to trade at 92.27 barrel. The prices dropped on the wake of high jobless claims in the US, the latest official data revealed that a greater number of individuals claimed to be jobless in the last week than expected. The jobless claims increased by 28,000 to 385,000 contrary to the expectation of drop of 7,000 claims.

The crude inventories increased by 2.71 million barrels in the last week of March above the market expectation of 2.2 million barrels. The total crude inventories stood at 388.6 million barrels in the last week.

Crude prices are expected to be bearish. US inventories have climbed to a 22 year high and amidst economic concerns and high jobless data the prices of crude is set to be in the red. However the US nonfarm payroll data will be in focus to trade for the day.