Commodities June 2013 Review


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Commodities June 2013 Review from VENTURA Commodities.
- VENTURA Column
- Top Stories
- Currency update
- Performance of select few commodities
- US Economy update
- Report on Aluminium
- Event Calendar
- Call performance

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Commodities June 2013 Review

  1. 1. 1 Inside this issue Inside this issue Ventura Column Top Stories Currency Update May'13 Performance of Select Few Commodities US Economy Update Report on Aluminium Event calendar Call Performance M C X FUTURES COMMODITY June 20th, 2013 Monthly ReviewVolume 7, Issue 5
  2. 2. 2 Volume Weighted Average Price (VWAP) Ammar Roopawalla Technical Analyst- Research Introduction Tick versusMinute Calculation Characteristics Uses forVWAP Conclusions Volume-Weighted Average Price (VWAP) is exactly what it sounds like: the average price weighted by volume. VWAP equals the dollar value of all trading periods divided by the total trading volume for the current day. Calculation starts when trading opens and ends when trading closes. Because it is good for the currenttradingdayonly,intradayperiodsanddataareusedinthecalculation. Traditional VWAP is based on tick data. As one can imagine, there are many ticks (trades) during each minute of the day. Active securities during active time periods can have 20-30 ticks in one minute alone. With 390 minutes in a typical commodity exchange trading day, many commodity end up with well over 5000 ticks per day. There are over 5000 commodity traded every day and these ticks start adding up exponentially. Needless to say, tick-data is very resourceintensive. There are five steps involved in the VWAP calculation. First, compute the typical price for the intraday period. This is the average of the high, low and close {(H+L+C)/3)}. Second, multiply the typical price by the period's volume. Third, create a running total of these values. This is also known as a cumulative total. Fourth, create a running total of volume (cumulative volume). Fifth,dividetherunning totalofprice-volumebytherunning totalofvolume. Like moving averages, VWAP lags price because it is an average based on past data.Themoredatathereis,thegreaterthelag.Acommodityhasbeentradingfor some 331 minutes by 3PM. As a cumulative "average", this indicator is akin to a 330 period moving average. That is a lot of past data. The 1-minute VWAP value at the end of the day is often quite close to the ending value for a 390 minute moving average. Both moving averages are based on the 1 minute bars for that day. At the close, both are based on 390 minutes of data (one full day). One cannot compare the 390 minute moving average to VWAP during the day though. A 390 minute moving average at 12:00PM will include data from the previous day. VWAP will not. Remember, VWAP calculations start fresh at the open and end at the close. 150 minutes of trading have elapsed by 12:00PM. Therefore, VWAPat12:00wouldneedtobecomparedwitha150minutemovingaverage. VWAP is used to identify liquidity points. As a volume-weighted price measure, VWAP reflects price levels weighted by volume. This can help institutions with large orders. The idea is not to disrupt the market when entering large buy or sell orders. VWAP helps these institutions determine the liquid and illiquid price pointsforaspecificsecurityoveraveryshorttimeperiod. VWAP can also be used to measure trading efficiency. After buying or selling a security, institutions or individuals can compare their price to VWAP values. A buy order executed below the VWAP value would be considered a good fill because the security was bought at a below average price. Conversely, a sell order executed above the VWAP would be deemed a good fill because it was soldatanaboveaverageprice. VWAP serves as a reference point for prices for one day. As such, it is best suited for intraday analysis. Traders can compare current prices with the VWAP values to determine the intraday trend. VWAP can also be used to determine relative value. Prices below VWAP values are relatively low for that day or specific time. Prices above VWAP values are relatively high for that day or specific time. Keep in mind that VWAP is a cumulative indicator, which meansthenumberofdatapointsprogressivelyincreasesthroughout theday. Top Stories Indiaraisesgolddutyto8pct, importslikely todrop Theimportdutyongoldhasbeenraisedto8percent. India has increased import duty on gold by a third to 8 percent as the government of the world's biggest buyer of