EFTA02511124.pdf

From: Daniel Sabba < Sent: Tuesday, March 10, 2015 8:58 PM To: [email protected]* Cc: Vahe Stepanian; Ariane Dwyer; Subject: FW: EOD Commodities Note - 1 ar Classification: Confidential Prateek Jain Sent: Tuesday, March 10, 2015 4:57 PM Subject: EOD Commodities Note - 10 Mar OIL Brent continued its downward momentum today as USD s=rength added to the physical market weakness in the NSea.. Iraq exports we=e higher for first week of March, as weather normalized and the backed out=crude found its way back to sea. Kuwait's OPEC governor stated that they expect Opec to make no chang=s to its policy in the June meeting. Qatar's former minister of ener=y reiterated the same thing..Brent spreads remained weak, except for the p=ompt spread (+0.1) which expires this week.. On our side of Atlantic, EIA raised 2015 US oil prod=ction forecast by 50kbd while lowering the demand forecast by 30kbd. Forec=st for WTI was also lowered from $55.02 to $52.15 for 2015. Interestingly =TI spreads were trading stronger for first half of the day, but reversed the gain later on increasing produ=tion worries. Arb ended up $0.6 today, and market positioning seems to be =n the upside here.. API data just came out and WTI jumped up as data sho=ed a draw of 400kb across US. However Cushing built 2.2m bbl, which if val=dated by DOEs tomorrow is much more bearish than Genscape, and could take =rb back below $9. Oil Vols Vols took off today as both crudes came off and put =kew got bid again. Jun vol spread widened to about 3%. I believe it'= an attractive buy below 1.5% (buy WTI call, sell BRE call to add a synthe=ic long arb position along with vol view). &=bsp; &nb=p; =nbsp; WTI (/change) &=bsp; &nb=p; BRE (/change) J15 &nbs=; =nbsp; 49.40% +4.00% &nbs=; =3.90% +10.0% M15 &nbs=; =nbsp; 48.35% +3.90% &nbs=; &=bsp; 45.50% +3.00% EFTA_R1_01643142 EFTA02511124 Z15 &=bsp; &nbs=; 35.60% +2.20% &nb=p; =35.35% +2.85% Z16 &nbs=; &=bsp; 27.40% +1.75% &nbs=; &=bsp; 27.55% +1.90% Base Metals 3m Ms &nb=p; =nbsp; dod change&nbs=; support &nbs=; &=bsp; resistance Al $1765 &n=sp; = -$15 &nb=p; =nbsp; $1750 &n=sp; = $1800 Cu $5765 &n=sp; = -$107 &n=sp; &nbs=; $5700 &=bsp; $5800 Zn $2022 &n=sp; = -$20 &nb=p; = $2000 &n=sp; $203= Ni $14,080 =nbsp; &nb=p; -$425 =nbsp; &n=sp; $14,000 &nb=p; $14,350 Pb $1813 &n=sp; = -$25 &nb=p; = $1750 &n=sp; $185= A strong dollar is responsible for the weakness in t=e base complex, hitting highs against the Euro and the Yen as the head of =he Dallas Fed announced that they should end loose monetary policy and hik= rates soon, contrasting with the ECB's quantative easing. Copper, Nickel and Zinc supports were=all broken, as the gains of recent days came off. There is expected =o be a ramp up in state grid tenders from April onwards and is likely to i=crease demand but in the short term demand remains weak. The State Grid Corporation of China is expected to increase investme=t by 9% this year, last year it accounted for almost half of the 8.7 mMT C=inese copper consumption. Chinese smelters have signed the first ter= deal of 2015 to buy- 300kMT of blended copper concentrate from Chile's Codelco after buying the new blend o= the spot to trial it last year. The Spot Treatment and Refining Cha=ges that the smelters receive for the contract are at $117/MT vs $115/MT l=st Friday for standard concentrates last Friday. The continuing drought in Chile is keeping concerns about copper supplies =igh. A court order to demolish part of a dam that would close the Pe=ambres mine is to be appealed as local demonstrators continue disrupt oper=tions at the mine over concerns about water usage. Rusal sees Q2 aluminum premiums stabilizing due to incr=ased industrial activity in the US EU and Asia and that a weaker arb will =imit Chinese semi finished exports. Standard Chartered sees 6.7m MT/a=num of local smelters shutting down if premiums drop to - $333. Environmental legislation could cut up to 26.2 kMT of=NPl in the next 4 months. Mitsui Mining and Smelting Co Ltd, lapan&#=217;s biggest zinc smelter sees prices recovering to -$2300 in Q2 as a glo=al deficit that is expected to last until 2017 kicks in. Shanghai Aluminum on warrant stocks are up 1.44% to =8 kMT. LME Aluminum on warrant stocks are up 0.49% to 1766 kMT Shang=ai Copper on warrant stocks are up 2.44% to 69 kMT. LME Copper stocks are =p 1.27% to 279 kMT. LME Nickel stocks are flat at 310 kMT. Copper Vols are down 0.75%, Ali Vols are unch, Nicke= Vols are up 1.5%, Lead Vols are unch Zinc Vols are unch<=p> 2 EFTA_R1_01643143 EFTA02511125 Upcoming Data 10/3- China CPI YoY- Sury 1%, Actual 1.4%, Pr=or 0.8% Regards, Prateek Please=access the link for disclaimer: http://globalmarkets.db.com/new/content/3045.html &=bsp; Deutsc=e Bank External Business Conduct Standards can be found at www.DB.com/=oddfrank This communication may contain confidential and/or privileged information. =f you are not the intended recipient (or have received this communication =n error) please notify the sender immediately and destroy this communicati=n. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidde=. Deutsche Bank does not render legal or tax advice, and the information contrined in this communication should not be regarded as such. 3 EFTA_R1_01643144 EFTA02511126