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[SMM Metal Breakfast] Metal dropped across the board * centralized overhaul of private copper refineries * small burden of electrolytic aluminum inventory
Jul 31,2020 06:58CST
translation
Source:SMM
[SMM Metal Breakfast] Metal fell across the board * centralized overhaul of private copper refineries * Electrolytic aluminum inventory is small * the operating rate of blast furnace is expected to rise slightly on price suppression * accumulation continues, steel price "awkward" situation continues * Iron mining enterprises output summary of iron ore trend in the second half of the first half of the year * Alcan Group said exports to the United States fell by 28%.
The content below was translated by Tencent automatically for reference.

GDP in the United States hit a multi-year low in the second quarter, and the outer disk metal collectively fell 1%.

[macro outlook] China releases official manufacturing PMI in July

Today's focus

[meeting of the political Bureau of the CPC Central Committee: to do a good job in economic work in the second half of the year, we must adhere to the general tone of the work of seeking progress in the midst of stability] adhere to the new concept of development, better coordinate the work of epidemic prevention and control and economic and social development, adhere to the supply-side structural reform as the main line, persist in deepening reform and opening up, firmly grasp the strategic basic point of expanding domestic demand, vigorously protect and stimulate the vitality of the main body of the market, and do a good job in the work of "six stability." We will fully implement the task of "six guarantees".

[U.S. GDP fell 32.9% in the second quarter from the initial annualized rate, the biggest drop since the 1940s.] meanwhile, US President Donald Trump tweeted on July 30 to postpone the 2020 US election. Trump said that despite the lack of evidence, there may still be fraud in mailing ballots.

[SMM summary: summary of the second quarterly reports of large overseas copper mining enterprises (continuously updated)] according to the first quarterly reports released by major overseas mining enterprises, global copper production in the first quarter was not significantly affected by the epidemic, with only a slight decline, but most mining companies have lowered their production guidelines for 2020. Up to now, most overseas mining companies have issued semi-annual reports, and the impact of overseas epidemic on the output of mining enterprises is mainly reflected in the second quarter, so the output in the second quarter has attracted much attention from the market. As of today, according to SMM statistics, the output of most copper enterprises declined to varying degrees in the second quarter compared with the same period last year. "check the details.

[SMM analysis: private copper refineries will focus on overhauling due to shortage of raw materials and declining profits] according to SMM data, the copper concentrate index in June was $51.71 / ton, down $1.76 / ton from the previous month, the third consecutive month of decline. After entering July, TC continues to decline. On July 24th, the SMM copper concentrate index (week) reached US $49.8 / ton. at present, the spot TC trading center has broken through the US $50 / ton mark. According to SMM, at present, some domestic copper smelters have been affected by the shortage of raw materials and declining profits to reduce production or carry out maintenance and adjustment, mainly private refineries, especially some private roughing plants have centralized maintenance phenomenon in July and August this year. "check the details."

[SMM data: contribution increase of electrolytic aluminum inventory in Shanghai and Guangdong area: weekly tired 10, 000 tons to 712000 tons] July 30, import sources inflow, inventory contribution increase in Shanghai and Guangdong areas, SMM statistics domestic electrolytic aluminum social inventory weekly small tired 10, 000 tons to 712000 tons. "check the details.

[SMM data: the inventory of aluminum bars decreased significantly by 2700 tons to 65900 tons compared with last Thursday.] the inventory of aluminum bars decreased significantly by 2700 tons to 65900 tons compared with last Thursday. Inventory in Foshan, Changzhou, Huzhou and Nanchang all declined to varying degrees, with the largest decline in Guangdong, only Wuxi inventory increased.

[SMM analysis: there is no lack of bright spots in the new energy vehicle market in the first half of the year.] due to the global spread of the novel coronavirus epidemic in the first half of 2020, the already "depressed" automobile industry has been hit hard again, and the sales of new energy vehicles are no exception. According to data from the China Automobile Association, the production and sales of new energy vehicles completed 397000 and 393000 respectively from January to June, down 36.5% and 37.4% respectively from the same period last year. In terms of car brands, sales of four models in the top 10 brands fell compared with the same period last year. For example, BAIC EU series sales in the first half of 2020 were 11383, down 76.8% from the same period last year; Chery eQ was down 56.1% from the same period last year. "check the details.