bullion seeks to halt a surge in demand that threatens to widen a recordcurrentaccountdeficityetfurther. The increase was announced a day after the central bank acted to force domestic jewellers to buy only on a cash basis and is expected to slash imports, which had hit 162 tonnes in May,twicethemonthlyaverageof2011whentheyreachedarecord. Acombination ofsliding globalprices and regional festivalsthat traditionallycallforgoldas gifts prompted frenzied buying in April and May, mirrored in the world's other major bullion buyer, China. The price fall wiped out the impact of the government's January increase in import duty to 6 percent and the central bank's move in mid-May to make buying on credit moredifficult. India has taken a number of steps in the last two years, including hiking the import duty three times, to stem the demand for gold, but has been unable to do so. Gold imports rose 138% to $7.5 billion in April, exerting pressure on the country’s CAD, which is expected to havetouchedarecord5.1%ofgrossdomesticproductinthe2012-13fiscalyear. Finance minister P. Chidambaram has repeatedly stressed on the need for controlling India’s gold demand. Gold is the second most expensive import for the country after crude oil. The government also worries that large amounts of savings locked up in gold curtail liquidityandthereforeinvestment ininfrastructureandotherdriversoftheeconomy. This continues to demonstrate that the Indian government is determined to reduce gold imports into India. Clearly they'd like to stimulate the local market and get people mobilisingreserveswithin Indiaasopposedtoimporting them. India has for centuries relied on gold for savings, dowries and as a display of wealth. As banks have made few inroads into rural areas and consumer inflation is high, it remains the investment of choice for many. Some warned that the duty increase would simply encouragesmuggling, something Chidambaranhasalsowarnedabout. This is not going to help reduce import but smuggling will increase ... From the last few months all the wrong decisons are being taken by the government to tackle gold imports," MohitKamboj,presidentoftheBombayBullionAssociation,saidinastatement. 1 RupeehitsrecordlowagainstDollar EURO hits4monthhighagainstDollar Rupee hits record low against dollar ahead of the US Federal Reserve's meeting to decide on keeping interest rates low. Therupeeonhitanall-timeclosinglowof58.77adollar. Besides global factors, domestic issues like dollar demand from oil companies and a large public-sector bank buying dollars to fund a defence-related deal also exerted pressure on the currency. Any effort from the US Fed to scale back efforts to keep interest rates low will turn investors towards dollar, weakening all currencies. Market participants have been seeking government steps to attract foreign inflowstosupporttherupee. Foreign institutional investors have net-sold debt of $4.7 billion over 18 sessions, while outflows from the equity market have also been picking pace. In its mid-quarter review of the monetary policy, RBI said a sudden withdrawal or halt of FII inflows could be key risk for the rupee. The rupee has depreciated 9.22 per cent against the greenback since May and has been the worst-performing Asian currency during this period. Among BRICS nations, onlytheSouthAfricanrandhasdepreciatedmoreagainstthedollarsinceMay. India's high level of current account deficit (CAD) — at 6.7 per cent of GDP in the quarter endedDecember—isalsobeingcitedasamajorreasonfortherupee'srecentweakness. The euro rose to fresh four-month highs against the dollar after a report showed that the ZEWindexofGermaneconomicsentiment rosemore-than-expectedinthecurrentmonth. EUR/USD hit 1.3398, the pair's highest since February 20; the pair subsequently consolidatedat1.3382,gaining 0.13%. Currency Update
  3. 3. 3 US Economy Update 2 MAY '13 PERFORMANCE OF SELECT FEW COMMODITIES Commodity Contract 1stMay Rate 31st May Rate % Change Gold 05th Aug 26910 27046 Silver 05th Jul 44052 43616 Crude Oil 19th Jun 4902 5273 Natural Gas 25th Jun 237.2 227.7 Copper 28th Jun 367.95 413.05 0.51 7.57 12.26 -0.99 -4.01 MarchISMindexdropsto50.7from51.3 U.S.tradegapnarrowsinMarchonweakimports Retail SalesinU.S.UnexpectedlyIncreaseonBroad-BasedGains Aprilnewhomesalesup2%to454,000 HousingStartsinU.S.Fell inApriltoFive-MonthLow The Institute for Supply Management's factory index dropped to 50.7 from the prior month's 51.3. A reading of 50 is the dividing line between expansion and contraction. Other reports may show companies hired about as