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4. oil and gas prices

We d n e s d ay 0 4 , Fe b r ua r y 2015
News &
Report Analysis
Currency Market
Precious Metal
Base Metal
Energy Market
 Coal auction: Govt gets 176 technical
bids for 23 mines
 Stakes sale plans in NMDC, SAIL,
CIL get weak response from
global investment bankers
 JSPL cuts 750 jobs after reporting Rs
1,675-cr loss in Dec qtr
 NGT orders closure of 17 steel
pickling units in Delhi
 Indian Steelmakers to cut prices on
imports glut
2
Wednesday 04, February 2015
Daily
MMR Landed Prices
London Metal Exchange : Tuesday 03, February 2015
Pr. Sell
(1)
Morning Session
Buy
Sell * (2)
Afternoon Session
Buy
Sell
Kerb
Change
(2) - (1)
Value
Stk(tns)
change
$/ton
Rs/ton
Copper Grade A
Spot
5535.50
5690.00
5695.00
5663.00
5663.50
5719.00
159.5
2,50,250 MMR LP
3-mth
5506.00
5669.50
5670.00
5637.00
5638.00
5690.00
164.0
225 14-D MA
3,72,211
PP (HCL)
4,47,324
Average
10-days - 5561.20
20-days - 5732.40
30-days - 5932.70
3,81,379
Tin High Grade
Spot
18975.00
18925.00
18950.00
18934.00
18935.00
18987.00
-25.0
11,840
--
--
3-mth
19025.00
18975.00
19000.00
18924.00
18975.00
19025.00
-25.0
0
--
--
--
--
Average
10-days - 19299
20-days - 19402
30-days - 19337.30
--
Lead
Spot
1839.00
1847.00
1848.00
1847.00
1848.00
1835.75
9.0
2,14,350 MMR LP
3-mth
1856.00
1861.00
1862.00
1861.00
1862.00
1850.00
6.0
-500 14-D MA
1,28,130
PP (HZL)
1,37,600
1,52,962
Average
10-days - 1847.50
20-days - 1829.50
30-days - 1834.40
1,28,320
Zinc Special High Grade
Spot
2123.00
2145.50
2146.50
2152.00
2153.00
2148.00
23.5
6,25,225 MMR LP
3-mth
2128.50
2152.00
2153.00
2158.00
2159.00
2155.00
24.5
-2850 14-D MA
1,50,625
PP (HZL)
1,57,400
Average
10-days - 2113.40
20-days - 2104.20
30-days - 2122.60
Aluminium
Spot
1852.00
1869.50
1870.00
1877.00
1878.00
1874.00
18.0
40,33,675 MMR LP
1,46,028
3-mth
1865.50
1888.50
1889.50
1893.00
1894.00
1891.00
24.0
-7400 14-D MA
1,44,064
Average
10-days - 1842.50
20-days - 1811
30-days - 1818.40
PP (Nalco)
1,53,400
Aluminium Alloy
Spot
1840.00
1830.00
1840.00
NA
NA
NA
0.0
26,500
3-mth
1850.00
1840.00
1850.00
NA
NA
NA
0.0
0
Average
10-days - 1851
20-days - 1833
30-days - 1843.20
Nickel
Spot
15050.00
15370.00
15375.00
15419.00
15420.00
15255.50
325.0
4,24,572
--
--
3-mth
15125.00
15375.00
15400.00
15474.00
15475.00
15310.00
275.0
-402
--
--
--
-01-Jan
09-Jan
Average
10-days - 14779
20-days - 14793.30
30-days - 14905
Note: 1. MMR LP = MMR Landed Prices, excluding excise duty. 2. PP = Producer Prices ex-smelter, excl. excise
Copper
Aluminium
Minor Metals ($/LB)
Antimony
99.65%
9,100
Cadmium
99.80%
90.00
Cobalt HG Moly.oxide
99.80%
14.00
9.00
Tantalite
30% Ta2O5
81.00
Titanium Ferro-vana
Con. Ti02
550.00
24.90
Silicon Zinc
Lead
2,050
02-Feb
02-Feb
Week ended Avg of Steel Prices: 31/01/2015 (Incl. Excise duty)
Sponge Iron
Pig Iron
Ferro Alloys :
Mandi
26,900 HMS
31,800 CRP(LSLP)
Mumbai Mkt rates in kgs :
Mumbai
Kolkata
29,400
29,400
31,300
Ferro Moly 1000
Delhi
Chennai
Bhiwandi
29,800
28,000
MS Ingots
38,400
30,000
Ferro Silicon 83
Titanium
171
Indicative Domestic Market Rates (Rs./kg)
Mumbai
03-Feb
Prev
Virgin Metals
Copper Pat
Copper W/Bar
Delhi
03-Feb
Comex Copper (cents/lb)
Prev
Chennai
03-Feb
Prev
Jan'15
- Feb'15
- Mar'15
-
-443.0
-438.0
400.0
-
399.0
-
Alum Ingot
Zinc Slab
Lead Ingot
Tin Slab
Nickel (4x4)
Scrap
Copper Heavy
Copper Uten.
