For Private Circulation Only April 25, 2013 MARKET HIGHLIGHTS

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1 For Private Circulation Only April 25, 2013 MARKET HIGHLIGHTS LME Copper trades higher today after noting sharp gains yesterday Euro trades higher against US Dollar today after closing 0.12% higher yesterday US Dollar Index trades lower in early trades today after closing 0.11% lower yesterday April 24, 2013 MCX India (Rs/kg) Aluminium 30-Apr % Copper 30-Apr % Lead 30-Apr % Nickel 30-Apr % Zinc 30-Apr % Shanghai (Yuan/MT) Copper Apr % Copper May % Copper Jun % Asian markets trade higher choppiness in US markets yesterday US Durable Goods data fell 5.7% in March, the most in seven months after a revised 4.3% gain the prior month German Ifo Business Climate Index fell to in April from in March The ECB has room to act on interest rates if economic conditions remain weak -ECB Vice President Vitor Constancio Focus today on UK GDP data and US Initial Jobless claims COMEX (USD cents/lb) Copper Apr % Copper May % Copper Jun % LME (USD/tonne) Aluminium 3 Month % Copper 3 Month % Lead 3 Month % Nickel 3 Month % Zinc 3 Month % LME Inventories Opening Closing Net C/W Commodity Stocks Stocks Change Total C/W* Ratio* Aluminium % Copper % Lead % Nickel % Zinc % *C/W- Cancelled Warrants Major Currencies Currency Type Close PCP Change % Change USD Index Spot % EUR USD Spot % USD INR Spot % USD JPY Spot % GBP USD Spot % Base Metals Please See Disclaimer on the Last Page 1

2 ak Market Analysis LME Copper trades higher in early trades today after noting sharp gains yesterday. LME Copper yesterday hit highs of $7053 to end 2.33% higher at $7030 a ton. All the other metals too rose tracking firmness in copper prices. Industrial metals rose yesterday tracking dip buying by bargain hunters after steep slump in prices. The gains were however capped amid worries over weak demand tracking bleak global health. Further weak macroeconomic data from US and Germany too weighed down the prices. Most of the industrial metals are trading higher in early trades today. Lending support to the prices is hopes of loose monetary policy by central banks of major economies. Recent spate of weak data from major economies like US, Euro Zone and China has fuelled optimism that the central banks of these nations will either continue or deepen its loose monetary stance to spur growth. Yesterday s data from Germany showed that business sentiment in April was worse than the most pessimistic of forecasts, but it helped reinforce expectations that the European Central Bank might cuts rates at a meeting next week. However ECB policymakers rebuffed suggestions that Europe should ease up on austerity and said that while the central bank has room to cut interest rates, such a move would not necessarily help the economy much. Prices may further seek support from weakness in US Dollar Index. Dollar index trades lower in early trades today after modest decline yesterday. Weighing on the currency is weaker than expected macro-economic data from US. Also Euro is trading higher against UD Dollar amid expectation that expectation that ECB will take steps to spur growth and optimism that Italy can resolve its political gridlock. A weaker dollar makes commodities denominated in dollar cheaper for holder of other currencies thus increasing its appeal as alternate investment. Prices may further seek support from firmness in equities. Asian equities are trading higher today despite choppiness in US markets. In US, Dow Jones Industrial Average ended 0.29% lower while S&P ended unchanged. In other metals, Nickel prices may seek support after the International Nickel Study Group on Wednesday said that the global nickel market will slightly cut its surplus to 90,000 tonnes in 2013, down from a 110,000 tonne surplus in However in industry news, Russia's Norilsk Nickel, world's largest nickel producer, said it might suspend operations at its Tati Nickel mine in Botswana after prices dropped. The gains may however be capped amid worries over bleak global health. Weaker than expected data from top consumer China is fuelling worries over weak demand from the region. In China, manufacturing expanded at a slower pace in April, fueling concern that the world s second-biggest economy is faltering. HSBC s Flash Manufacturing PMI fell to 50.5 as against March s final reading of 51.6 and estimates of Earlier this month, GDP data from the region showed that economic growth unexpectedly eased in the first quarter of 2013, a sign the nation s recovery from the slowest expansion in 13 years has lost momentum. Chinese GDP rose at a slower pace of 7.7% from a year earlier as against market expectation of 8%. Further in US mixed macroeconomic data is signaling faltering pace of recovery in the region. Meanwhile in Euro Zone weak macroeconomic data coupled with worries over debt crisis in the region are denting market sentiments. Manufacturing across major economies noted another month of deep decline, dragging down even former bright spots and fuelling fears of deepening recession in the region. Also International Monetary Fund last Tuesday trimmed projections for global economic growth for this year and next to take into account sharp government spending cuts in the US and the latest struggles of recession-stricken Europe. The global economy will expand 3.3% this year, less than the 3.5% forecast in January, after 3.2% growth in IMF has cut its prediction for this year a fourth consecutive time. Copper prices may further come under pressure tracking rising mine supply and rising stocks at LME warehouses. Overall, industrial metals may note some gains amid dip buying after recent slump and hopes of loose monetary policy by various central banks however bleak global economic health and weak fundamentals of most of the metals may cap the upside. On domestic exchange prices may come under pressure tracking firmness in Indian Rupee against US Dollar. Base Metals Please See Disclaimer on the Last Page 2