many workers in April as in the prior month and construction spending rose in March. Manufacturing, which makes up about 12 percent of the economy, is cooling as the need to rebuild inventories wanes and across-the-board federal budget cuts take hold. The U.S. trade deficit fell more than expected in March as imports recorded their biggest drop since 2009, the latest sign of slowing domestic demand. The Commerce Department said that the trade gap narrowed 11.0 percent to $38.8 billion. A narrower trade gap can boost growth if U.S. companies are earning more from overseas sales while U.S. consumers and businessesarespendinglessonforeignproducts. Sales at U.S. retailers unexpectedly advanced in April, helping ease concern of a sustained pullback in consumer spending that would stifle the economy. The 0.1 percent gain followed a 0.5 percent decrease in March. Retail purchases climbed by the most in four months minus receipts from service stations, where cheaper gasoline prices depressed the dollar value of sales. Lower fuel costs combined with rising stock and home values are boosting buying power. Resilient sales indicate the effects on spending from a higher payroll tax will prove temporary, corroborating forecasts of a pickup intheeconomyafterasecond-quartersoftspot. Sales of new U.S. homes edged up in April to the second-highest post-recession level, as pent-up demand, low interest rates and tight inventories of older homes lift demand. New home sales reached a seasonally adjusted annual rate of 454,000, up2.3%fromanupwardlyrevisedlevelof444,000inMarch.April'sgainrepresents a 29% improvement from the same period of 2012. Median prices jumped 15% year-on-year to $271,600, a record level. At the end of April, there were 155,000 newhomesforsale. Starts of new U.S. homes fell more than forecast in April to a five-month low, The ZEW index of German economic sentiment rose by 2.1 points to 38.5 in June from May's reading of 36.4. However, the index of current conditions fell to 8.6 from 8.9 in May. Index of euro zone economic sentiment improved to 30.6 in June from27.6inMay,aboveexpectationsforareadingof29.4. In the U.K., official data showed that the rate of consumer price inflation accelerated at a seasonally adjusted 2.7% in May, above expectations for a 2.6% increase and up from a seven month low of 2.4% in April. Core CPI, which excludes energy, food and tobacco costs, rose 2.2% up from 2% in April. Consumer prices rose 0.2% from a month earlier, compared to expectations for a 0.1%increase,afterrising0.2%inApril. indicating a pause in the industry's progress as builders slowed work on apartments. Building permits surged to an almost five-year high. Housing starts slumped 16.5 percent, the most since February 2011, to an 853,000 annualized rate after a revised 1.02 million pace in March. Building applications that are higher than the level of starts signal residential construction will rebound as near record- low mortgage rates and improving job opportunities draw buyers. A limited supply of land is a hurdle for housing even as recent strength in real estate extends beyond builderstoboostlendersandsuppliersofconstructionmaterials. Orders for U.S. durable goods increased more than forecast in April, indicating the world's largest economy will get a lift in the second half of the year as business investment strengthens. Bookings for equipment meant to last at least three years increased 3.3 percent last month after dropping 5.9 percent in March. Gains in residential construction, growing demand for autos and the need to update equipment will probably ripple throughout manufacturing, helping the economy recover from a slowdown this quarter. At the same time, government cutbacks and cooling exports are restraining demand, which means the rebound will be slow to develop. Confidence among U.S. consumers climbed in May to the highest level in more than five years as views on the economy and labor market improved. The Conference Board's index rose to 76.2, the strongest since February 2008 and exceeding the highest. The gain in sentiment coincides with rising property values and stocks that are providing a boost for household balance sheets at the same time the job market heals. The Conference Board's gauge of consumer present conditions advancedto66.7inMay,thehighest sinceMay2008. Gross domestic product, a measure of the country's total economic output, expanded at a 2.4 percent annual rate during the first quarter. A drop in government spending dragged more on the U.S. economy than initially