165.0
172.0
134.0
1,460.0
1,085.0
163.0
173.0
135.0
1,460.0
1,075.0
164.0
184.0
130.0
1,435.0
1,085.0
164.0
183.0
130.0
1,435.0
1,075.0
417.0
390.0
414.0
390.0
---
---
160.0
-
Copper Mixed
Brass Utensil
Brass Huny
Brass Sheet
Alum Utensil
-315.0
310.0
320.0
133.0
-307.0
310.0
318.0
132.0
385.0
--135.0
384.0
--135.0
-
159.0
-
Metal
Gold Std
Silver
Gold
Silver
Gold
Silver
- Buy
- Sell
- Buy
Rate
260.00
258.15
258.30
Change
3.5
3.7
3.6
Kanpur
38,000
Durgapur
34,400
Comex Al (cents/lb)
Rate
-
Change
-
Precious Metals : Indicative Rates
Market
Mumbai
Mumbai
London
London
Comex
Comex
Unit
Rs./10g
Rs./kg
$/tr.oz.
$/tr.oz.
$/tr.oz.
$/tr.oz.
03-Feb
28,150
38,800
1,264.3
17.59
1,276.2
17.30
Prev
28,300
38,800
1,272.5
17.22
1,276.2
17.23
Forex: Feb 03, 2015 (Rs/Unit Currency)
USD
61.75
61.66
EURO
70.10
GBP
93.00
92.90
SGD
45.72
----AUD
47.40
YEN
0.5258
0.5250
SFR
66.69
70.00
45.62
47.37
66.55
Customs Notified Rates: Jan. 16, 2015 [Rs.(Imp/Exp)]: US$ 62.30/61.30;Pound Sterling 95.35/93.20;Euro 73.70/71.90
3
Wednesday 04, February 2015
Asian share markets opened at higher level
17:00
16:00
15:00
in December, but a smaller-than-previously
14:00
factory goods fell for a fifth straight month
13:00
yesterday includes the new orders for U.S.
12:00
Among the global economy update announced
11:00
the U.S. dollar, Greece’s sovereign bonds.
USD/INR - 03/02/15
61.63
61.66
61.69
61.72
61.75
61.78
61.81
61.84
9:00
on Wednesday as revived risk sentiment dented
10:00
Daily
reported drop in business spending plans
supported views of a rebound in the months
USD/INR Overnight VAR
Data releases today
0.3496
Forecast
Previous
241K
ahead. Other data on Tuesday showing fairly
USD ADP Non-Farm Empl.Chan
224K
brisk sales in January by the country's leading
USD Final Services PMI
51.3
54.0
automobile manufactures also offered a silver
Source : Mecklai Financial
lining for a sector that has taken a hit from weak
orders data in addition to Monday's weak U.S.
global demand and falling crude oil prices.
manufacturing reports, dampening optimism
China's services sector grew at the slowest
over the strength of the country's recovery.
pace in six months in January as growth in new
Also, rise in risk appetite in the markets after
business weakened, a private survey showed,
concerns by default by Greece eased acted as a
raising expectations that policymakers may
negative factor. The currency touched an intra-
unveil more stimulus steps to avert a sharper
day low of 93.39 and closed at 93.72 on Tuesday.
slowdown
second-largest
The dollar nursed broad losses on Wednesday,
economy. The HSBC/Markit Services Purchasing
having suffered its biggest one-day fall in over a
Managers' Index(PMI) slowed to 51.8 last month
year as it came under pressure from many fronts
- the weakest since July 2014 - from December's
amid oil-fueled gains by commodity currencies.
