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[minutes of SMM Morning meeting] Macro-positive superimposed fundamentals support the short-term trend of electrolytic aluminum price is still strong.
Jul 13,2020 10:03CST
translation
Source:SMM
The macro positive superposition fundamentals support the short-term trend of electrolytic aluminum price is still strong.
The content below was translated by Tencent automatically for reference.

SMM internal aluminum morning meeting minutes panel: last Friday, basic metals generally climbed high buildings again. Lomalco closed at US $1689 / ton yesterday, up 2.43%, or US $40 / ton. Shanghai Aluminum's main 2008 contract rose 2.23%, up 320 yuan / ton, to close at 14650 yuan / ton. The dollar index fell 0.13% to 96.656.

Macro aspect: 1) according to the real-time data of Johns Hopkins University in the United States, according to the statistics of Johns Hopkins University in the United States, as of around 6:45 on July 13, Beijing time, a total of 3292934 confirmed cases of new crown pneumonia and 135140 deaths have been reported in the United States. The World Health Organization reports that the number of confirmed cases of new crown pneumonia worldwide has increased by 230000 in the past 24 hours, a record increase. (bearish money) 2) Central Bank: at the end of June, the balance of broad money (M2) was 213.49 trillion yuan, an increase of 11.1 percent over the same period last year, the growth rate was the same as that at the end of last month and 2.6 percentage points higher than the same period last year; the balance of narrow money (M1) was 60.43 trillion yuan, an increase of 6.5 percent over the same period last year, and the growth rate was 0.3 percentage points lower than at the end of last month and 2.1 percentage points higher than the same period last year; The balance of currency in circulation (M0) was 7.95 trillion yuan, an increase of 9.5% over the same period last year. The net cash input in the first half of the year was 227 billion yuan. 3) the central bank will carry out a seven-day reverse repurchase of 50 billion yuan. As there is no reverse repurchase due today, it will achieve a net investment of 50 billion yuan on the same day. (lidocaine)

Fundamentals: 1) Japanese aluminum buyers set the aluminum premium for the July-September quarter at $79 a tonne, down 3.7% from the previous quarter, as demand was hit by the new crown epidemic. Aluminium rose $82 a tonne in the April-June quarter, marking the fourth consecutive quarterly decline, the lowest level since the October-December 2016 quarter and below producers' initial offer of $85. 2) SMM weekly electrolytic aluminum downstream operating rate: this week, the start-up of leading aluminum downstream enterprises increased slightly by 0.4% to 77.3%, mainly due to a small increase in the start-up of some primary alloy enterprises. However, downstream hub enterprises have a high-temperature holiday habit in the hot weather in July, and this growth may be difficult to continue. Other downstream plates are relatively stable as a whole, including aluminum profiles, aluminum foil orders performance is better, most orders can still be scheduled to August. New orders for aluminum strip and cable weakened, scheduling and delivery time were shortened. The recycled aluminum industry is still mainly impacted by imported aluminum alloy ingots, so it is difficult to recover significantly in the short term, and July is the traditional off-season, and there are plans to reduce production and holiday in the lower reaches of the high temperature, and the actual start-up may still decline. (bad luck)

Last Friday morning, the spot price in Shanghai was between 14760 and 14790 yuan / ton, and the price in Wuxi was between 14780 and 14800 yuan / ton. With the rapid rise of aluminum futures, the spot price in Shanghai was concentrated between 14790 and 14810 yuan / ton in the later period, and the price in Wuxi was between 14800 and 14820 yuan / ton. The overall price in East China was nearly 270 yuan / ton higher than yesterday, and the rising water was concentrated between 140,180 yuan / ton. The price in Hangzhou is between 14800 and 14830 yuan per ton. The shortage of goods supply still did not ease on Friday. There were many people picking up goods early in the morning, but there were few shippers. With the sharp rise in aluminum prices, the holder's willingness to ship goods increased, but the standing price remained the same. On the whole, middleman buyers and sellers are limited by the low supply of goods in circulation, and the transaction performance is general. Downstream on-demand stock, due to the sharp rise in aluminum prices, although approaching the weekend, but the willingness to buy is not high. The overall transaction in East China was mediocre last Friday. In the afternoon, aluminum continued to rise sharply, with the price quoted by the holder between 14780 and 14910 yuan / ton, while the price rose to 180 yuan per ton. The quotation was chaotic, the wait-and-see mood was strong, and the actual transaction was very few. Spot transactions this morning focused on rising water around 60 yuan / ton in the same month.

Conclusion: from a macro point of view, the development of the global epidemic situation abroad is still not optimistic, and the growth rate of new infections has reached a record high in the past 24 hours. Domestically, the central bank's reverse repurchase operations continue to normalize, stabilize and maintain a certain degree of liquidity in the market. From a fundamental point of view, the current inventory warehouse receipts are still low, the overall liquidity of spot transactions is still tight, and electrolytic aluminum prices are still steadily supported in the short term. in the future, we need to continue to pay attention to the changes in downstream demand reflected by changes in downstream operating rates, social inventory warehouse receipts and so on.

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