[minutes of SMM Aluminum Internal Morning meeting] the United States lifting sanctions against Rusal will be bearish in the short term, but the bottom of aluminum prices will be stronger in the short term.

1.28 minutes of internal morning meeting of SMM aluminum

Market surface: boosted by the weakness of the US dollar, Shanghai Aluminum main trading on Friday night, long carrying volume into the market, the highest touch of 13610, closed at 13585, closing up 65 yuan / ton. London aluminum sub-market to a small shock, to Europe, the trend is stronger, as high as 1919, closing at 1905, up 1.03% from the previous day.

Macro: us President Donald Trump announced on the 25th that he has reached a bipartisan agreement with Congress. The US House of Representatives has approved a temporary spending bill, which does not include border wall funds, and the federal government will reopen for three weeks. The dollar index fell 0.76% to 95.8195, its lowest level in more than a week. The ECB cut GDP growth to 1.5 per cent in 2019 from 1.8 per cent and inflation to 1.5 per cent in 2019 from 1.7 per cent. The three major US stock indexes closed higher, with the Dow up more than 180 points. There is no central bank liquidity tool due in the open market before the Spring Festival.

Fundamentals: the US Treasury announced on January 27th local time that sanctions against three companies related to Russian tycoon Oleg Deripaska (Oleg Deripaska) would be lifted. These include Rusal (Rusal), En+ Group and European Siberian energy company (JSC EuroSibEnergo). But all sanctions against Jeremy Pascal remain in force. Jean-Pierre Thomas, chairman and director of Rusal, resigned in exchange for an end to US sanctions. As the Spring Festival approaches, the stock of the downstream aluminum processing plant is basically over before the festival. Last Wednesday, the inventory already had an inflection point, and the downstream receiving began to appear tired. According to the research results of SMM in early January, the holiday of small and medium-sized processing enterprises in the lower reaches of this year is mostly concentrated on the 15th and 20th, and the stock preparation behavior occurs in the middle and early January.

Spot end: on Friday, the mainstream transaction price in Shanghai was between 13390 and 13410 yuan / ton, and the price quoted in the morning was slightly confused. Wuxi transaction price concentrated 13390 to 13410 yuan / ton, Hangzhou transaction price concentrated in 13380 to 13400 yuan / ton. Mainstream trading prices fell nearly 60 yuan per ton compared with the previous day. A large middleman received less than 1,000 tons in East China and more than 4,000 tons in South China on Friday. There was an adequate supply of goods in circulation on Friday. Due to the decline in prices, traders received goods actively and middlemen traded actively. Downstream Friday near the weekend although a little shopping, but has been in the holiday cycle, procurement efforts are not enough, the overall performance is calm. The deal in East China is mediocre. Afternoon aluminum is still fluctuating in the range, the trading price is concentrated in 13390 to 13410 yuan / ton, only some transactions between middlemen in the afternoon, downstream receipt of goods.

Summary: the United States lifted sanctions against Rusal and was bearish in the short term. We maintain the view that the range of aluminum prices before the festival is fluctuating. At present, the upper part of Shanghai Aluminum is subject to the downward movement of costs and accumulation of stocks, and the technical pressure above the main force of Shanghai Aluminum is 13610. At the same time, under the expectation of going to the warehouse driven by the recovery of consumption after the festival, the strength of the bulls is also stronger, and it is still suggested that investors can take a short time at the top of the technical pressure level, and the trend investors will pay for the bulls on the low layout. The bullish risk comes from the accelerated decline in alumina after the festival and poor consumer expectations.

Other: the Academy of Social Sciences released the "monthly Analysis of the Development of China's Housing Market" said that global economic growth expectations tend to be pessimistic, making home buyers wait-and-see mood increased; Real estate regulation and control policies to maintain continuity and stability, some developers and housing investors on the real estate regulation and control of the forecast repeatedly failed, began to gradually reduce prices to sell houses.