4.2 Summary of SMM Aluminum Internal Morning meeting

Trading: yesterday's dollar index closed at 99.457, up 0.527, or 0.53%, to close at the small positive line. Lunalco closed yesterday at $1495 / tonne, falling below the $1500 / tonne mark and hitting a low of $1483.5 / tonne since late March 2016. LME aluminium stocks rose 15450 tonnes to 1164200 tonnes yesterday.

Macro: 1) on April 2, real-time statistics released by Johns Hopkins University showed that as of 06:04 Beijing time on the 2nd, a total of 932605 cases had been confirmed and 46809 deaths had been diagnosed worldwide. Among them, the country with the largest number of confirmed cases is the United States, with a cumulative total of more than 210000 cases. (bearish) 2) US ADP employment in March (10,000), previous value: 18.3, expected:-15, announced:-2.7, the lowest level since January 2010. The final value of Markit manufacturing PMI in the United States in March, previous value: 49.2, expected: 48, announced: 48.5, PMI value hit the lowest level since August 2009. The three major US stock indexes, the Dow and the S & P 500, fell more than 4 per cent yesterday. (bearish) 3) China's Caixin manufacturing PMI, in March: 40.3, expected: 45.5, announced: 50.1. China's Caixin manufacturing PMI rebounded above the rise and fall line in March. (a lot of money)

Fundamentals: 1) at present, the production reduction or overhaul of the aluminum plant involves a production capacity of about 620000 tons. If the aluminum price continues to decline in the future to compress the profit margin of the electrolytic aluminum plant until it exceeds the full average cash cost, the scope of production reduction in the future will be further expanded. (lido) 2) it is understood that at present, the domestic electrolytic aluminum plant has the sentiment of cherishing the sale, considering that the aluminum price is too low and there are expectations of a rebound in the future aluminum price, showing signs of hoarding, the pressure on the goods is not more obvious. (lido) 3) the current market aluminum downstream processing plate for the future market demand expectations of the overall blank, although the aluminum profile market performance is stable and good, but aluminum sheet foil, alloy and cable performance is general, the end market, real estate and construction engineering market demand preference, packaging industry, automotive industry and power electronics industry performance is weak. (negative)

Spot end: yesterday, Shanghai Wuxi area holder quoted between 11510-11530 yuan / ton, compared with the previous day price increased by 30 yuan / ton, the disk surface sticker 50-30 yuan / ton, Hangzhou area price between 11540-11560 yuan / ton. The recent market spot loose situation is less than last week, part of the upstream electrolytic aluminum factory shipment is less, the performance cherishes the sale, the trader in the hands of the supply is slightly tight, receiving the goods yesterday is very positive, the holder offers the price situation obviously, in addition, a big customer starts this month purchase plan yesterday, overall, the transaction between trading business yesterday is OK.

Summary: at present, the expectation of tax reduction in the market is relatively strong. In view of the arbitrage gap before and after the tax reduction, the short-term demand for aluminum ingots in the market has increased significantly. All metal disks, including aluminum, show a Back structure. However, it is important to note that the tax reduction news may be falsified, and the aluminum price is still under pressure under the macro overall air mood. Guard against the suppression of aluminum prices caused by the sharp increase in inventory caused by the inventory in the follow-up aluminum plant and the centralized storage of aluminum ingots in transit.

(SMM Xuman 021-51595898)