[summary of internal morning meeting of SMM aluminum] Shanghai and London aluminum performance wide shock electrolytic aluminum social inventory down in the off-season

7.26 minutes of SMM internal aluminum morning meeting

Market surface: yesterday morning opened at US $1827 / ton, in the Asian session after the bottom of US $1818 / ton wide shock operation, finally closed at US $1826.5 / ton, up US $2 / ton, up 0.11%; the overnight Shanghai Aluminum main Company 1909 contract opened at 13890 yuan / ton, closed at 13910 yuan / ton, up 115 yuan / ton from the opening of the day, mainly to increase positions.

Macro: (1) China and the United States will meet in Shanghai from July 30 to 31 to begin the 12th round of high-level economic and trade consultations between China and the United States on the basis of equality and mutual respect, Gao, spokesman for the Ministry of Commerce of China, said on the 25th. The resumption of economic and trade consultations is an important consensus reached at the Osaka meeting between the two heads of state, and is not directly related to trade procurement; (2) by July 20, the number of initial jobless claims (10,000) in the United States reached the lowest level since April this year, with a previous value of 21.6, an expected 21.9, and a published rate of 20.6; and (3) the monthly rate of durable goods orders in the United States in June was better than expected, with a previous value of-1.3%, an expected rate of 0.7%, and a published rate of 2%. (4) the European Central Bank issued an interest rate resolution on Thursday night, leaving the main refinancing rate unchanged at 0.00%, the deposit rate at-0.40% and the marginal lending rate at 0.25%. The president of the European Central Bank said inflation expectations were falling and inflationary pressures remained moderate, followed by data indicating that economic growth would weaken in the second and third quarters.

Fundamentals: cost side, yesterday SMM alumina region weighted quotation and Australia FOB price than the previous day stable operation. Inventory, SMM statistics yesterday, the national electrolytic aluminum social inventory of 1.035 million tons, down 7000 tons compared with last Thursday, consumption off-season inventory mainly due to East China, South China and other major consumer places of aluminum ingots arrived less, downstream and middlemen due to Tuesday to Thursday prices fell this year, so the purchasing efforts have been strengthened, contributing to the increase in the output of the warehouse; SMM statistics of the main domestic consumption of low aluminum rod inventory of 82700 tons, compared with last Thursday continued to increase by 1600 tons, Foshan, Wuxi area inventory has increased.

Spot: on Thursday, the spot price between Wuxi and Shanghai was between 13860 and 13880 yuan / ton, about 10 yuan / ton on the flat surface, up 90 yuan / ton from the previous day, and the price in Hangzhou was between 13880 and 13890 yuan / ton. As a result of yesterday's surge in aluminum prices, the receipt of a large household decreased, the holder's monthly invoice supply is limited, the shipment is not much higher prices, middlemen due to the existence of replenishment and ticketing demand still shows an obvious willingness to receive goods, the market due to traders trading led to active trading performance, spot prices are strong. Downstream fear of high, basic on-demand goods, the performance of calm. The overall deal in East China was better on Thursday.

Summary: aluminum consumption has entered the off-season, the cost end is still in the downward stage, and the 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 from the cost of alumina, rather than the absolute price of electrolytic aluminum. Therefore, it is not recommended to keep up with the high. It is suggested that the callback can be arranged in 13500 to 13800 yuan / ton position, and the structure is concerned about 0912 contracts. Positive internal and external positions continue to be held, but new positions are not recommended.

(SMM Li Hao 021 5166 6863)