[minutes of SMM Aluminum Internal Morning meeting] Alumina allows profits to continue, and inventory is a little tired than last Thursday.

7.23 minutes of SMM internal aluminum morning meeting

Market surface: yesterday, the aluminum opened at US $1846 / ton in the morning, consolidated in a narrow range in the Asian session, and then fell, closing at US $1813.5 / ton, down US $33.50 / ton, down 1.81%. The day's K line closed at one big shade line, basically giving back all its gains last week; the 1909 contract of Shanghai Aluminum main Company opened at 13840 yuan / ton at night, closing at 13825 yuan / ton, down 55 yuan / ton from the opening of the day.

Macro: (1) in the past six working days, the central bank has invested more than 700 billion yuan through open market operations, and nearly trillion yuan of central bank reverse repo and MLF due this week. The implementation of hedges by the central bank is worth looking forward to. At the same time, the targeted medium-term lending convenience (TMLF) operation window will also be opened; (2) according to CME "Fed observation", the probability of the Fed cutting interest rates by 25 basis points to 2.00% 2.25% in July is 77.5%, the probability of cutting interest rates by 50 basis points is 22.5%, the probability of cutting interest rates from 25 basis points to 2.00% to 2.25% in September is 25.7%, and the probability of cutting interest rates by 50 basis points and 75 basis points is 59.3% and 15%, respectively. (3) the Baltic dry bulk index hit another five-year high, up 21:00, or 1%, to 2191.

Fundamentals: cost side, SMM alumina region weighted offer 2527 yuan / ton, down 20 yuan / ton compared with Friday. Inventory, Monday SMM statistics domestic electrolytic aluminum social inventory of 1.047 million tons, an increase of 5000 tons compared with last Thursday, South China Sea, Linyi area inventory increased, Shanghai, Wuxi and Gongyi region inventory fell slightly.

Spot: on Monday, the transaction price between Shanghai and Wuxi was between 13830 and 13850 yuan / ton, and the discount for the current month was about 20 to 10 yuan / ton, which was more than 60 yuan / ton lower than that on Friday. The trading price of aluminum ingots in Hangzhou was between 13840 and 13860 yuan / ton. In the morning, a large household received nearly 10,000 tons in East China, the holder shipped more actively, because the price fell back middleman to receive the goods, the buyer and seller were active. Downstream last week due to fear of high wait-and-see overall procurement is not much, yesterday spot aluminum ingots fell back, in a few consecutive days of consumption of raw materials inventory background, replenishment is more active. Overall, East China had a better deal on Monday.

Summary: the early performance of aluminum prices is mainly affected by macro US monetary policy, but aluminum consumption has entered the off-season, and the cost side is still in the downward stage, and short-term fundamentals are under pressure. Based on the expectation of accelerating storage in the peak season in September, the electrolytic aluminum industry should give profits, but the profits of the industrial chain have been given away from the cost of alumina, rather than the rise in the absolute price of electrolytic aluminum, so it is not recommended to continue to catch up. It is recommended that the callback can be in 13500 to 13800 yuan / ton position waiting for the layout of multiple orders, structural attention to 0912 contracts to buy near and far, internal and external positive positions continue to hold, but do not recommend new opening.

(SMM Li Hao 021 5166 6863)