[summary of SMM Aluminium Internal Morning meeting] the price of scrap aluminum is tighter than that of primary aluminum.

4.9 minutes of SMM Aluminium Internal Morning meeting

Trading: yesterday's dollar index closed at 100.14, up 0.177, or 0.18%. Lunalco closed yesterday at $1469 / ton, down $9 / ton, or 0.61%, closed at the small negative line, the low refreshed the lowest level since mid-January 2016, LME aluminum stocks rose another 13700 tons yesterday, Shanghai aluminum main 2006 contract closed yesterday at 11620 yuan / ton, the closing price was the same as yesterday.

Macro view: 1) Real-time statistics released by Johns Hopkins University in the United States show that as of 05: 07 Beijing time on April 9, 2020, a total of 1500830 cases were confirmed worldwide, 87706 cases died, and a total of 184 countries and regions were diagnosed. Among them, the cumulative number of confirmed cases in the United States is more than 420000. (bearish) 2) crude oil, boosted by hopes that the Organization of Petroleum Exporting countries (OPEC) and its allies will reach an agreement to cut production on Thursday, both the United States and Brazil rose sharply, with Russia preparing to cut production by 1.6 million barrels a day, according to Russia's Tass news agency on Wednesday. (lido) 3) the Federal Reserve released minutes of its meetings on March 2 and March 15, showing that zero interest rates will remain until the economy wears the impact of the new epidemic. The World Trade Organization (WTO) predicted on Wednesday that trade in goods would shrink even more this year than in the era of the financial crisis, with global trade falling by 13-32 per cent. In addition, the WTO expects global GDP to shrink by 2.5-8.8 per cent this year. (negative)

Fundamentals: 1) according to SMM data, China's alumina production in March (31 days) was 5.668 million tons, including 5.434 million tons of metallurgical grade alumina, down 1.75% from the previous month and 9.72% from the same period last year. By the beginning of April, the operating capacity of metallurgical grade alumina had increased to 64.28 million tons, and the output of metallurgical grade alumina was expected to be 5.257 million tons in April (30 days). Domestic high-cost alumina production capacity will once again face the choice of production reduction. (lido) 2) in March 2020 (31 days), China's electrolytic aluminum output was 3.036 million tons, an increase of 1.9 percent over the same period last year. By the end of March, the operating capacity of electrolytic aluminum in China was 36.21 million tons per year, with an annual capacity of 41.23 million tons per year. The operating rate of electrolytic aluminum enterprises in China was 87.8%, which was 1.5 percentage points lower than that at the end of February 2020. 10 domestic electrolytic aluminum enterprises have been affected by the decline in aluminum prices to focus on maintenance, SMM statistics cumulative maintenance capacity rose to 655000 tons / year, and with the continued downturn in aluminum prices, the proportion of production capacity with cash loss remains high, thus driving the scale of electrolytic aluminum production reduction to continue to rise. (Lido aluminum supply) 3) the recent shortage of waste aluminum supply, mainly due to the early high price inventory of waste aluminum suppliers are now sold at low prices, and under the background of the epidemic, the transportation of imported waste aluminum is blocked, the supply of waste aluminum market is tight, but the demand is relatively strong, and the price of waste aluminum is expected to be stronger than that of primary aluminum in the short term. (Lido)

Spot end: yesterday morning in Shanghai Wuxi area holder quotation between 11540-11560 yuan / ton, compared with the previous day price fell 90 yuan / ton, with the aluminum price upward, 11: 00 after the holder quotation began to concentrate in 11580-11590 yuan / ton, Hangzhou area before noon price concentrated in 11570-11580 yuan / ton. Morning shippers are more active, middlemen can trade, with aluminum prices upward, shippers converge, although middlemen have demand for goods, it is difficult to close a deal at this time. Downstream yesterday on-demand procurement, as the price of aluminum fell slightly ready.

Summary: at present, the epidemic situation abroad has not yet appeared a significant inflection point, the number of confirmed cases in the United States, Japan, Spain, Italy and other countries is still rising, and aluminum prices are operating under pressure under the background of macro deflation. From a fundamental point of view, inventories are still relatively high. The superposition market has doubts about the upward trend of long-term consumption, and it is expected that the upward space of aluminum prices in the short term is limited, mainly due to weak volatility.

(SMM Xuman 021-51595898)