53.4, but remained above the 50-point level that
Buyers snapped up commodity currencies as
separates growth from contraction in activity on
the oil market extended its recovery and copper
a monthly basis. The weakening performance of
prices also surged.
in
the
world's
the services sector, which has helped cushion
The euro's rally from Tuesday's low of $1.1312
the broader impact of a cooling manufacturing
went as far as $1.1534. It last traded at $1.1470,
sector, could fan market concerns about China's
well off an 11-year trough of $1.1098 set last
economic slowdown in 2015.
week. That contributed to a 0.9 percent slide in
The Board of Reserve Bank of Australia
the dollar index, its biggest one-day fall since
decided to lower the cash rate by 25 basis points
October, 2013. The index last traded at 93.758
to 2.25 per cent, effective 4 February 2015, at its
after stooping to 93.25 overnight.
meeting today. Growth in the global economy
The Australian dollar hovered around 78 U.S.
continued at a moderate pace in 2014.
cents, staging an impressive turnaround from
Currency Market
a slump to a six year trough of $0.7627. The
Canadian dollar jumped for a second session to
The US Dollar Index (DX) plunged by 1.1
two-week highs of C$1.2353 per U.S. dollar. It last
percent yesterday after disappointing U.S. factory
traded at C$1.2428. Sterling climbed to $1.5198,
4
Wednesday 04, February 2015
Daily
6 mth
LIBOR
Major
Currencies
Today’s
Crosses
Spot
Cash
v/s INR
0.36
USD / INR
-
ATM Options (put/call)
0.15
Forward Rates v/s INR (Export/ Import)
February
March
April
July
October
January
61.61/ 62
61.58/ 59
61.89/ 92
62.29/ 32
62.72/ 76
63.83/ 87
64.91/ 95
65.89/ 93
-
-
-
0.00/0.48
0.00/0.73
0.00/0.91
0.00/1.34
0.00/1.65
0.00/1.92
EUR / USD USD /
JPY(100) GBP / USD
1.1466
70.64/ 65
70.61/ 62
70.98/ 01
71.46/ 49
71.97/ 01
73.33/ 37
74.70/ 74
76.00/ 03
0.14
USD / CHF AUD / USD
117.86
52.27/ 28
52.24/ 25
52.52/ 55
52.88/ 91
53.27/ 30
54.28/ 32
55.30/ 33
56.26/ 30
0.68
GBP / USD
1.5154
93.36/ 38
93.31/ 33
93.79/ 74
94.36/ 26
94.99/ 71
96.61/ 95
98.21/ 01
99.69/ 92
-0.76
USD / CHF
0.9254
66.56/ 58
66.53/ 55
66.87/ 90
67.49/ 50
68.07/ 08
69.57/ 57
71.10/ 03
72.52/ 39
3.06
AUD / USD
0.7813
48.15/ 16
48.13/ 14
48.36/ 39
48.67/ 71
49.01/ 05
49.87/ 92
50.72/ 76
51.48/ 53
Source : Mecklai Financial
pulling further away from a near 19-month low
foreign debt and proposed ending a standoff
of $1.4952 set last month. The British currency
with its official creditors by swapping the debt
had posted its best session in nearly 10 months
for growth-linked bond.
on Tuesday.
"Appetite for risk now appears higher and
Against the yen, the dollar fared better as
that is spurring some rotation of funds away
U.S. Treasury yields jumped and a rally by Tokyo
from the safe havens in the yen and gold to
shares lessened the allure of the safe-haven
riskier assets such as equities and the euro,"
Japanese currency. The greenback was rose 0.3
Phillip Futures investment analyst Howie Lee
percent to 117.95, having recovered from a low
said in a note.
of 116.87.