3 Outlook Copper- MCX Copper may note some gains tracking cues from international market however appreciation in Indian Rupee may cap the upside. LME Copper is trading slightly higher amid hopes that central banks of major economies would continue or further loosen its monetary policy. Also lending support to the prices is weakness in US Dollar. The gains may however be capped tracking worries over demand amid bleak global economic health. Also putting pressure on the prices is choppiness in equities and rising stocks at LME warehouses. Stocks at LME fell by 1225 tonnes yesterday from the highest level since September 2003 hit on Tuesday. As for today, focus will be on UK GDP data and US Initial Jobless claims. Aluminum- MCX Aluminum may note some gains tracking range bound movement in international exchange however firmness in Indian Rupee may cap the upside. Prices may seek support from rebound in copper prices coupled with higher cancel warrants and recent decline in stocks at LME warehouses. Stocks at LME fell by 9125 tonnes yesterday but were near record high of tonnes hit on 21 st Dec while those at SHFE hit record high rising by 530 tonnes capping the upside. Support for Aluminum April contract is seen at Rs while resistance of Rs Zinc- MCX Zinc may not some gains tracking cues from international exchange however firmness in Indian Rupee may cap the upside. Prices may seek support from recent decline in stocks at exchange warehouses and jump in cancelled warrants ratio at LME. Stocks at LME fell by 6050 tonnes yesterday after declining by tonnes last week while those at SHFE fell by 4490 tonnes. The gains may however be capped amid weak demand outlook coupled with excess supply in physical market. According to the latest monthly bulletin from International Lead and Zinc Study Group (ILZSG), the global zinc market was in surplus by 50,000 tonnes in the first two months of higher surplus in physical markets. Stocks rose by 1314 tonnes yesterday hitting new record high. Also according to the latest monthly bulletin from the International Nickel Study Group, the global nickel market was in surplus by 21,500 tonnes in the first two months of the year. Lead- MCX Lead may note some gains tracking range bound movement in international exchange however firmness in Indian Rupee may cap the upside. Prices may seek support from rebound in copper prices and falling stocks at LME warehouses. However near record stocks at SHFE, waning winter related demand and excess supply in physical market may cap the upside. Stocks at LME fell by 25 tonnes yesterday while those at SHFE fell by 2323 tonnes. Meanwhile according to the latest monthly bulletin from International Lead and Zinc Study Group (ILZSG), the global lead market was in surplus by 8,000 tonnes in the first two months of Commodity Support Resistance Trend Aluminium Positive Copper Positive Lead Sideways Nickel Positive Zinc Sideways Note: Levels mentioned for all the commodities are for the month of April Nickel- MCX Nickel may note some gains tracking modest gains in international exchange however firmness in Indian Rupee may cap the upside. LME Nickel trades slightly up tracking rebound in copper prices and weakness in US Dollar. The gains may however be capped amid bleak demand outlook coupled with higher stocks at LME warehouses and Base Metals Please See Disclaimer on the Last Page 3