SMM Hot Volume inventory: hot Volume Storage "slow" spot price when to "put aside the clouds and see the light of day"? This week, the total inventory of hot-rolled coil is 3.8831 million tons, with a month-on-month ratio of + 0.72% and + 12% compared with the same period last year. The overall growth rate has slowed down from the previous month, and the year-on-year growth rate has also declined. The current inventory pressure is OK, and the short-term disturbance to fundamentals is relatively limited. "View details

[SMM analysis: blast furnace operating rate rebounded slightly, price suppression is expected to be limited] according to SMM research, the blast furnace operating rate in the last week of July was 90.3%, up 0.23% from last week, mainly due to the completion of overhaul of some steel mills affected by floods this week, and it is expected that the blast furnace operating rate will be high and stable next week. The Federal Reserve announced its interest rate resolution in the early hours of Thursday (July 30), leaving the interest rate of 0% Mo 0.25% unchanged. This week, Fed officials will also discuss how to provide more stimulus to the economy. It is expected that in the case of a warm macro atmosphere, the supply-side disturbance on prices is limited, and short-term steel prices are still expected to be strong. "check the details.

[thread inventory report: accumulated inventory continues, steel price "embarrassment" situation does not stop] as of July 30, the national total inventory of building materials was 11.1429 million tons, with a month-on-month ratio of + 1.9% and a year-on-year ratio of + 26.9%. The steady accumulation rate has been continued this week. The steady increase in production meets the demand that has not yet been fully released, and the continuous accumulation still seems to be expected. "check the details."

[Shagang Forecast: it is expected that the flat price difference of rebar in Shagang in the first ten days of August is 80-130 yuan / ton] in the later period, the shock has not stopped, and the spot price is still in an awkward situation of suppressing and supporting. On the one hand, the supply side is steadily increasing. According to SMM research, as of July 28, the operating rate of electric arc furnaces in East China increased by 4% month-on-month compared with last week. At the same time, inventories are high, and the social coffers of mainstream cities in eastern China are much higher than last year. Building materials center-Hangzhou inventory is more than 1 million tons for a long time. Not to mention that a large number of spot lock resources have become hidden dangers that can not be ignored in the process of price rise, which play a continuous role in suppressing spot prices. "check the details."

[SMM topic: global large iron ore companies' output in the first half of the year summary iron ore trend in the second half of the year] recently, a number of iron ore miners released performance reports, according to SMM statistics, the major mining enterprises were less affected by the epidemic in the second quarter. Among the big four miners, Rio Tinto and BHP Billiton completed about 50 per cent of their production in the first half of 2020, while FMG production reached about 48 per cent in the first half of the year. But Brazilian Vale's production completion in the first half of 2020 accounted for only 42 per cent of the year's lowest target guidance. SMM believes that the probability of iron ore entering August is still high, and there is even a chance to hit a new high if there is an abnormal supply in Brazil. Although it has reached the traditional off-season, the demand suppressed by Rain Water in the early stage continues to be released, the demand is good, and the overall hot metal output is stable. And the recent structural shortage is strong for spot support. "check the details.

[list of Vale's profit increase in the second quarter and resumption of operations in mining areas] Vale's results show that the company's formally adjusted EBITDA (profit before interest, tax, depreciation and amortisation) in the second quarter was 3.586 billion US dollars, an increase of 545 million US dollars over the first quarter. The calculation of the EBITDA does not take into account 130 million US dollars in expenses related to Brumadiu and 85 million US dollars in donation expenses to fight the epidemic of COVID-19. If these two factors are taken into account, the adjusted EBITDA for the second quarter of 2020 is $3.371 billion.

Important news of metals and industry

[Alcan Group reported a 28% drop in exports to the United States due to a tariff dispute.] exports of commodity-grade aluminum ingots to the United States fell 28% in July, to 112000 tons from 155000 tons in June, the Alcan Association said. Alcan says Canadian aluminum production and exports are beginning to rebalance. From July 15th, Canada asked the United States to be patient and warned of retaliation in the tariff dispute. The Canadian Association says producers are starting to shift from raw material manufacturing to more value-added products. If the United States adopts measures such as tariffs, the government will only raise the prices of North American manufacturers and consumers who buy their products. At the same time, make room for metals in other countries, such as Russia and China.

