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[summary of SMM Morning meeting] the decline in social inventory continues to narrow, and the raw material end gives a small support to aluminum prices.
Jul 3,2020 10:02CST
The content below was translated by Tencent automatically for reference.

July 3 SMM internal aluminum morning meeting minutes: yesterday's internal aluminum rally weakened, Lun aluminum closed yesterday at $1624 / ton, up 0.03%, up $0.50 / ton. Shanghai aluminum's main 2008 contract price was the same as the previous day, closing at 13980 yuan / ton. The dollar index fell 0.06 per cent to 97.212.

Macro aspect: 1) according to the real-time data of Johns Hopkins University in the United States, as of 02:10 on July 3, Beijing time, the cumulative number of confirmed cases of new crown pneumonia in the United States exceeded 2.7 million, reaching 2713195, and the cumulative death rate exceeded 128000. (bearish) 2) the unemployment rate in the United States was 11.1% in June and is expected to be 12.5%, compared with a previous value of 13.30%. Ministry of Commerce: from January to May this year, China's total import and export of services totaled 1.8686 trillion yuan, down 14.6 percent from the same period last year. From January to May this year, China's service exports totaled 759.26 billion yuan, down 2.3 percent, while imports totaled 1.10934 trillion yuan, down 21.5 percent. Ministry of Commerce: on the basis of previous research, the Ministry of Commerce, together with relevant departments, is stepping up efforts to study and formulate new measures to stabilize foreign trade and foreign investment. (lidocaine)

Fundamentals: 1) Today, Chinalco announced that under the influence of the market environment, combined with the actual situation of the company, the company plans to implement flexible production on three alumina production lines of Chinalco Shanxi New Materials Co., Ltd and Shanxi Huaxing Aluminum Co., Ltd., involving alumina production capacity of about 1.8 million tons. Wenshan Aluminum Co., Ltd. green aluminum project won 500 million loan support from China Merchants Bank. (Lido) 2) SMM statistics: weekly decline narrowed, electrolytic aluminum inventory fell 3000 tons to 719000 tons compared with the previous Wednesday. 3) Alumina: there was active trading in the alumina market yesterday, mainly due to the need for a deal, the southwest region actively purchased alumina spot, and there were large-scale transactions among large households in Shanxi, and alumina prices rose steadily. China Automobile Association: sales in the automobile industry are expected to complete 2.28 million vehicles in June, an increase of 4% over the previous month, and an increase of 11% over the same period last year. From January to June, cumulative sales in the automobile industry are expected to complete 10.24 million vehicles, down 17% from the same period last year. (lidocaine)

Spot side: yesterday morning, the spot price in Shanghai was between 14400 won 14410 yuan / ton. In the second trading stage, with the fall of aluminum futures, Shanghai prices began to concentrate between 14360 won 14380 yuan / ton, and around 130 yuan per ton of future aluminum rising water. In Wuxi area, the early spot price was between 14420 RMB14430 yuan / ton, and the later price was 14400 RMB14420 / ton, which was nearly 70 yuan / ton higher than that of the previous day, while the price of aluminum futures rose between 130150 yuan / ton. The spot price in Wuxi is relatively tight relative to Shanghai, and the price is on the high side. The spot price in Hangzhou is between 14410Mel 14430 yuan / ton. A large East China procurement plan of more than 10,000 tons yesterday, normal quotation, the shipment of the holder is still more active, the middleman is relatively less willing to receive the goods, and the trading between the buyer and the seller is poor, which is obviously not as good as the beginning of June. Yesterday, downstream on-demand procurement was dominated, as aluminum prices rose for several days in a row, taking into account the weakening of their own orders and the early part of the hoarding of goods, the recent purchase interest is not high. The overall transaction in East China was poor yesterday. In the afternoon, aluminum remained low and fluctuating, with the price quoted by the holder around 14310 yuan / ton, and the price rising water to the market was about 110yuan / ton. Only a small amount of transactions were made between traders, and there were few light transactions downstream. This morning, spot transactions were concentrated around 120 yuan / ton of rising water in the same month.

Conclusion: from a macro point of view, in foreign countries, the threat of the epidemic continues and the progress of economic recovery has achieved some results, but the mainstream view is still worried about the future economy. Domestic macro-monetary policy and fiscal policy steadily promote the economy, the domestic trade situation has improved, and foreign trade still faces challenges. Fundamentals, raw materials, alumina continued a small upward trend, trading activity has increased compared with the previous period. In terms of electrolytic aluminum, the range of warehouse reduction has further narrowed, and spot supply and demand is still in a tight balance. Raw material prices support superimposed spot circulation is tight, electrolytic aluminum prices are expected to maintain a strong shock trend in the future, taking into account the long-term fundamentals may weaken, electrolytic aluminum prices rise is limited.

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