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From: Daniel Sabba
Sent: 3/31/2015 8:06:56 PM
To: jeffrey E. [jeeyacation@gmail.com]
CC: Vahe Stepanian
Subject: FW: EOD Commodities Note - 31 Mar
Importance: High
From: Prateek Jain
Sent: Tuesday, March 31, 2015 4:06 PM
Subject: EOD Commodities Note - 31 Mar
Ariane Dwyer
OIL
All eyes on Iran talks today which were extended by a day into Wednesday. Earlier in the day, a US official suggested
that negotiation may continue another day past deadline if 'it's useful to do so'. Another Russian official commented
that a deal was 'closer and closer'. This optimism about an agreement, at least on some points, weighed heavily on oil
today with Brent dropping 2.5%. In my opinion, even if the talks end positively with agreement on key points, the deal
has been softened enough compared to what was originally sought by President Obama, and is going to face a tough
challenge being approved by a skeptical Congress, which is in fact proposing to impose new sanctions on Iran.
Nigeria's elections ended today easing the political tension, with the ex-military ruler Buhari's winning against the
incumbent President. In short term, this eased any immediate violence concerns in the country, but this shift in power
can lead to the movement of the Boko Haram violence to southern oil producing region of Nigeria and any
developments there need to be carefully watched. In other news, Yemen rebels seized military base at Bab el-Mandeb,
overlooking the key shipping route while Saudi-led coalition kept bombing Houthi occupied sites..
Vols were stronger with wings being bought aggressively today as oil can move quickly away from current levels
depending on Iran deal outcome.. overall vols gained about 1% across the curve
WTI (/change) BRE (/change)
K15 52.50% +1.45% 51.10% +1.05%
M15 51.20% +2.10% 47.90% +0.90%
Z15 37.10% +1.00% 35.15% +0.70%
Z16 26.20% +0.10% 26.40% +0.55%
Metals
3m Ivls dod change support resistance
Al $1785 -$12.5 $1750 $1800
Cu $6041 -$41 $6000 $6300
Zn $2081 -$28 $2000 $2100
Ni $12,395 -$485 $12,000 $13,000
Pb $1820 -$5 $1800 $1900
The base complex traded down in the morning then picked up on improving customer confidence only to crash off again
at close. China has reduced the deposits required from home buyers for the second time in 6 months in an attempt to
boost sliding house prices, which should have knock on effects in the copper and nickel markets. Nickel continues its
slide as CTA funds have sold off heavily on the supply crunch failing to materialize and demand from the stainless steel
market evaporating. Nickel ore supplies are also returning from the Philippines as the rainy season ends, adding further
supply pressure. Chinese NPI producers are cutting production, selling stocks or attempting to secure loans on the back
of stocks in warehouses. Rio Tinto have resolved the their tax dispute with the Mongolian government over the Oyu
Tolgoi copper mine but financing still needs to be negotiated over phase ll of the development there. Zambia's Mining
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and finance ministers have indicated that they may consider temporarily reverting to the old tax regime or making deals
on a mine by mine basis as the IMF applaud their efforts to compromise and encouraged them to implement a
transparent system that applies to all mines. Vietnam is expected to increase its aluminia output by 20% to
650kMT/year as its first plant reaches full capacity this month.
Shanghai Aluminum on warrant stocks are flat at 108.1 kMT. LME Aluminum on warrant stocks are flat at 1888
kMT Shanghai Copper on warrant stocks are flat at 86.7 kMT. LME Copper stocks are up 0.11% to 252 kMT. LME Nickel
stocks are up 0.41% to 332 kMT.
Copper Vols are down 0.5%, Ali Vols are down 0.25%, Nickel Vols are up 1%, Lead Vols are unch Zinc Vols are unch
Upcoming Data
30/3-Chicago PMI-Sury 51.7%, Actual 46.3%, Prior 45.8%
30/3-US Consumer Confidence Index -Sury 96.4, Actual 101.3, Prior 96.4
Regards,
Prateek
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