Report Summary. LME 3M: USD 2086 ( 0.27%) SHFE 3M: CNY (+0.46%) MCX Dec 13: INR ( 0.36%) Trader should wait for fresh position.

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1 Decision enabling market analysis & price outlook For Dec 31, 2013 Report Summary LME / SHFE / as on 30 th Dec, 2013 Fundamental Summary Technical Summary Price outlook summary Price Ranges Procurement strategy review (LME Cash) Procurement strategy (LME Cash) Futures Strategy Review LME 3M: USD 2086 ( 0.27%) SHFE 3M: CNY (+0.46%) Dec 13: INR ( 0.36%) Critical factors Expected weakness in demand from Chinese steel sector Inventory movement at LME US Fed trimming its monthly bond purchases Gaining strength in US economic activity Tightening supply in spot market Cash trading at premium to Sum Up Impact Bearish Bearish Mixed Price is above 18 pd EMA indicating positive bias. RSI (9) being overbought, resistance is expected around USD LME Concisely, upside momentum is seen stalling hence retracement towards USD 2050 is likely in the coming few sessions. Short term uptrend in the zinc price is likely to provide support around INR 125 while resistance is expected around INR / in the coming few sessions. 0 5 days 0 10 days Range Price Bias Range Price Bias Positive Mixed Dec 13 buying requirements were completed at an average price of USD compared to the monthly average of USD per ton. 25% of Jan 14 buying requirements completed at USD 1975 on 20 th Dec Remaining 75% of Jan 14 buying requirements should be considered around USD Trader should wait for fresh position. Trading Strategy Filled on Position Entry Objective Stop loss LME Wait Discuss with our expert 1 Phone: E mail: services@transgraph.com Internet:

2 Parameter Average savings (INR*/USD) Performance Audit AMJ 2013 JAS 2013 LME 3 m forward LME Cash (procurement) LME 3 m forward LME Cash (procurement) 1.10* * Strike rate % Net profit / Gross profit Ratio % Market Review Amid position squaring in thin trading conditions ahead of New Year holiday, Industrial metal complex traded on a mixed to negative note during the Monday s trade at LME. Fundamental Overview and expectations: Chinese production of refined Zinc and Zinc concentrates has remianed higher Y o Y since March 2013 keeping market well supplied in first eleven months of the year. While zinc ingot production in Nov 2013 increased modestly (M o M) to to 503 KT. Production in first 11 months (Jan Nov) have remained around 12.4 percent higher at 4.93 million tons compared to production of 4.38 million tons during the same period in Zinc concentrate production in first 11 months of 2013 is at 5.16 million tons, around 9.2 percent higher compared to 4.72 million tons in first 11 months of Rising domestic supply of raw material concentrates is expected to keep Chinese Zinc production higher in the medium term. While spread started narrowing down since last week of November, it entered into backwardation in mid December and recovered slightly in third week of the month. However, Zinc market again into backwardation last week with Cash trading at a premium compared to 3 month. Chart adjacent showing spread and price movement since first week of October clearly shows that 3 month forward started rallying upward once spread touched zero. Spread between the cash and 3 month official plunged to its lowest in 2013 and are at USD ( 18 per ton, as on 30th Dec) Economic Overview and expectations: Below expected gains in previously owned homes sales in US indicates that higher borrowing costs are to some extent holding back the recovery in residential real estate. Pending home sales registered an increase of 0.2 percent, the first gain in six months which signals that gains in hiring, household wealth and consumer confidence would help boost the housing recovery and give greater momentum to the economy in the medium term. 2

3 At economic data front, week ahead is going to be a rather quiet week in terms of key economic releases as New Year holidays shall delay some of the key releases into next week. However, having said that we shall still see some of the key releases particularly from China and US. Manufacturing PMI numbers from US and China shall remain the major attraction of the week in addition to other key data such as Non Manufacturing PMI data from China and consumer confidence data from US. Notable improvement seen in the jobs market and Q3 GDP growth along with approval of new budget deal ahead of the January deadline is expected to boost consumer confidence in December. We expect a sharp spike from 70.4 seen last month to around 76 this month. While we expect a marginal fall in Chinese Manufacturing PMI from 51.4 in November to 51.3 in December owing to year end cash crunch which got relaxed following money infusion by Central bank, it will still be in expansionary area which shall negate any disappointment for market. Calendar Key Economic & Other Fundamental Data Event Date Expected Value Current Value S&P/CS Composite 20 HPI y/y (US) 31 Dec 13.4 % 13.3 % CB Consumer Confidence (US) 31 Dec Manufacturing PMI (China) 01 Jan Technical Outlook LME Zinc 3 M forward price traded mixed within its previous day range there by placing Bearish Harami body, hence early signal for consolidation. Price is well above 18 pd EMA and steep slope is evident on the chart likely to find support around USD On the daily technical setup, RSI (9) is deeply overbought hence consolidation is likely to follow. On the higher side, extension based resistance is likely around USD 2115/2190 in the coming few sessions. On the down side swing based support is 2970, while USD 2050 should support the current upside momentum. Concisely, upside momentum is seen stalling hence retracement towards USD 2050 is likely in the coming few sessions. 3

4 Zinc Volatility Sep 13 Oct 13 Nov 13 Dec 13 Powered by TransRisk Zinc Daily Future Volatility RISK PARAMETER Zinc AVaR Sep 13 Oct 13 Nov 13 Dec 13 Powered by TransRisk Zinc Daily Future AVaR (USD/MT) Zinc Commodity Price Chart Links Market and details Dec Dec Change %Change LME Zinc Cash, USD/Ton LME Zinc 3 M, USD/Ton LME Zinc 15 M, USD/Ton Changjiang, Yuan/Ton SHFE 3M Futures Yuan/Ton HZL prices Ex Chanderiya, INR/Ton Mumbai Spot Market, INR / ton LME warehouse stocks (In tons) Zinc Dec 30, 2013 Open High Low Close Dec Jan Change (Previous close) 0.50 (130.50) 0.95 (130.65) % Change Cumulative Volume (in lots) Open interest

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