4 Economic Calendar Date Time Country Event Actual Forecast Previous Apr-22 7:30pm EUR Consumer Confidence :30pm USD Existing Home Sales 4.92M 5.02M 4.95M 7:15am CNY HSBC Flash Manufacturing PMI :00pm EUR German Flash Manufacturing PMI :00pm EUR German Flash Services PMI Apr-23 1:30pm EUR Flash Manufacturing PMI :30pm EUR Flash Services PMI :30pm USD New Home Sales 417K 419K 411K 7:30pm USD Richmond Manufacturing Index Apr-24 1:30pm EUR German Ifo Business Climate :00pm USD Durable Goods Orders m/m -5.70% -2.80% 5.60% 2:00pm GBP Prelim GDP q/q 0.10% -0.30% Apr-25 6:00pm USD Unemployment Claims 352K 352K 7:30pm USD Treasury Sec Lew Speaks Apr-26 6:00pm USD Advance GDP q/q 3.00% 0.40% 7:25pm USD Revised UoM Consumer Sentiment Base Metals Please See Disclaimer on the Last Page 4

5 Price Movement on LME last week Exchange Commodity Contract High Low Close PCP Change % Change 2013 High 2013 Low LME 3 Aluminium % month Copper % Month Contract Lead % Forward (USD/ Nickel % Tonne) Zinc % Stocks movement on Exchange Warehouses Weekly Stock Status 2013 Exchange Commodity 19-Apr 12-Apr Change % High Low Aluminum % Copper % LME Stocks Lead % Nickel % Zinc % Aluminum % SHFE Stocks Copper % Lead % Zinc % COMEX Copper % Base Metals Please See Disclaimer on the Last Page 5

6 Prerana Desai Vice President- Research Dharmesh Bhatia AVP Research- Technical Analyst Faiyaz Hudani Sr. Research analyst- Spices, Grains Research Desk Amit Sajeja Sr. Research analyst- Technical Analyst Sudha R. Acharya Research analyst- Edible Oil, Pulses Ankit Narshana Associate Research- Technical Analyst Madhavi Mehta Research analyst- Energy, Bullion Priyanka Jhaveri Research analyst- Base Metals Disclaimer This document is notfor public distribution and has been furnished to you solely for yourinformation and must not be reproduced or redistributed to any other person.persons into whose possession this document may come are required to observethese restrictions. This material is forthe personal information of the authorized recipient, and we are not soliciting any action based upon it. This report is not to be construed as an offer to seller the solicitation of an offer to buy any commodity or commodity derivative inane jurisdiction where such an offer or solicitation would be illegal. It is forthe general information of clients of Kotak Commodity Services Limited. It doesn t constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Wehave reviewed the report, and in so far as it includes current or historicalinformation, it is believed to be reliable though its accuracy or completenesscannot be guaranteed. Neither Kotak Commodity Services Limited, nor any personconnected with it, accepts any liability arising from the use of this document.the recipients of this material should rely on their own investigations and taketheir own professional advice. Priceand value of the commodity referred to in this material may go up or down. Pastperformance is not a guide for future performance. Certain transactions-including those involving commodity derivatives involve substantial risk andare not suitable for all investors. Reports based on technical analysis centerson studying charts of a commodity s price movement and trading volume, asopposed to focusing on a commodity s fundamentals and as such, may not matchwith a report on a commodity's fundamentals. We do not have anyinformation other than information available to general public. The report isbased on information from sources like respective industry associations, FICCI,CII, companies, media and other public sources. Opinions expressed are ourcurrent opinions as of the date appearing on this material only. While weendeavor to update on a reasonable basis the information discussed in thismaterial, there may be regulatory, compliance, or other reasons that prevent usfrom doing so. Prospective investors and others are cautioned that anyforward-looking statements are not predictions and may be subject to changewithout notice. Our proprietary trading may make trading decisions that areinconsistent with the recommendations expressed herein. We andour affiliates, officers, directors, and employees world wide may: (a) from timeto time, have long or short positions in, and buy or sell the commoditiesmentioned herein or (b) be engaged in any other transaction involving suchcommodities and earn brokerage or other compensation or act as a market maker inthe commodity/(ies) discussed herein or have other potential conflict ofinterest with respect to any recommendation and related information andopinions. Theanalyst for this report certifies that all of the views expressed in this reportaccurately reflect his or her personal views about the subject commodity and nopart of his or her compensation was, is or will be, directly or indirectlyrelated to specific recommendations or views expressed in this report. Nopart of this material may be duplicated in any form and/or redistributed withoutkotak Commodity Services Limited s prior written consent. RegisteredOffice: Kotak Commodity Services Ltd., Nirlon house, 1 st Floor,Dr. Annie BesantRoad, Opp. Sasmira, Worli, Mumbai - 25 Base Metals Please See Disclaimer on the Last Page 6