Report Summary. LME 3M: USD 7286 (+1.34%) SHFE 3M: CNY (+0.00%) MCX Nov 13: INR ( 1.59%) As on 01 st Oct,2013

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1 Decision enabling market analysis & price outlook For Oct 03, 2013 Report Summary LME / SHFE / as on 02 nd Oct, 2013 LME 3M: USD 7286 (+1.34%) SHFE 3M: CNY (+0.00%) Nov 13: INR ( 1.59%) As on 01 st Oct,2013 Fundamental Summary Technical Summary Price outlook summary Price Ranges Procurement Strategy Review (LME Cash) Procurement Strategy (LME Cash) Futures Strategy Review Critical factors Economic sentiments from US Signs of steadying growth in China Sharp rise in TC/RC charges LME inventory movement Improving Concentrates Supply Government shutdown in US and looming concerns over debt default Sum Up Impact Bullish Price is hovering around 18 pd EMA, staying above likely to add momentum towards USD Support is expected above USD 7120 in the forthcoming few sessions. LME Concisely, price is likely to stay above USD 7120 and inch higher towards USD 7370/7550 in the coming 3 5 sessions. copper price likely to find support in the range of INR and inch higher towards INR 470 in the coming few sessions. 0 5 days 0 10 days Range Price Bias Range Price Bias to positive Positive Sep 13 procurement completed at an average of USD compared to the monthly average of USD per ton. Oct 13 procurement completed at an average of USD compared to the monthly average of USD per ton. Price 50% of Nov 13 buying requirements near USD Wait for pricing remaining Nov 13 buying requirements. Our long position got filled at USD 7220/ INR 460 in the last session. Trader should hold the positions in line with below mentioned strategy: Consider add on buying around INR 452/USD 7150 with the same Stop Loss Trading Strategy Filled on Position Entry Objective Stop Loss LME 1 st Oct 2013 Long USD 7220 USD 7550 Below USD st Oct 2013 Long INR 460 INR 480 Below Discuss with our expert Phone: E mail: services@transgraph.com Internet:

2 Parameter Performance Audit AMJ 2013 JAS 2013 LME 3-m forward LME Cash (procurement) LME 3-m forward LME Cash (procurement) Average savings (INR*/USD) 2.54* Strike rate % 60.00% 90.91% % % Net profit / Gross profit Ratio % 55.90% 92.38% % % -- Market Review After falling early in the week on US government shutdown concerns and concerns over slowing demand in China due to national day holidays this week, prices turned positive during the previous session as the dollar fell sharply against the euro on weak US jobs data and as the European Central Bank decided to keep rates unchanged. Weaker than expected US private sector jobs report sapped the dollar during the previous session, while European Central Bank President Mario Draghi provided a firm boost to the euro by sticking to the ECB's current stance on monetary policy. Appetite for riskier assets such as base metals also improved after Italian Prime Minister Enrico Letta won a confidence vote in the Senate. ADP Non Farm Employment for Sep 2013 witnessed an increase of 166 thousand compared to the market expectation of 177 thousand. Data for August 2013 was revised from the earlier 176 thousand to 159 thousand. Downside revisions to jobs numbers, which has been the key determinant for US Fed to cut back on its asset purchase programme, shall be leading to further weakness in the US dollar and maintain expectations of the current stimulus to continue thereby supporting the price sentiments. In other data front, the first significant private survey after the shutdown began the Institute of Supply Management's report on manufacturing showed the fastest expansion in almost 2 1/2 years. ISM manufacturing PMI for US during Sep 2013 witnessed an increase from 55.7 to 56.2 against an expectation of decline to Earlier this week, Chinese manufacturing PMI for Sep 2013 came in at 51.1 against 51 during the preceding month while non manufacturing PMI increased from 53.9 to 55.4 in Sep 2013 indicating the positive sentiments at the Chinese front. Chinese demand picked up in the summer, and improving indicators are pointing to the direction that the Chinese economy is again back on the growth path. However, trading volumes remain thin with Chinese traders away until Oct. 7 for National Day holidays. Moving forward, trading in Chinese spot market and at Shanghai Futures Exchange (SHFE) shall remain suspended due to National day Holidays in China. In absence of trading activity in world s largest consumer we expect base metal prices at LME to trade on a mixed note with low volume during the week. Easing supply cocnerns of metal was the production data from Chile which showed sharp rise in Chile copper output in August. Chile s Augt 13 mined copper output increased by around 6.54% YoY to KT from KT in Aug 12. Meannwhile production in August was higher by around 2.6 percent comapred to ouput of KT in July. Higher output from new mines amid better ore grades and improvement in 2

3 operations and production at Collahausi mine have kept Chilean output higher in last couple of months. Moving forward, despite of dwindling ore grades and aging mines, increasing output from country s new mines shall keep output in September 2013 at higher levels. We expect production to increase marginally to 494 KT in the absence of robust demand sentiments. At inventory front, Copper stockpiles in CME Group sole New Orleans warehouse, owned by JPMorgan have vanished this summer as quickly as they appeared, spurring fresh talk over how financing deals and off exchange stocks have distorted supplies and bolstered premiums. On the face of it, the abrupt decline in inventories a month ago made perfect sense. Domestic demand was improving, exports to China were growing, and Comex offered the quickest way to get last minute supplies. Exchange warehouses in other locations also saw a draw down, although not as steep. However, some physical traders in the US indicate that the drop had little to do with fundamentals as data from London Metal Exchange shows that its own separate New Orleans warehouse stocks increased by a similar amount that Comex declined thereby proving a stark example of the shuffling stocks that have roiled metal markets for years. Calendar Key Economic & Other Fundamental Data Event Date Expected Value Current Value EU services PMI (EUR) 03 Oct US Unemployment rate (USD) 03 Oct 315K 305K ISM Non Manufacturing PMI (USD) 03 Oct EU PPI (EUR) 04 Oct 0.1% 0.3% Technical Outlook Candle Pattern: Positive LME Copper price found support around USD 7150 and traded with positive momentum in the last session. Chart Pattern: Positive Positive window is evident on the daily chart, price above USD 7370 likely to trigger follow through buying for the minimum objective of USD Trend Analysis: Positive Short term trend is bullish with support in place around USD Momentum Analysis: Positive Price oscillator is positive and hovering around equilibrium indicating positive bias in the coming few sessions. Elliott Wave Analysis: Corrective Rise 3

4 Second leg of corrective rise likely to have culminated at USD 7024 and now test of USD 7550 is more likely. Concisely, price is likely to stay above USD 7120 and inch higher towards USD 7370/7550 in the coming 3 5 sessions. Copper Volatility Jul 13 Aug 13 Sep 13 Oct 13 Powered by TransRisk LME Copper Daily 3M Forward Volatility RISK PARAMETER Copper AVaR Jul 13 Aug 13 Sep 13 Oct 13 Powered by TransRisk LME Copper Daily 3M Forward AVaR Copper Commodity Price Chart Links Facts and Figures Market and details Oct 02 Oct Change %Change LME Copper Cash, USD / Ton LME Copper 3 Month Forward, USD / Ton LME Copper 15 Month Forward, USD / Ton LME Copper 27 Month Forward, USD / Ton Changjiang Spot Market China, Yuan / Ton SHFE 3M Forward Futures, Yuan / Ton Copper Wire Scrap Mumbai Spot Market, INR / ton LME warehouse stocks (In tons) Copper Oct 01, 2013 Open High Low Close Change (Previous close) % Change Cumulative Volume (in lots) Open interest Nov Feb (466.40) 6.95 (476.25)

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