[summary of SMM Aluminium Internal Morning meeting] the cost end is expected to decline in April in the aluminum processing industry.

4. 1 minutes of SMM aluminum internal morning meeting

Trading: yesterday, the dollar index fell back to 98.93, down 0.08%. Lun aluminum continued to dive yesterday, approaching the $1500 / ton mark, hitting a low of $1507 / ton, refreshing the lowest level since the end of March 2016. closed at $1525 / ton, down $3.50 / ton, down 0.23%, closed in the Xiao Yin line, Shanghai aluminum main 2006 contract closed yesterday at 11590 yuan / ton, up 50 yuan / ton, up 0.43%.

Macroscopically: 1) Premier Li Keqiang presided over an executive meeting of the State Council on March 31 to determine the issuance of a number of special local government debt lines in advance to promote the expansion of effective investment; to deploy and strengthen financial support for small and medium-sized enterprises, increase the reloan and rediscount amount of 1 trillion yuan for small and medium-sized banks; and require greater subsidies to groups in need. In order to promote automobile consumption, the meeting decided that the first is to extend the policy of subsidy and exemption from purchase tax on the purchase of new energy vehicles for two years. Second, the central government has adopted awards instead of subsidies to support the elimination of diesel trucks with emission standards of country III and below in key areas such as Beijing, Tianjin and Hebei. Third, VAT will be levied on the sale of used cars by used car dealers from May 1 to the end of 2023 on the basis of 0.5% reduction in sales. 3) on April 1, Beijing time, US President Donald Trump called on Congress to provide $2 trillion for US infrastructure to seize the opportunity of the coronavirus outbreak to press ahead with one of his long-term priorities. (Lido)

Fundamentals: 1) in March, the comprehensive PMI of the aluminum processing industry was 65.5, 30.8 percentage points higher than that in February, and 0.9 percentage points higher than last year. The main reason for the larger month-on-month increase was that in February, the overall production and operation of the aluminum processing industry was significantly affected by the epidemic situation, and with the gradual control of the domestic epidemic situation, the downstream resumption of work and production raised the progress, and the overall prosperity of the industry also rebounded. However, it should be noted that the improvement of PMI in March indicates that the production and management status of enterprises is significantly better than that in February, which does not mean that the aluminum downstream processing industry has fully returned to the pre-epidemic level or achieved a trend improvement. At present, aluminum plate and strip, aluminum wheels and recycled aluminum exports have suffered obvious setbacks, although the profile, aluminum foil and aluminum cable industry is relatively stable, but the stamina is insufficient. Overall, PMI is expected to fall back significantly in April. (bearish) 2) it is understood that the purchase price of Weiqiao prebaked anode yesterday was about 170 yuan lower than that of the previous month, and the current price has dropped to 2660 yuan / ton. The price of raw material petroleum coke is in a downward trend in late March, and the price range of local refineries is about 800-1000. Although the price of raw material petroleum coke continued to fall in March, the decline is limited, and future prices are expected to fluctuate in this range. Due to the continuous stop and reduction of production in the electrolytic aluminum plant and the weak demand for anode, the current prebaked anode pressure is obvious, and the overall mood is pessimistic. (bearish price correction) 3) recently, the price of aluminum poles in Shandong has been revised back, from a peak of 1600 yuan / ton in February to about 800 yuan / ton at present, mainly due to the price correction of a large aluminum rod factory in Shandong, leading to a synchronous pullback of processing fees in Shandong and even Henan and Inner Mongolia. at present, the stamina of aluminum rod orders is insufficient. (negative)

Spot side: yesterday, Shanghai Wuxi area holder quoted between 1148011500 yuan / ton, compared with the previous day price rose 10 yuan / ton, the disk sticker 80-60 yuan / ton around, 11: 00 after the slight increase in aluminum prices around 11510 yuan / ton, Hangzhou area price between 11520-11540 yuan / ton. Yesterday, the shippers were more active than yesterday, the middlemen were more willing to receive the goods, and the two sides could make a deal. Downstream normal procurement yesterday, the receiving status did not improve significantly compared with the previous day. East China as a whole closed yesterday in general.

Summary: at present, under the haze of the epidemic, the global macro air atmosphere has not changed, and aluminum prices continue to be suppressed by macro emotions. on the fundamentals, although inventories appear at the beginning of the inflection point, the stock is still high, the cost end is down, and export consumption is expected to fall obviously from April to May. Short-term aluminum prices are still under pressure, and downside risks still exist. Pay attention to the changes in inventories in the later stage and the recovery of domestic and foreign consumption on the size of the upward driving force of aluminum prices. In addition, attention should be paid to the driving and role of the relevant stimulus policies that may be introduced by the state on the market.

(SMM Xuman 021-51595898)