thought in the first three months of the year, although consumer spending looked relatively resilient. The reports pointed to an economy that has held up reasonably well despite government constraints, but nevertheless faced headwinds severe enough to dissuade the U.S. FederalReservefromtrimming itsmonetarystimulusintheimmediate future. OrdersforU.S.DurableGoodsRoseMoreThanForecastinApril Consumer Confidence in U.S. Rises to Highest Since February 2008 FirstquarterGDPrevisedslightlylower;austeritybites Commodity Contract 1stMay Rate 31st May Rate % Change Nickel 28th Jun 800.9 842 Zinc 28th Jun 99.1 108.2 Kapas 30th Apr 1056.5 1100 Jeera 20th Jun 13075 13182.5 Ref.Soya oil 20th Jun 690 715.05 5.13 9.18 4.12 0.82 3.63
  4. 4. 4 3 Due to unmatched growth rates, China, which now plays the dominant role in the global aluminium market, is expected to remain the world's largest aluminium consumer throughout the next 10-15 years. Already accounting for 41% of global aluminium consumption, Chinaisforecasttoboostthisshareto52%by2025. China is now seeing a growth of the middle class – the major consumer of aluminium products. According to McKinsey Global Institute, from 2007 to 2025, the growing Chinese cities will account for30%ofglobalGDPgrowth. The transport and construction industries jointly account for 35% of totalaluminium consumptioninChina. China - Aluminium Balance Sheet Overview SoaringChineseDemand Aluminium prices that peaked in 2011 have since retreated by over a third. Aluminum prices ended last year near 18-month lows on concerns about weakening global demand for the metal, which is used in drink cans,carparts,planesandiPads. After a robust start at the beginning of this year, industrial commodities fell substantially due to lack of a clear direction from the US,theworld'slargesteconomy. Softer economic data from the US and China have depressed commodity prices, especially cyclical commodities, such as oil, base metalsandmostpreciousmetals. This year, the three-month aluminium rates on London Metal Exchange (LME) have fallen over 10 per cent to $1,857 a tonne. The price fall of close to five per cent on the Shanghai Futures Exchange (SHFE)iscomparativelymodest. There have been 2 key developments in aluminium markets since 2009. The first was the expansion of China's demand until 2011. The secondhasbeentheenormousgrowthintheroleoffinancialplayers. China is the world's fastest growing and second largest economy. Over 46% of China's soaring GDP comes from the country's rapid industrial growth. This industrial growth is predominantly driven by the massive urbanization taking place which is increasing demand for aluminium andtherawmaterialsusedinitsproduction. China- AluminiumConsumptionbyIndustries
  5. 5. 5 4 The Chinese domestic production, which grows by 9.8% per year is behind the local consumption growth, estimated at 12.9% per year, which results in the increasing share of imported aluminium. By 2015, the import of aluminium to China is expected to increase by more than 25times,reaching3-4milliontonnes. Aluminum's growing role in many markets may support the metal going forward. Many analysts and leading aluminum producers are pointing to the increased use of aluminum in the automotive industry asthemaincatalystforgrowth. Aluminum is increasingly being used to reduce the weight of vehicles thereby reducing fuel consumption. Increasing CAFE standards worldwidewillonlyincreasethetotalaluminum contentpervehicle. A “typical lightweight automobile uses around 330 pounds of aluminum and estimated that aluminum will contribute close to 500 pounds in lightweight autosgoingforward,”accordingthereportonForbes. AcceleratingDemandfromAutomotive& AviationIndustry The increased use of aluminum in the automotive industry has prompted Alcoa to expand one of their plants in Iowa. The aluminum giant will invest roughly $300 million to expand the capacity of the plant because of the increasing use of aluminum in automobiles. The plantwillboasta220-inchwidemill,thelargestintheworld Air travel simply wouldn't be possible without the use of aluminum. It makes up about 80 %of the airframe of a modern commercial aircraft. Its lightweight strength has made it invaluable to the aviation industry since 1903, when the Wright brothers used it for their famous first flight. Aluminum alloys are tailor-made for air travel as they are resistant to pressure that comes from high altitudes and trapped heat. Because the alloys are resistant to corrosion, many aviation companies elect not to paint their entire aircraft, reducing