7.30 minutes of SMM internal aluminum morning meeting
Trading surface: Monday Lun aluminum opened at US $1806.5 / ton, after a brief consolidation after the bottom of US $1796 / ton, and then gradually rose in the night trading, touching US $1816.5 / ton to close at US $1814.5 / ton, up US $8 / ton, or 0.44%. The 1909 contract of Shanghai Aluminium Company opened at 13880 yuan / ton at night and rushed to 13950 yuan / ton after opening, ending at 13940 yuan / ton, up 45 yuan / ton from the opening of the day.
Macro: (1) US officials have said that they will not consider using fiscal instruments to suppress the exchange rate of the US dollar for the time being, causing the US index to continue to climb after breaking its high of 98, closing yesterday at 98.062 points, up 0.01 percent. (2) the 12th round of high-level Sino-US economic and trade consultations will be held in Shanghai today. (3) British Prime Minister Boris Johnson said he will not negotiate with EU leaders on Brexit unless EU leaders agree to restart the Brexit agreement reached between Theresa May, his predecessor, and the EU. So far, however, EU officials have rejected Johnson's request; (4) the China Development and Reform Commission issued "key points for reducing corporate leverage in 2019."
Fundamentals: on the supply side, China imported 9.303 million tons of bauxite in June 2019, down 4.17 percent from the previous month, an increase of 24.95 percent over the same period last year. The three countries with the largest imports are still Guinea, Australia and Indonesia. Vedanta's revenue profit in the last quarter both fell alumina production increased by 37% compared with the same period last year, and the current domestic alumina production has reduced by 2.2 million tons. On the demand side, China's aluminum foil exports totaled 115900 tons in June 2019, 125000 tons in May, down 7.29 percent from the previous month, and 113500 tons in June last year, up 2.1 percent from a year earlier. Aluminum foil products under each tariff number fell month on month; in terms of inventory, SMM counted the social inventory of electrolytic aluminum at 1.029 million tons on Monday, down 6000 tons from last Thursday. According to SMM, the arrival of goods from major consumer places such as eastern China last week was lower than the previous week, and there was a low price hoarding in some of the lower reaches of Guangdong.
Spot: in the afternoon, Shanghai Wuxi two places aluminum ingot spot transaction price between 13860 to 13870 yuan / ton, flat water on the plate-up 10 yuan / ton, down 60 yuan / ton from Friday, the difference between the monthly ticket and the next month ticket price is less than 10 yuan / ton, a large household receives nearly 10,000 tons in the morning, the holder is very active to the price, the shipping is very active, the middleman's willingness to reverse the goods is obvious, the goods can be received, and the market trading is more active. Downstream due to Friday procurement volume is less this week back to the need for replenishment, coupled with Monday aluminum prices fell to an acceptable range, the receipt of goods is good. The overall deal in East China was better on Monday. On Monday, the price difference between Guangdong and Shanghai remained near Pingshui. The spot price of aluminum ingots in Guangdong was 13860 to 13870 yuan per ton. Traders traded well, and there was a strong wait-and-see mood downstream and received few goods.
Summary: recently in the Federal Reserve interest rate and China and the United States new round of trade negotiations important node, aluminum consumption is still off-season, the current electrolytic aluminum industry profits have been repaired, but not from the absolute price of a sharp rise, and from the alumina link profit flow to the electrolytic aluminum link, the current electrolytic aluminum overall supply pressure is relatively limited, it is expected that the short-term aluminum will maintain a slightly strong concussion trend. Shanghai Aluminium 0912 contract to back structure, in line with our expectations, internal and external arbitrage position is not recommended to open, do not have strong logical support for the time being.
(SMM Li Hao 021 5166 6863)