The Indian Rupee appreciated by 0.2 percent
yesterday on persistent selling of dollars by
"Barring any downside black swan events, it
is now increasingly unlikely that we could see
gold racing for $1,300 again in the near future."
banks and exporters on a day the Reserve Bank
Spot gold has steadily fallen since hitting a
of India (RBI) kept interest rates unchanged. The
five-month peak of $1,306.20 on Jan. 22, paring
RBI left repo rate unchanged at 7.75 per cent,
the metal's year-to-date gain to less than 7
but cut SLR or statutory liquidity ratio by 50 bps
percent. U.S. gold for April delivery was also
to 21.50 per cent from 22 per cent.
nearly flat at $1,261.50 an ounce. Spot silver
Precious Metal
prices rose by 0.5 percent to $17.3/oz on Tuesday
Gold steadied on Wednesday after falling
in contrary to the fall in gold prices. Weakness in
the dollar index and strength in the base metals
more than 1 percent in the previous session as
Greece's plan to end a standoff with creditors
lifted the appetite for risky assets such as
Market Highlights - Gold (% change)
Gold
Unit
Last
equities. Spot gold was up 0.2 percent at
$1,262.04 an ounce by 0403 GMT, after falling
1.2 percent on Tuesday, which marked gold's
fourth drop in five sessions. Greece's new
government dropped calls for a write-off of its
Gold (Spot)
Gold
(Spot -Mumbai)
Comex Gold
MCX Gold
(Feb’15)
Prev.
day
as on February 3, 2015
WoW MoM
YoY
$/oz
1259.7
-1.18
-1.7
4.7
1.3
Rs/10
gms
27900.0
0.00
0.4
4.4
-6.4
$/oz
1260.6
0.07
-2.0
4.1
0.0
Rs /10
gms
27498.0
-1.23
#N/A
1.7
-6.7
Source: Angel Broking
Daily
5
Wednesday 04, February 2015
pack acted as a positive factor for prices.
this proposal will be accepted or not by the EU
The world's largest gold-backed exchange-
and the Germany is a big question. Among
traded fund, SPDR Gold Trust, said its holdings
the base metal, the offer price of premium
slipped to 24.59 million ounces on Tuesday
aluminum for European buyers has been down
from 24.65 million ounces the day before, which
by around US$30-40 per ton to US$380-390 per
was the highest level since October. In today’s
ton last week, according to the news from CRU
session, gold prices to trade lower on Greece’s
GROUP. Banks are providing the raw material
proposal to the creditors to swap it debt with
origin of Russian with unpaid customs duties,
growth linked bonds has cheered the markets
making the spreads narrower. It is expected that
reducing the uncertainty in turn investors
the dropping demand for aluminum in Russia
dumping the yellow metal.
should boost Russian aluminum export.
Base Metal
Energy Market
Base metals on the LME traded higher on
Oil prices fell on Wednesday as renewed
Tuesday in tandem with rise in crude oil prices.
concerns over global demand and high stock
This coupled with optimistic situation in Greece
levels halted a rally that pushed up prices by
as they move towards swapping its old debt
about 19 percent over the past four sessions.
with growth linked bonds lifted the base metals
The recent rebound was driven by hopes that
pack. Speculation that China could aggressive
prices may have hit a bottom after a seven-
push the monetary easing in order to lift the
month rout slashed oil futures by nearly 60
economy also acted as a positive factor. In
percent and prompted major energy firms to
the Indian markets, all the base metals traded
cut spending on new production. But weak
higher in line with strength in the international
data from key consumer China has rekindled
markets. The benchmark industrial metal,
demand concerns, dragging on oil prices.
Copper prices rose by around 4 percent on
The outlook for oil demand has also been
rising global equities coupled with hopes that
muddied by recent data showing China's
weak Chinese factory growth would spur more
services sector grew at the slowest pace in six
stimulus measures.
months in January. However, some say lower
Prices got a boost by soaring oil prices for
last four trading session and expectations that
oil prices will spur economic growth, which will
boost demand for commodities including oil.
China would use stimulus measures to kickstart its economy. In today’s intra-day session,
Copper prices to trade higher as slowdown in
China, the biggest consumer of base metals
has strengthened calls for more aggressive
monetary and fiscal stimulus to boost the
economy as suggested by Angel Commodities.