the weight and saving the companymoney. Aluminum is also an essential element in the construction of high- speed trains, subway cars, ships and rockets. In fact, the first satellite launchedin1957wasmadeofaluminum. Aluminum, by weight, is about five times more expensive than steel, but is about 40 %lighter. As a result, manufacturers still rely on steel for car parts like the chassis and the body, though Audi does have two modelsthathave100-%aluminum bodies. The $80 billion aluminium market is starting to crack under the weight of finance deals that have locked up millions of tonnes of the metal as collateralinwarehouses. Financial institutions have been buying physical aluminium and simultaneously selling futures. Stock financing is particularly attractive for banks and other such institutions, which have access to cheapfunding topayfortheinventory. For years a handful of banks have been buying up aluminium and simultaneously selling it forward for instant profit to futures market speculators, then taking advantage of cheap funding to store it at low costinwarehouses. Deutsche Bank and Standard Chartered Bank have been the two biggest participants with millions of tonnes of the metal under financing, metals and banking sources said. Credit Suisse had a sizeableholdingtoo. Aluminium financing deals can earn an investor an assured yield of at least 5 percent, not bad with interest rates around historic lows and withreturnsonequitiesanddebtuncertain. Thedealsrestonbanksortradersbuying metalfromproducers,using money borrowed at a low interest rate, and selling it forward, making use of a 'contango' market structure in which futures prices are higher thanforimmediatedelivery. Theythennegotiateadiscountedrentdealtostoreitinawarehouse. But the best way to profit from the trade, and get the cheapest storage deals, is to own a warehouse registered by the LME, the world's biggestmarketplaceforindustrialmetals. Banks Goldman Sachs and JPMorgan and trading houses Trafigura, Glencore and Noble have bought LME-registered warehouse firms in thelastthreeyears. Barclays bought a stake in one in 2011, and a source said the bank is committed todevelopingtheinvestment. An official of Russian aluminium producer Rusal says up to 70 per cent of the white metal stored at LME warehouses are marked for financialtransactions. Aluminium prices are determined today not only by an equilibrium of supply and demand, but also by the large amount of financial transactions that involve the metal. About 60–70 %of aluminium stored at the LME's warehouses is intended for financial transactions. The amount in storage, at around 5 million tonnes, has remained virtuallyunchanged forseveralyears. FinancingDeals
  6. 6. 5 CapacityOverhang& StructuralOversupply In recent times, large capacity expansions undertaken by the primary aluminium players outweighed anticipated growth in demand and createdsurpluscapacity. Aluminium have steepest upward sloping curve as compared to other basemetalswhichsuggeststhatthemetalisinexcessivesupply. 6 Despite ever more abundant surplus, producers have not taken adequate measures to balance the aluminum market. The surplus reached 889,000 tonnes in 2011, 1.5 million tonnes (Mt) in 2012 and expected to peak at 1.8 Mt in 2013. In this context, the average price of aluminium has fallen year on year by 16% in 2012 to 2,017 dollars per tonne, its lowest level since 2009, when it collapsed under the impact ofthefinancialcrisis. The World Bureau of Metal Statistics estimated aluminium overproduction in January and February 2013 at 317,100 tonnes, despite a fairly rapid increase in demand by 472,000 to 7.6 million tonnesoverthesameperiod. The aluminum market had an estimated glut of 900,000 tons last year, the sixth consecutive year of surplus and will be oversupplied until at least2018,accordingtoMorganStanely. The good news was that stocks remained flat since the start of 2013. Although inventories at LME warehouses did not change much since January, total aluminium stocks are still at an all-time record high. Total reported LME stocks currently represent approximately 10-11 weeksofconsumption. Hence, a bearish bearing on the market is also bloated LME inventory of over 5.20 mt. A Rusal official does not foresee the possibility of reductioninLMEstockpilesbefore2014. A CRU official, however, puts it at 4.6 mt. Much more non-China capacity would have bled had not physical aluminium premiums stayedintherangeof$260to$290atonne. Record High Inventories A Barclays paper says world aluminium production