SMM Network News:
Spot, LME zinc spot discount of US $11.50 / ton, compared with the previous trading day discount of US $9.50 / ton. According to SMM, Shanghai 0 # zinc mainstream transaction 19320 yuan / ton, 0 # ordinary August water 70 to 80 yuan / ton; traders trading replenishment demand has declined, the morning market rising water quotation is only slightly raised to 70 to 80 yuan / ton, the high price quotation is more concentrated, the direct transaction is relatively less, the long order transaction with the average price is still relatively concentrated.
In terms of inventories, LME zinc stocks decreased by 1100 tons to 78600 tons on 22 July. According to my non-ferrous metal, the stock of zinc ingots in China on July 22 is 149200 tons, an increase of 4200 tons over the previous week.
Viewpoint: yesterday LME zinc spot discount continued to expand, reflecting the recent loose supply of foreign spot market, in addition, domestic zinc began to accumulate again, zinc prices have weakened. The increment of zinc supply side on supply and demand side is still in the process of realizing gradually, so it is suggested that zinc should maintain the idea of short selling at every high level. In the middle line, the supply of zinc mine TC high shock, mine supply loose expectations have been gradually verified, zinc smelting profits to maintain high, refinery start-up difficult to maintain low for a long time, the increase of zinc mine supply will be gradually transmitted to the ingot end, metal end supply increment will also increase, zinc ingot supply will increase, it is expected that the follow-up risk will be gradually reduced. On the whole, there is still downward room for zinc in Shanghai in the medium term.
Strategy: unilateral: cautious bearish, short holding. Cross-market: importers focus on positive arbitrage opportunities.
Risk point: inventory did not accumulate as scheduled, macro risk.
Spot, LME aluminum spot discount of US $24.25 / ton, compared with the previous trading day discount of US $18.25 / ton. According to SMM, Shanghai aluminum trading price between 13830 to 13850 yuan / ton, the monthly market discount of 20 to 10 yuan / ton, downstream last week due to fear of high wait-and-see overall procurement is not much, today's spot aluminum ingot high down, in the context of several consecutive days of raw material inventory, today's replenishment is more active. On the whole, the transaction in East China is better today.
On the inventory side, LME aluminium ingot stocks fell by 7400 tons to 966600 tons on July 22. According to my non-ferrous metal, on July 22, the domestic social inventory of aluminum ingots increased by 6000 tons to 1.048 million tons compared with last Thursday.
Viewpoint: domestic electrolytic aluminum inventory continues to accumulate, and orders are expected to fall further in August, so the aluminum market may remain in a cumulative state. In July, with the production of domestic alumina and the production of production enterprises gradually stable, the cost-side support of electrolytic aluminum continued to decline. At present, the profit space of electrolytic aluminum production capacity has been greatly increased, or the process of electrolytic aluminum production has been accelerated. The middle line sees that the domestic smelting supply capacity is gradually rising, with the repair of electrolytic aluminum profits, the supply release pressure is still large in the second half of the year, and the supply pressure at the cost end of the middle line is still large. It is expected that the reduction scale of electrolytic aluminum production will be difficult to expand and the new production capacity will be released as scheduled. The upward driving force of the aluminum market in the medium term is not large, and the bottom is also supported by costs. It is recommended to operate in the band between 13500 and 14200.
Strategy: unilateral: neutral, price is expected to fluctuate in a narrow range, it is recommended to sell high and absorb low in the range. Cross-market: it is recommended that the import loss be narrowed to around 500 for positive arbitrage.
Risk point: macro risk. (source: Huatai Futures)