Minutes of SMM aluminum morning meeting on November 26th
Trading: last Friday, crude oil fell sharply, the dollar rose against the background, metals fell, black, non-ferrous prices are weak, aluminum performance is strong resistance. Shanghai aluminum shows multiple short positions alternately, but short positions are mainly reduced. The company, which had volatility of less than $40 a tonne last week, was weak and hovering.
Macro: crude oil plummeted last week, Brent crude oil and WTI crude oil broke through four barriers, down more than 6%, crude oil fell too much caused other commodities to bear pressure down; The dollar rose, although the dollar index fell 97 last week to hit 96, but rose a lot later on to put pressure on metals. The trend of aluminum is more stable than that of other metals, mainly due to the recent concentrated production reduction and other positive factors.
Fundamentals: on the supply side, the scale of production reduction in aluminum plants has been expanding recently, but it is worth noting that the overall anti-risk ability of the industry is stronger than that in 2015, and the space for increasing the scale of subsequent production reduction is limited. On the cost side, the price of alumina is determined by its own supply and demand. Under the background of the double contraction of supply and demand and the decline of demand is greater than that of supply, there is a certain downward pressure. On the consumer side, it is difficult to warm up consumption at the end of the year. Weather warning in Henan and other places in China suppresses the consumption of electrolytic aluminum. Enterprises with melting and casting can only choose to purchase raw materials such as roll-casting rolls and billets in bad weather, and export them. We maintain the view that we are down from the previous month but can still be high, mainly due to the decline in disguised export orders. On the inventory side, inventories fell by a further 29000 tons on Thursday, but the decline narrowed for three weeks in a row, while the decline in inventories narrowed against the backdrop of a decline in supply caused by production cuts, which shows that consumption downstream is difficult to start.
Conclusion: the aluminum price is mainly determined by supply, demand and cost. From the above analysis, we can see that the aluminum price is weak in the medium term. Under the background of concentrated production reduction of electrolytic aluminum production in the short term, it is supported to a certain extent, showing horizontal consolidation. If the price of alumina falls in the later period, there is still room for aluminum prices to go down.
Other: 1) according to the website of the government of Gongyi City, Gongyi City will impose additional emission restrictions according to the weather warning state, including 34 aluminum processing enterprises, 34 foundry enterprises, 22 carbon enterprises and 1 electrolytic aluminum enterprise in the aluminum industry. 2) Zibo Rundi Aluminum Co., Ltd. has obtained the licensed mining rights of two bauxite mines in Guinea. 3) in October 2018, China exported 460072 tons of alumina, with a total export volume of 1.6304 billion yuan, with an average value of 3543.8 yuan per ton of alumina. From January to October 2018, China exported a total of 999000 tons of alumina. In October, China imported 50, 000 tons of alumina. From January to October 2018, China imported a total of 455000 tons of alumina, with a net export of 544000 tons in the previous 10 months. 4) the annual production of 300000 Sixun New Energy vehicles Project has been officially signed to be located in Huaian High-tech Zone. The project is scheduled to start construction in 2019 and be completed and put into production by the end of 2020.
(Shanghai Nonferrous Xu Man 021 51595898)
