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[summary of SMM Morning meeting] small accumulation of inventory in electrolytic aluminum society, the willingness of the holder to raise the price is still strong.
Jul 30,2020 10:09CST
The content below was translated by Tencent automatically for reference.

Minutes of SMM internal aluminum morning meeting on July 30th Disk: Lun Aluminum closed at 1727.5 US dollars / ton yesterday, up 0.12%, up 2 US dollars / ton. Shanghai Aluminum's main 2009 contract rose 195 yuan / ton, or 1.43%, to 14655 yuan / ton. The dollar index fell 0.53 per cent to 93.266.

Macro aspect: 1) according to the real-time statistics of Johns Hopkins University in the United States, as of 3: 00 Beijing time on the 30th, the United States reported more than 150000 deaths of novel coronavirus, reaching 150034 cases, and the cumulative number of confirmed cases reported by novel coronavirus was close to 4.4 million. (bearish) 2) the Fed issued a FOMC statement reiterating that it will use all tools to support the economy and will increase asset size (asset purchases) "at the current rate". The improvement in financial conditions is partly due to the actions of the Federal Reserve. Economic activity and jobs rose, but still below previous levels. Weak demand and low oil prices keep inflation low. 3) the open market of the central bank will conduct a seven-day reverse repurchase operation of 50 billion yuan today, as 50 billion yuan of reverse repurchase expires today, achieving zero release and zero withdrawal on the same day. (neutral) 4) on Thursday, July 30, 2020, the people's Bank of China will launch the seventh central bank bill swap (CBS) operation in 2020. The operation volume of the current period is 5 billion yuan, with a period of 3 months. The fixed rate is 0.10% for primary dealers in open market business. The settlement date of the first phase is July 30, 2020, and the due date is October 30, 2020 (in case of extended holidays). (lidocaine)

Fundamentals: 1) Rusal (Rusal) said that it is expected that the global supply of "green aluminum" will exceed 10 million tons / year next year, and its "green aluminum" sales will reach 3.5 million tons / year by 2025. The 3.5 million-ton volume means the company can sell it as a separate asset class, which could then be the cheapest green aluminum product on the market. 2) benefiting from the continued rise in product prices, the aluminum smelting industry (including alumina, electrolytic aluminum and recycled aluminum) made a profit in May, with a total profit of 750 million yuan and a sales profit margin of 1.4%. It is 0.8 percentage points higher than the cumulative sales profit margin of 0.6% in the previous five months, and the benefit is expected to further improve in June. From the perspective of sub-industries, the electrolytic aluminum industry has made a comprehensive profit, and the profit level is quite considerable, the average selling price of the product exceeds the full cost by more than 2000 yuan, and the price increase of alumina is less than that of electrolytic aluminum. the profit level of alumina enterprises in the north and south is different due to ore costs and other factors, the overall profit level of the industry is still low (neutral) 3) Alumina: in the spot market, the intraday trading is light, the willingness of big manufacturers to ship goods is not strong, and the buyer's wait-and-see mentality still exists. In the afternoon, I heard that the latest overseas transaction of 30, 000 tons came from Western Australia, FOB275 US dollars / ton, shipping date in mid-August, earlier SMM alumina Australia FOB quotation fell 6 US dollars / ton, followed by domestic decline. (neutral) 4) on July 30th, imports flowed in, and the contribution of inventory in Shanghai and Guangdong increased. According to SMM statistics, the weekly inventory of electrolytic aluminum in China was less than 10, 000 tons to 712000 tons. (bullish)

Spot aspect: the transaction of the holder is concentrated on the vicinity of 50 yuan / ton in the same month. Conclusion: from a macro point of view, the overseas economy is still in the stage of recovery and the risk of epidemic situation still exists, which does not rule out the possibility that the United States will step up epidemic prevention and restrict its economy in the future. From a fundamental point of view, the current social inventory warehouse receipt is still low, and the willingness of the holder to raise the price is still strong yesterday, and it is expected that the trend of aluminum price is still strong in the short term.

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