October 15th, 2013

TECHNO FUNDA REPORT ON TECHNO FUNDA REPORT ON

LEAD & ZINCBattery and Galvanizing metal set to recover

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MCX LEAD (NOV) DAILY CHART

MCX ZINC (NOV) DAILY CHART

RecommendationInvestors can take fundamental Buy position in MCX Lead (Nov) at current prices for target of 140 and 143 with stop loss of closing below 128.

Note:

a) These long term fundamental calls are for duration of three to four weeks time frame and do not confuse these with intraday calls.

b) It is presumed that investor take position in two lots and square off one lot in case of partial profit and trail stop loss for second lot to buying/selling price.

RecommendationInvestors can take fundamental Buy position in MCX Zinc (Nov) at current prices for target of 126 and 129 with stop loss of closing below 114.50.

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Source: Reuters

Source: Reuters

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LME ZINC DAILY CHART

LME LEAD DAILY CHART

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Source: Reuters

Source: Reuters

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Bullish Factors

�Expectation that debt deal will be reached : Senate leaders are poised to reach an agreement as early as

today to bring a halt to the fiscal standoff, and now must race the clock to sell the plan to lawmakers before U.S.

borrowing authority runs out this week. The emerging deal would stave off a potential default, end the 15-day-old

government shutdown and change the immediate deadlines in favor of three new ones over the next four months.

It's far from complete as the Senate may delay passing the plan and House Republicans may seek to block or

change it. Lawmakers would be required to hold budget talks by Dec. 13, fund the government through Jan. 15,

2014, and extend the nation's borrowing authority until Feb. 7, 2014. An agreement would forestall the

immediate crisis. It would end the shutdown that has closed many federal services and prevent a possible U.S.

default that the Treasury Department said may be catastrophic.

�China economy slowly on the path of recovery: The world's second-biggest economy probably grew 7.8

percent last quarter, up from 7.5 percent in the April-June period. According to Bank of America “China's stable

currency, large current account surplus and robust financial conditions could make China a defensive place

when some other emerging markets were hit by a possible U.S. QE tapering”.

�Indian Rupee can weaken: Local currency rupee which has seen amazing strength in recent days can weaken

after taking support near 61 levels amid growing inflation concerns in the economy.

�Lead Stock position has been falling steadily in SHFE and LME : There has been fall in the stock

position in China and LME. Registered inventory on the Shanghai Futures Exchange (SHFE) stands at 100,013

tonnes, the lowest level since January. LME-registered stocks have fallen by 132,000 tons, or almost 42%, since

the start of January and are now standing at 185,675 tonnes, a three-year low.

�Auto sales up 10% in August – SIAM The latest data from the Society of Indian Automobile Manufacturers

(SIAM) showed that the auto production and sales bounced 8.2% and 4.5%, respectively, for the first time in 10

months in August 2013 on a lower base. Including exports, the total auto sales went up 10% to 1673890 units in

August 2013. The auto industry were undergoing through tough time as rising fuel prices, high financing costs

and sluggish economic activity weigh on demand. On the segment wise auto sales including exports, the

passenger car sales jumped 156% to 233001 units in August 2013, and 2-wheelers sales was up by 12% to 1323672

units. Meantime, M&HV's sales declined 36% to 16575 units, LCV's sales decreased 13.1% to 37795 units and 3-

wheelers sales dropped 7.6% to 62847 units during the same period.

�Lead and Zinc usage increasing: Meanwhile, global refined Lead usage rose 6.8% to 5.31 mt in January-

June 2013. This was higher compared with 4.97 mt in January-June 2012. This was majorly on account of

Chinese and US usage that increased 9.3% and 10.8%. In Europe, consumption increased 3.4%., Zinc metal

usage was up 5.8% YoY to 6.45 million tonnes during same period. A rise in Chinese apparent demand for refined

Zinc metal of 8.9% was the main driver behind an increase in global usage. Further, demand in Europe rose by

2.6% and, in the United States by 4.2%.

�Zinc Stocks decline: Zinc has been one of the better performers lately backed by structural positivity over the

long-term deficit and consistently falling stock at the LME. Zinc stocks fell by nearly 20,000 MT last week,

sliding around 2% from previous weeks mark of over 1,013,000 mark.

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Source: Reuters

Your valuable feedback will be appreciated

For further queries Pls. Contact

Sandeep Joon Senior Research Analyst Phone 011-30111000 Extn -646E-mail sandeepjoon@smcindiaonline.com

Supportive teamPramod Chhimwal Graphic Designer Simmi Chibber Research Executive

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