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[summary of SMM Aluminium Internal Morning meeting] concerns remain about recycled aluminum using the primary aluminum price window to close downstream export orders
Apr 22,2020 09:45CST
Yesterday's dollar index closed up 0.249, or 0.25%, at 100.21, closing at a small positive line, while Lunal closed down $15, or 1%, at $1490 a tonne.
The content below was translated by Tencent automatically for reference.

4.22 minutes of SMM Aluminum Internal Morning meeting

Trading: yesterday, the dollar index closed up at 100.21, up 0.249, or 0.25%, closed at the small positive line. Lun aluminum closed yesterday at $1490 / ton, down $15 / ton, or 1%. The focus was below all the moving average except the 10-day moving average. The Shanghai aluminum main force 2006 contract closed yesterday at 12105 yuan / ton, down 235 yuan / ton, or 1.9%, closed at the small negative line, giving up almost all the gains in the previous two days. The low fell to around 12005 yuan per ton.

Macro: 1) according to the latest statistics of the new crown epidemic at Johns Hopkins University in the United States, as of about 5: 00 Beijing time on the 22nd, the number of confirmed cases of new crowns in the world has risen to 2.5465 million, and the number of deaths is 175800. The number of new confirmed cases in the United States rose to 816200, with 43900 deaths. (bearish) 2) due to shrinking demand, sharp increase in inventories and other reasons, oil prices collapsed for the second day in a row, and both US oil and cloth oil tumbled. Among them, June WTI crude oil futures fell below $7 / barrel, down more than 43%, closing at $11.57 a barrel, the lowest close since 1999. The Ministry of Finance released data on the 20th, showing that in the first quarter, the country's general public budget revenue was 4.5984 trillion yuan, down 14.3 percent from the same period last year. (neutral) 4) annualized total number of existing home sales in the United States in March (10,000 households), front value: 577, expected: 525, announcement: 527. Sales of existing homes in the United States fell at the biggest monthly rate in four and a half years in March. (bearish)

Fundamentals: 1) in March, due to the shortage of domestic waste aluminum supply, the price difference of original waste aluminum appeared, and the consumption of recycled aluminum increased greatly. After entering April, the aluminum price rebound made the price difference between recycled aluminum and raw aluminum quickly return to less than 1200 yuan / ton, and the price window of recycled aluminum has been closed. Although the domestic supply of waste aluminum remains tight, but in the downstream demand is not good, recycled aluminum prices will be difficult to repeat the previous large-scale primary aluminum consumption. 2) at present, the backlog of orders in the lower reaches of aluminum on the consumer side is gradually digested, and in addition to the bright recovery of orders in construction, medicine, infrastructure, basic consumption, and so on, the recovery speed of other domestic consumer sectors is relatively slow, and because the overseas epidemic situation is not yet completely under control, the problem of fault in export orders is gradually emerging. (bearish) 3) Alumina prices stabilized and rebounded. Yesterday, SMM quoted alumina weighted prices around 2123 yuan / ton, up 8 yuan / ton from the previous day. (Lido)

Spot end: yesterday morning Shanghai Wuxi area holder quotation between 1224012260 yuan / ton, the market trading is more active, the output and receiver performance is positive, 10: 30 after the aluminum fell, the holder quotation began to concentrate in 12210-11230 yuan / ton, due to the tight market circulation in the past two days, the rising water rose to 2040 yuan / ton, the individual holder quoted in the vicinity of 12200 yuan / ton, due to greater price fluctuations, In the later stage, the market transaction heat fell back, the holder wait and see attitude gradually rises, the Hangzhou area holder quotes in 12530-12550 yuan / ton vicinity. The downstream bought goods normally yesterday and did not hoard a lot of goods because of the sharp fall in aluminum prices.

Summary: in the medium term, the epidemic has caused downward concern in the global economy, and the resulting air atmosphere is difficult to dissipate. It is expected that the pressure above the short-term aluminum price will remain high. We need to pay attention to the relevant economic stimulus measures taken in Europe, the United States and China in this context. In terms of fundamentals, we should pay attention to the implementation effect of the production reduction and shutdown plan of the aluminum plant in the case of aluminum price shock, as well as the downstream consumption feedback of the terminal.

(SMM Xuman 021-51595898)

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