Greece proposal to swap its deal with growth
linked bonds has cheered the markets, although
Market Highlights - Crude Oil (% change)
as on February 3, 2015
Crude Oil
Unit
Last Prev.
day
WoW
MoM
YoY
Brent (Spot)
$/bbl
53.8
5.2
18.3
4.9 -50.8
Nymex Crude
(Mar ’ 15)
$/bbl
53.1
7.0
14.8
10.7 -45.0
ICE Brent Crude
(Mar’15)
$/bbl
57.9
5.8
20.2
9.0 -45.6
MCX Crude
(Feb ’15)
Rs/bbl
3226.0
5.7
#N/A
0.3 -47.7
Source: Angel Broking
Daily
Wednesday 04, February 2015
"Low oil prices and cheap money will lead
to stronger global economic growth and much
stronger oil demand than conventional wisdom
would suggest," PIRA Energy said. It forecasts
global oil demand to grow by 1.5 million barrels per
day in 2015, but warns the current supply surplus
will overwhelm demand for the next six months.
Brent crude was 50 cents lower at $57.41 a barrel
by 0336 GMT (10.36 p.m. EST), after gaining almost
6 percent on Tuesday and off a near six-year low of
$45.19 reached in mid-January.
As per Angel Commodities research expect
oil prices to trade positive today continuing its
momentum from the last four trading session.
Greece’s proposal to its Euro partners to swap
block awards by the Supreme Court.
its debt by linking it to growth linked bonds
"176 technical bids have been received for
is a move in the right direction. However,
23 coal blocks under Schedule II which were
acceptance of this proposal from Germany is
put on auction for private sector. The response
something that needs a close watch as it is
has been as per our expectation and most of
reluctant to accept the proposal.
the major players have participated in it," Coal
News Update &
Analysis
Coal auction: Govt gets 176
technical bids for 23 mines
JSPL and Monnet Ispat are among the
Secretary Anil Swarup told reporters here after
the technical bids were opened. Sources said
the bidders include JSPL while a spokesperson
for Monnet Ispat confirmed that the company has
submitted its technical bid. "Auction process will
be web cast to maintain transparency," Swarup
said after the technical bids were opened today in
bidders for 23 coal blocks on offer in the first
the presence of bidders.
tranche of the ongoing auction, for which the
Stakes sale plans in NMDC,
SAIL, CIL get weak response
from global investment
bankers
government received a total of 176 preliminary
bids on Tuesday. While the exact value of
the bids could not be ascertained, industry
estimates suggest these blocks may fetch tens
of thousands of crores of rupees in revenue.
The government officials said the response
have been as per expectations and most
of the major players from private sector
are participating in the auction, which was
necessitated after cancellation of earlier coal
The government's plans to push through
stake sales in four more public sector firms by
March-end has not met with much interest
from foreign investment bankers. "None of the
global I-bankers, including those who advised
the recent transactions to offload government
stakes in SAIL and Coal India, have submitted
6
Daily
Wednesday 04, February 2015
bids to advise the government for its 10% share
sale in NMDC," said a top banker with a leading
global investment bank. In the Rs 22,500-crore
share sale of Coal India that closed last week, four
foreign investment banks — Credit Suisse First
Boston (CSFB), Deutsche Bank, Bank of America
Merrill Lynch and Goldman Sachs — advised
the government. Similarly, in the SAIL stake sale,
three foreign investment bankers had taken on
the mandate to sell the government's holdings.
While the government had intended to
appoint up to five investment bankers for the
proposed NMDC transaction, only four Indian
firms — SBI Caps, Kotak Mahindra Capital,
I-Sec and Axis Capital — have put in their bids.
Technical bids were opened on Tuesday and
financial bids will be opened on Wednesday.
The deadline for receiving bids for three more
offers — Indian Oil (10%), Bhel (5%) and Nalco
(10%) —falls this week. According to another
top banker, bankers are expected to pitch for
Indian Oil. "In the other two cases of Bhel and
Nalco, it is likely to get a lukewarm response from
the I-bankers," he added. The appointment of
bankers is expected to completed by early next
week and road shows will start in the third week
of February for these four companies. Meanwhile,
the government intends to complete the sale of a
5% stake in Power Finance Corporation (PFC) and
Rural Electrification Corporation (REC) in the next
few weeks.
