[minutes of SMM Aluminum Internal Morning meeting] Alumina prices continue to fall & SMM Research on the start-up rate of Aluminum processing Enterprises

7.10 minutes of SMM internal aluminum morning meeting

Market surface: yesterday, London aluminum maintained a narrow range of shocks during the day, and then rose to the highest level of US $1821 / ton at night, closing at US $1820.5 / ton, up US $16 / ton, up 0.89%, mainly to increase its position. Shanghai Aluminium's main 1908 contract bottomed out at 13690 yuan / ton in night trading and rebounded to 13790 yuan / ton, with a slight pullback at the end of the day, closing at 13755 yuan / ton.

Macro: (1) on the evening of July 9, Liu he, member of the political Bureau of the CPC Central Committee, vice premier of the State Council, and Chinese leader of the China-US Comprehensive Economic Dialogue, spoke to US Trade Representative Lettershize and Finance Minister Mnuchin to exchange views on the implementation of the consensus of the Osaka meeting between the two heads of state. (2) the local version of the New Policy on stabilizing Investment and promoting consumption will be accelerated. In the middle of the year, intensive economic situation analysis meetings will be held in many places to sum up the economic work in the first half of the year. At the same time, we will study and judge the situation in the next step and plan the economic priorities for the second half of the year.

Fundamentals: the cost side continues to decline, SMM alumina weighted price quoted at 2667 yuan / ton, down nearly 60 yuan / ton compared with the previous day, the actual domestic transaction has been carried out around 2600 yuan / ton, Australian alumina FOB price also fell 2 US dollars / ton quote 312 / ton; On the demand side, SMM completed the survey on the start-up rate of the aluminum processing industry in June. The start-up rate of aluminum sheet and strip enterprises in June was 70.32%, down 4% from the previous month. It is expected that the start-up rate in July will be flat or slightly down. In June, the start-up rate of aluminum foil enterprises will be 87.83%, which is 0.85% lower than the previous month. It is expected that the start-up rate will continue to decline in July. The operating rate of aluminum cables in June increased by nearly 3% from a month earlier to 48.33%, and cable production in July is expected to be the same as in June.

Spot: on Tuesday morning, the transaction price of Wuxi in Shanghai was between 13690 and 13700 yuan / ton, and some purchases were made around 13710 yuan / ton of a large household. With the rise of aluminum futures, the mainstream transaction price of Shanghai-tin market after 11: 00 was around 13700-13710 yuan / ton, and the flat surface of the current month was up 10 yuan / ton, down nearly 40 yuan / ton from the previous day, and the transaction price of Hangzhou was between 13710 and 13730 yuan / ton. On Monday, there was an adequate supply of goods in the market, and the enthusiasm of the shippers continued unabated, as prices fell for two days in a row, middlemen increased their willingness to replenish goods at low prices, and the holders were slightly higher in price, so the actual transaction between traders was slightly deadlocked. Downstream manufacturers today as usual procurement, on-demand delivery performance is mediocre, compared with the previous day has not improved. The overall transaction in eastern China on Tuesday was slightly worse than yesterday.

Summary: the speed of electrolytic aluminum inventory continues to slow down, SMM statistics downstream aluminum processing industry start-up rate is mostly lower, consumption off-season has arrived, so we maintain the short-term aluminum price pressure point of view, but based on the consumption season in September, it is suggested that in 13500 to 13800 yuan / ton to try the layout of multiple orders. Spot aluminum prices are expected to change little today, or will rise slightly by about 20 yuan per ton.

(SMM Li Hao 021 5166 6863)