[minutes of SMM Morning meeting] strong destocking of aluminum ingots narrowed aluminum prices in the short term.

Summary of SMM Internal Aluminium Morning meeting on May 26th

Market: overnight Shanghai aluminum main 2007 contract opened at 12805 yuan / ton, closed at 12840 yuan / ton, an increase of 0.39%, trading volume reduced to 81000 lots, position of 158000 lots. The daily line closed at Xiaoyang, shrinking and rising. LME was closed for the UK spring bank holiday yesterday. The dollar index closed down 0.027, or 0.03%, at 99.786.

Macro aspect: 1) Real-time data from Johns Hopkins University in the United States show that as of 8: 00 on May 26, there were nearly 5.5 million confirmed cases of new crown pneumonia worldwide, reaching 5490954 cases, of which 1.66 million cases were confirmed in the United States. (negative) 2) many foreign countries have begun to restart their economies, and all non-essential retail stores in Britain will reopen from June 15. Japanese Prime Minister Shinzo Abe announced at a press conference on the 25th that the national state of emergency in Japan will be lifted. 3) on May 25, the Minister of Ecology and Environment said at the second "ministerial channel" of the two sessions of the National people's Congress in 2020 that the second round of central environmental protection inspectors would be launched this year, mainly around the implementation of some major decisions and arrangements of the CPC Central Committee and the State Council on eco-environmental protection and the construction of ecological civilization, and around some prominent eco-environmental problems reflected by the common people. As well as the implementation of the key tasks of the pollution prevention and control campaign to carry out inspectors. On May 25, Minister of Industry and Information Technology Miao Wei said on the "Minister Channel" that automobile production in April had basically reached the level of the same period last year. (lidocaine)

Fundamentals: 1) on May 25th, SMM counted the domestic social inventory of electrolytic aluminum (including SHFE warehouse receipts): 128000 tons in Shanghai, 37.3 tons in Wuxi, 52000 tons in Gongyi, 184000 tons in the South China Sea, and 924000 tons of aluminum ingots for consumption, down 55000 tons from the previous Thursday. The weekly output of aluminum ingots is 153600 tons, the weekly output of aluminum ingots is 24700 tons less than the previous month, the weekly output of aluminum bars is 42900 tons, and the weekly output of aluminum bars is 6200 tons. From January to April, Shenhuo Group produced a total of 269500 tons of aluminum products, 20700 tons of cold-rolled coil and 8700 tons of aluminum foil. Compared with the same caliber in the same period last year, the physical volume has increased. In April, the import of unwrought aluminum alloy (76012000) was nearly 63900 tons, down 23.2% from the previous month, an increase of 601.8% over the same period last year. (bullish)

Spot side: yesterday, the spot transaction price in Wuxi area of Shanghai was between 13250 and 13270 yuan / ton, the price was 130 yuan / ton higher than that of the previous day, the rising water was between 90muri 110 yuan / ton, and the price in Hangzhou area was between 13270Mui 13290 yuan / ton. Yesterday, a large family carried out a normal procurement plan, and the shippers were more active. Due to the need to hand in long orders and normal resale trade demand, some middlemen were able to pick up the goods. The trading between the two sides was more active, and the market transaction atmosphere dropped at 11:00. Shippers increased significantly. Downstream normal replenishment on the same day, general willingness to receive goods. The overall transaction in East China was mediocre that day.

Summary: from a macro point of view, economic activities in some overseas areas have been restarted one after another, and the domestic macro atmosphere has also continued to warm up; fundamentals continue to go to the warehouse to form a strong support for Shanghai aluminum. It is expected that Shanghai aluminum will still be dominated by strong shocks in the short term, and the price difference will remain strong the next month. In addition, the inventory of warehouse receipts in the previous period has continued to decline in recent weeks, falling to about 120000 tons as of yesterday, paying attention to the possibility of continuous expansion of price spreads in recent months.

(SMM Li Hao 021Mui 51666863)