[summary of internal morning meeting of SMM aluminum] Alumina allowed profits to continue, and losses of electrolytic aluminum enterprises narrowed.

7.16 minutes of SMM internal aluminum morning meeting

Market surface: yesterday, London aluminum opened at US $1823.5 / ton, closed at US $1843 / ton, up US $15 / ton, up 0.82%. Yesterday, Shanghai Aluminium moved its main position to 1909 contract, and opened at 13810 yuan / ton during the day. Shock upward, the highest touch to 13905 yuan / ton, finally closed at 13895 yuan / ton, mainly to increase positions.

Macro: (1) China's gross domestic product (GDP) in the first half of the year was 45.0933 trillion yuan, an increase of 6.3 per cent over the same period last year in terms of comparable prices. On a quarterly basis, it rose 6.4% in the first quarter from a year earlier and 6.2% in the second quarter. In terms of industry, the added value of the primary industry was 2.3207 trillion yuan, an increase of 3.0 percent over the same period last year; the added value of the secondary industry was 17.9984 trillion yuan, an increase of 5.8 percent; and the added value of the tertiary industry was 24.7743 trillion yuan, an increase of 7.0 percent. (2) in the first half of 2019 (January-June), the total value of China's imports and exports to the United States was 1.75 trillion yuan (RMB), down 9 per cent. The United States has been overtaken by the Association of Southeast Asian Nations (ASEAN). According to countries and regions, the United States has dropped to the third place among China's trading partners, and the gap between the United States and the European Union, which ranks first, is widening. The total value of China's imports and exports to the EU was 2.3 trillion yuan, an increase of 11.2 percent, and the total value of China's imports and exports to ASEAN was 1.98 trillion yuan, an increase of 10.5 percent.

Fundamentals: on the cost side, SMM calculates that the weighted average full cost of China's electrolytic aluminum industry in July was 13105 yuan / ton, down 717 yuan / ton from June to June. The total cost profit capacity of domestic electrolytic aluminum was 29.225 million tons, accounting for 79.9%. From June to July, the alumina profit process has not yet ended. Demand side, yesterday SMM statistics domestic electrolytic aluminum social inventory 1.043 million tons, compared with last Thursday continued to increase 1000 tons, the main consumer areas only Shanghai, Wuxi, Gongyi region inventory lower than last Thursday; according to SMM follow-up understanding, the spot market low iron aluminum ingots and general aluminum price difference continues to narrow, mainly due to the growth of low iron and aluminum supply and demand side recycled aluminum and hub market performance is weak.

Spot: the transaction price between Shanghai and Wuxi on Monday morning was between 13800 and 13820 yuan / ton, between 10 yuan / ton and 10 yuan / ton for that month, up nearly 80 yuan / ton from Friday. With the rise of aluminum futures, the market quotation began to be confused, concentrated between 13830 and 13850 yuan / ton, between 10 yuan / ton and 10 yuan / ton for the current month, up more than 100 yuan from Friday. In the morning, the supply of goods in the market is sufficient, the holder is actively shipping, driven by the rhythm of receiving more than 10,000 tons of goods, the market transaction is active, the middleman trading is also active, the spot price rises sharply after 11: 00, the market transaction activity drops obviously, because the market is close to the moon change and the market is expected to rise discount in the future, the holder is slightly higher, although the receiver is many but more afraid of high, the transaction performance of both buyers and sellers is deadlocked at this time. After the return of the downstream weekend, there will be some replenishment on Monday, and it will be all right to receive the goods. The overall transaction in East China yesterday was better.

Summary: the domestic alumina and other raw material prices continue to fall so that the cost side is still in the downward channel, and the domestic electrolytic aluminum inventory has become exhausted, and the short-term aluminum price rebound fluency is limited, but based on the expectation of the consumption peak season in September, it is suggested that the layout of 13500 yuan to 13800 yuan per ton should be attempted, and the positive position inside and outside the borrow, which can pay attention to 0912 contract, should continue to be held, but it is not recommended to open a new one.

(SMM Li Hao 021 5166 6863)