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[minutes of SMM Morning meeting] inventory decline continues to narrow trading volume of electrolytic aluminum
Jul 7,2020 09:57CST
The content below was translated by Tencent automatically for reference.

SMM internal aluminum morning meeting minutes on July 7th: basic metals turned red yesterday. Lomalco closed at $1635 / ton yesterday, up 1.43%, or $23 / ton. Shanghai Aluminum's main 2008 contract rose 0.64%, up 90 yuan / ton, to close at 14165 yuan / ton. The dollar index fell 0.39% to 96.784.

Macro aspect: 1) according to the real-time data of Johns Hopkins University in the United States, as of 22:33 on July 6, Beijing time, the number of confirmed cases of new crown pneumonia in the world had risen to 11477723, including 534938 deaths. The number of new confirmed cases in the United States remains at a high of about 50,000 in a single day. A total of 2888915 confirmed cases of new crown pneumonia and 129953 deaths have been reported in the United States. (bearish) 2) China's Caixin service PMI rose to 58.4 in June, the highest since May 2010, with an expected value of 53.2 and a previous value of 55. The final PMI value of the Markit services sector in the United States in June was 47.9; previous value: 46.7; expectation: 47. 3) ICE: in the second quarter of 2020, the average daily trading volume of energy futures (ADV) increased by 14% compared with the same period last year, of which the average daily trading volume of crude oil futures increased by 5%. (lidocaine)

Fundamentals: 1) SMM data: July 6, inventory in Guangdong and Henan region is tired, East China continues to go to the warehouse, domestic electrolytic aluminum social inventory decreased by 4000 tons to 715000 tons compared with last Thursday. (Lido) on July 5, 6063 aluminum rods were released from the warehouse weekly, totaling 45200 tons, an increase of 12200 tons per week, and an increase of 5300 tons over the same period last year. Alumina: yesterday's market trading continued the active trend of the previous Friday, with quotes from alumina plants and traders rising slightly. There has been a marked increase in inquiry in the north, but we have not yet heard of the scale of the transaction; the quotation in the southwest is also strong, but the spot circulation is tight, and the holders and alumina plants have a wait-and-see attitude. (lidocaine)

Spot side: yesterday, the spot price in Shanghai was between 14410 and 14420 yuan / ton, while the price in Wuxi was between 14430 and 14450 yuan / ton, which was slightly higher than that on Friday, and the rising water fell sharply to 50 yuan / ton of rising water. The supply tension in Wuxi market increased yesterday, and the price quoted by the holder was very strong, but relatively speaking, the supply in Shanghai area was more relaxed, and the price was 20 yuan / ton lower than that in Wuxi area. A large family normally announced its purchase plan, but the actual receipt of goods in Shanghai area was on the high side. Although the middleman is willing to accept the goods, it is more difficult to reach an agreement with the holder on the price, and the two sides have reached a stalemate. In addition, imports of aluminum increased significantly yesterday, suppressing the decline of rising water. From the downstream point of view, normal delivery is the main, procurement enthusiasm is not high. The overall transaction in East China was poor yesterday. Afternoon aluminum to maintain a range of shocks, the holder quoted price at 14450 Mel 14460 yuan / ton, on the disk surface rise water 50 Mel 60 yuan / ton around, the transaction is very light.

Conclusion: from a macro point of view, the rebound trend of foreign economic recovery is obvious, but the threat of the epidemic continues, and economic uncertainty still brings greater risks. From a fundamental point of view, the decline in social inventory of aluminum ingots further narrowed yesterday, with a strong willingness to stand price at the supply end, and downstream on-demand procurement, which was in line with the previous short-term aluminum price forecast, and electrolytic aluminum prices maintained a volatile upward trend in the short term.

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