this year will climb to 50.8 mt. This will then be 1.2 mt in excess of demand. Aluminium inventories in warehouses monitored by the London Metal Exchange (LME)hitarecordhigh of5.28milliontonnesonJune17,2013. LME data showed stocks rose by 59,600 tonnes to 5,279,425 tonnes, the highest since inventories touched a record of 5,241,525 tonnes on Dec. 20, 2012 The aluminium sector is burdened by over- productionandmarketsurpluses. With many commodity prices in retreat over the past six months, the newly elevated production cost base will prevent further substantial fallsinpricesformostindustrialcommodities. Historically, cost factors appear to have been highly dynamic, with the marginal cost of production tending to move up with spot prices and thenfallingasthecycleturnsdown. Perhaps the largest driver of costs remains the value of exchange rates in the big producing countries. As millions of tonnes of global capacity are losing money thanks to high production costs and low metalsprices. Aluminum producers have been sheltered somewhat by record high physical premiums, which are paid over the benchmark London Metal Exchangecashpricetosecurephysicalaluminum fordelivery. While premiums are coming to the rescue of smelters, the fact remains that reliance on these makes the industry incredibly vulnerable. After all, premiums will stay high as long as financing dealsfindfavourwithfundsandspeculators. However, the reliance on high physical premiums makes the industry incredibly vulnerable. Premiums will stay high until so-called financing deals break down or delivery backlogs at warehouses approvedbytheLMEarereduced. Rising energy prices and the availability of bauxite and alumina are cited as other reason for the rising cost of production. Labor and energy costs have put European aluminum companies at a disadvantagewithSpanishsmelterstheleastproductiveinEurope. Prices BelowProductionCosts
  7. 7. 7 6 ReigningintheSupplyGlut Skyrocketing aluminium output growth, predominantly in China, has ledtoaglobalcrisisandmarketoverheating.Priceshavefallen(to$1800 per tonne), while global output shrank to a four-month low in March. At present, the market price is at a level where about 30 % of producers are unprofitable. This means that people are forced to significantly reducecapitalexpenditures,whichleadstostagnationoftheindustry. Even though Chinese manufacturers incurred big losses due to overcapacity and falling prices, output of primary aluminium continued to grow in China at the beginning of this year. If it hadn't been for China, output of the metal would have dropped by 3 percent, accordingtoInternationalAluminium Institute experts. Global companies, excluding Chinese producers, have cut output by about1.3millionmetrictonsofsinceDecember2011. The Russian aluminium giant – number one in the world in terms of output – promised to slash 300,000 tonnes of capacity -.a 7 % drop - and production dropped 4 % in the first quarter of this year. Overall, the company expects closures of 1–1.5 million tonnes of capacity worldwide, with the exception of China, which should help increase prices to $2200–2300 per tonne and see a real decrease in output as soonasinthesecondquarter. ButrivalAlcoasaidthismonthitcouldshutdownasmuchasanother11% of smelting capacity-460,000 tonnes targeting higher-cost facilities amid weakprices.Thecompany,whichalreadyhas568,000tonnes,or13 percent, of its annual smelting capacity sitting idle, said it will review 460,000 tonnesofoperatingcapacityforcurtailmentoverthenext15months. Now, China is getting more serious about tackling a glut of aluminium production capacity and is likely to block plans to build more than 10 milliontonnesofnewcapacityinthefarwesternregionofXinjiang China has cut output 1 million metric tons this year and will probably reduce it 2 million tons by 2015, with about 24 million tons produced this year Chalco, the Chinese state aluminium giant that is one of the world's top producers of the metal, announced that it planned to close down temporarily 380,000 tonnes of production capacity – or a tenth ofitstotaloutput. In another sign of Beijing getting more serious, the powerful National Development and Reform Commission and the Ministry of Industry and Information Technology issued a joint notice in early May reinforcing the policy. Local governments must stop new projects and report any illegally built existing projects to the central government by theendofJune,accordingtothenotice. The planning commission and the industry ministry are also working on another set of