[minutes of SMM Morning meeting] Aluminium prices have rebounded slightly and spot prices drive the logic of futures prices to remain unchanged.

SMM internal aluminum morning meeting minutes on July 20th: Lun Aluminum closed at US $1663 / ton on the 17th, down 0.33%, or US $5.50 / ton. Shanghai Aluminum's main 2008 contract rose 1.17%, up 165yuan / ton, to close at 14265 yuan / ton. The dollar index fell 0.33% to 95.98.

Macro aspect: 1) Real-time statistics released by Johns Hopkins University show that as of about 7:15 Beijing time, a total of 3760975 people in the United States have been infected with New Crown pneumonia, and the death toll has reached 140471. (bearish) 2) the International Monetary Fund (IMF) said in a statement concluding consultations on Article IV of the United States on the 17th that the US economy is expected to contract at an annualised rate of 37% in the second quarter and 6.6% for the whole year due to the impact of economic activity hit by the new crown epidemic. 3) the National Development and Reform Commission said that in the next step, it will continue to work with relevant parties to focus on key areas such as major national strategies, "two new and one heavy" and weak areas, precise financing, precise projects, and precise implementation of policies. we will promote the construction of major projects, rationally expand effective investment, and further play the key role of investment. First, make good use of investment funds. The second is to strengthen the guarantee of project elements. The third is to strengthen the reserve of major projects. (Lido) 4) the central bank will carry out a seven-day reverse repurchase operation of 100 billion yuan today, as 50 billion yuan of reverse repurchase expires today, with a net investment of 50 billion yuan on that day. (lidocaine)

Fundamentals: 1) SMM weekly operating rate survey: this week, aluminum downstream leading enterprises started slightly reduced by 0.1% to 77.2%, cable companies started slightly weaker. 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 cables have weakened, and overseas demand has improved due to the failure to translate the Shanghai-Lun ratio into new export orders. Due to the increase in overseas demand, the impact of imported aluminum ingots on the recycled aluminum industry has been reduced, and the start-up has become stable, and the off-season effect in July may be offset by a reduction in import shocks. It is expected that the weekly start of aluminum downstream next week is still likely to continue to weaken slightly, and the decline in construction will still be first reflected in cable and strip enterprises. (neutral) 2) the regional weighted price of SMM alumina was 2495 yuan / ton last Friday, up 50 yuan / ton from last Friday. The total cost of Shanxi in June is 2502 yuan / ton, and the recent price has been able to cover part of the cost of the local alumina reduction plant, and several enterprises have completed or planned to resume production and increase production, which will be partially hedged or may even completely cover the reduced production capacity at the end of June. (lidocaine)

On the morning of the 17th, the spot price in Shanghai was between 14360mur14380 yuan / ton, and the price in Wuxi was slightly higher, between 14370mur14390 yuan / ton. The prices of the two places were about 140 yuan / ton lower than yesterday, and the morning discount was around 280. The rising price was about 30 yuan / ton higher than that of the previous day, and aluminum rose after 10: 40. As the spot market is difficult to be called loose, the price of the consignor is relatively stiff, and the quotation is raised accordingly. The spot in Shanghai area is concentrated around 14400 yuan / ton, Wuxi area is around 14410 yuan / ton, and Hangzhou area is 14400 yuan / ton. A large family announced in the morning that the procurement plan for East China was more than 10,000 tons, and the trading of traders was OK. In the later period, aluminum prices rose rapidly, and the heat of market transactions declined somewhat. On the whole, the transactions between traders and buyers and sellers were more active. This morning, spot transactions were concentrated around 220 yuan / ton of rising water for that month.

Conclusion: at the macro level, the impact of the epidemic abroad is still not optimistic, and the domestic economy recovers steadily. From a fundamental point of view, although the downstream operating rate of electrolytic aluminum has been slightly reduced, but the overall demand is OK. Social inventory is still low, given electrolytic aluminum price support, aluminum prices have rebounded in the past two days, tend to be fundamental rationality again, spot prices drive futures price logic unchanged. It is expected that the price trend of electrolytic aluminum is still on the strong side in the short term.