JSPL cuts 750 jobs after
reporting Rs 1,675-cr loss in
Dec qtr
Steel maker Jindal Steel and Power (JSPL)
has cut 750 jobs, as the company reported Rs
1,675-crore consolidated loss for the quarter
ended December 2014. The loss is attributed
to the payment for the Supreme Court (SC)imposed penalty on the coal block allocation
scam. "As a result of SC's decision to impose
additional levy retrospectively, JSPL was forced
to pay a lump sum amount of Rs 3,089 crore,
which caused it to post a loss of Rs 670 crore
(standalone) and Rs 1,675 crore (consolidated),"
the company said in a release.
JSPL had reported Rs 559 crore profit after
tax in the December 2013 quarter. The turnover
also fell two per cent to Rs 5,045 crore in the
quarter under review from Rs 5,142 crore a year
ago. "The company during Q3 (third quarter)
undertook multiple steps to reduce its costs,
including reduction of manpower by over five
per cent," the statement added.
According to sources, JSPL has around 15,000
employees. The Q3 results were also affected
by substantially higher costs on account of
depreciation and interest. Interest costs went up
to Rs 702 crore in the December 2014 quarter
from Rs 403 crore a year ago. Depreciation and
amortisation costs rose to Rs 715 crore from Rs
460 crore in the same period.
NGT orders closure of 17 steel
pickling units in Delhi
Seventeen stainless steel pickling units in
Wazirpur, New Delhi, face closure after the
7
Daily
Wednesday 04, February 2015
National Green Tribunal directed the Delhi
to several steel pickling units. The Wazirpur
Pollution Control Committee to ensure the units
Industrial Area has around 2,000 industrial units
are not operational without the consent of the
with many of them being steel pickling units.
board.
Indian Steelmakers to cut
prices on imports glut
The 17 units include Mittul Industries, Kasturi
Steel Industries, Pradeep Industries, Paras Steel,
Shri Krishna Re-Rolling Mill, GS Enterprises,
Shiv Enterprises, Goyal Enterprises, Rajesh, SV
Industries, Laxmi Narain Steel Roller, Hariram,
Vijay Enterprise, Shri Ram Enterprise, Ganapati
Rolling, Ganapati Steel and Jagdish Kumar.
Pickling is used to remove impurities and
stains from the metal surface using a liquor,
often strong acids.
The units were located on the banks of River
Yamuna, releasing toxins into the river.
The NGT was hearing a plea filed by the
All-India Lokadhikar Sangathan. In September
2014, the tribunal had issued closure notices
India’s largest steelmakers are expected to
cut prices to the lowest in almost a year to cope
with a glut created by surging imports from
China, Russia and South Korea.
Prices of hot-rolled steel, used to produce
sheets, wheels, pipes and railway tracks, may
fall by more than 4 percent this month to 32,500
rupees ($526) a metric tonne, according to the
average of six estimates compiled by Bloomberg
from industry executives, government officials
and analysts. Prices may not recover for a couple
of quarters, unless the government acts to curb
imports, they said.
“The slowing Chinese economy is leading to
8
Daily
Wednesday 04, February 2015
higher exports from the country,” said Rahul Jain,
2.5 percent, while JSW Steel Ltd. fell 1.2 percent.
a Mumbai-based analyst with CIMB Securities
Hot-rolled coil prices in Mumbai have
India Pvt. in Mumbai. “With surging imports,
declined 10 percent since July, when imports
price cuts will happen at least in the near-term.”
started rising, to about 34,000 rupees a tonne,
Tata Steel Ltd., India’s top producer, fell 0.7
excluding taxes. The rates for similar products
percent to 378.10 rupees at close in Mumbai, the
in China tumbled 22 percent in the same
lowest level since Jan. 14. Steel Authority of India
period, according to researcher Beijing Antaike
Ltd., the nation’s second-biggest producer, fell
Information Development Co.
9