guidelines to spell out penalties that could be releasedwithin twomonths. A subdued trend is likely to continue in industrial commodities until the third quarter of the current calendar year, due to weak global economic sentiment which has reduced their demand from consumer industries. Thecurrentyearwillremainchallengingforthealuminium industry. Negative sentiment, uncertainty about the global economy, overcapacity and high stocks weigh heavily on the aluminium sector. The aluminium market struggles with oversupply. Several initiatives have already been taken to tackle the problem, but it will take some timebeforetheysorttheirfulleffect. At the current (relatively) low aluminium price, the profitability of high- cost producers is at risk. However, physical aluminium demand is expectedtostayrobust,withaluminiumconsumptioninChinatoriseby 11% y-o-y in 2013 and demand in the US to increase by 4%. Prices will rise from their current low levels. Demand in Europe will remain sluggish. The industry will get back into shape only if aluminium prices claw back to $2,200 to $2,300 a tonne. That will, however, call for a much tighter productiondisciplinebothwithin andoutsideChina. The Chinese government wants to tackle overcapacity and states that itwilleliminateobsoletealuminium plants. By the end of 2015, the top 10 smelters must account for 90% of the country's total production capacity. Despite the high stock situation and the burden of overcapacity, we think aluminium price will strengthen during theforecastperiod,butthepacewillbeslow. Global demand is expected to grow by 6.1% on average until 2015. Not only demand from the aerospace industry in emerging countries will increase, also demand from other sectors will get an impulse. The car manufacturing sector is becoming an increasingly important end user of aluminium. Fuel efficiency of cars is important and this can be accomplished by reducing the weight of cars (by replacing steel for aluminium). Positive changes are also expected for packaging and electric engineering. The aluminium can and foil sectors (which account for a combined 13 % of primary aluminium consumption) will keep growing as a result of population growth and the increased use of aluminium in those sectors. Rusal estimates growth in that sector at 4–5%in2013. Outlook 6 NAME TREND CMP SUPPORT KEY LEVELS RESISTANCE S1 S2 S3 R1 R2 R3 ALUMINUM BULLISH 105.9 101.5 96 90 112 120 131 140
  8. 8. 8 67747555 / 67547298 CALL PERFOMANCE FOR MAY 2013 TotalNo.ofCalls:.................................................... 114 TargetAchieved:....................................................... 68 StoplossTriggered:.................................................... 46 SuccessRatio:...................................................... 60% US Event Calendar for the period 21st June to 20th July 2013 8th July • • • 15th July • • • China CPI y/y China GDP q/y German Industrial Production m/m Core Retail Sales m/m Empire State Manufacturing Index TIC Long-Term Purchases 25th June • • • • 2nd July • Core Durable Goods Orders m/m CB Consumer Confidence New Home Sales Richmond Manufacturing Index Factory Orders m/m 16th July • • • EUR CPI m/m Core CPI m/m Industrial Production m/m 26th June • • 3rd July • • • • • Crude Oil Inventories Final GDP q/q EUR Retail Sales m/m ADP Non-Farm Employment Change Trade Balance ISM Non-Manufacturing PMI Crude Oil Inventories 10th July • • • • 17th July • • • • China Trade Balance Crude Oil Inventories FOMC Meeting Minutes Federal Budget Balance Building Permits Housing Starts Crude Oil Inventories Beige Book 27th June • • • • • • • 4th July • • • German Retail Sales m/m German Unemployment Change EU Economic Summit Unemployment Claims Personal Spending m/m Pending Home Sales m/m Natural Gas Storage Minimum Bid Rate ECB Press Conference Unemployment Claims 11th July • • • 18th July • • • Unemployment Claims Import Prices m/m Natural Gas Storage Unemployment Claims Philly Fed Manufacturing Index Natural Gas Storage 21st June • 28th June • • • EU Current Account German Prelim CPI m/m Chicago PMI Revised UoM Consumer Sentiment 5th July • • • • German Factory Orders m/m Non-Farm Employment Change Unemployment Rate Average Hourly Earnings m/m 12th July • • 19th July • • PPI m/m PrelimUoMConsumer Sentiment German PPI m/m German ZEW Economic Sentiment 24th June • 1st July • • • • German Ifo Business Climate China Manufacturing PMI HSBC Final Manufacturing PMI EUR Unemployment Rate ISM Manufacturing PMI M O N D A Y T U E S D A Y W E D N E S D A Y T H U R S D A Y F R I D A Y