[Chinalco International: expected to suffer a loss in the first half of the year affected by the epidemic] Aluminium International announced that the company is expected to lose money in the first half of 2020, and the net profit attributed to shareholders of listed companies is expected to be between-138 million yuan and-160 million yuan. It is estimated that the net profit attributable to shareholders of listed companies after deducting non-recurring profits and losses in the first half of 2020 is between-195 million yuan and-215 million yuan. In the same period last year, the net profit belonging to the shareholders of the listed company was 10.0612 million yuan, and the net profit belonging to the shareholders of the listed company after deducting non-recurring gains and losses was 852200 yuan.

[Norilsk: nickel production rose 8 per cent to 56000 tonnes in the second quarter] Nornickel, the world's largest producer of palladium and premium nickel and a major producer of platinum and copper, announced preliminary combined production results for the second quarter and first half of 2020. Overall nickel production rose 8 per cent in the second quarter of 2020 from a month earlier to 56 kt, almost entirely from the company's own Russian raw materials (55 kt, + 8 per cent). The growth is due to the gradual increase in the number of nickel refineries using the new chlorine leaching technology in Kola MMC. , Kola MMC's carbonyl ji nickel production increased to 1.6 kt (up 3%) as part of the diversification of the advanced product sales strategy.

[mining quarterly report: Merafe resources reduced production by 42% in the first half of the year affected by the epidemic electricity] recently, Merafe Resources released its second-quarter results, Glencore Merafe Chrome Venture's ferrochromium production in the first half of the year 120kt (120000 tons), down 42% from the same period last year. The decrease is due in part to reduced production, market conditions and electricity cuts as a result of COVID 19.

[mine Quarterly report: first Quantum Ravensthorpe production increases second quarter Nickel production reaches 1979 tons] recently, first Quantum released its second quarter results, among which nickel production reached 1979 tons in the second quarter as Ravensthorpe continued to increase production. The first shipments of nickel took place in May, with consecutive shipments in June and are expected to be shipped monthly for the rest of the year. Ravensthorpe is expected to continue to grow in the third quarter. The scope of Ravensthorpe's nickel production guidance for 2020 has been narrowed down to 15000-17000 tons. "View details."

[China's iron ore imports from India reach an eight-year high] Chinese iron ore purchases in India surged to an eight-year high in the first half of 2020, driven mainly by supply shocks from Australian and Brazilian producers and record steel production by the world's largest steelmaker. India's shipments of raw materials more than doubled from a year earlier to 20 million tons in the six months to the end of June, according to Chinese customs data. This is also the highest level since South Asian countries exported 27.8 million tons in the first half of 2012. China relies heavily on imported iron ore to meet more than 2/3 of its demand, while strong demand from steel mills has boosted purchases. The country has long sought to diversify its iron ore sources to control supply risks and price fluctuations, with nearly 65 per cent of iron ore coming from Australia and 17 per cent from Brazil.

[CSN:, a Brazilian steel company, produced 7.5 million tons of iron ore in the second quarter compared with the previous quarter.] Brazilian mining company CSN said recently that it produced 7.5 million tons of iron ore in the second quarter, up 25% from the previous quarter and down 26% from a year earlier. Iron ore sales in the second quarter were 7.74 million tons, up 38% from a month earlier, while still down 24% from a year earlier. CSN said that the month-on-month rebound in production and sales in the second quarter was mainly due to good weather conditions and improved mining equipment. The company said it kept its original target for iron ore sales in 2020 unchanged.

Dalian Commodity Exchange announced that in accordance with the measures for the Administration of Market makers of Dalian Commodity Exchange and other relevant regulations, Dalian Commodity Exchange has identified iron ore futures, liquefied oil options, linear low density polyethylene options and PVC options to add market makers to check the details.

[mining quarterly report: FMG iron ore processing volume reached 42.7 million tons in the second quarter, down 12% from the same period last year.] Australian miner FMG released a quarterly report showing that iron ore processing volume reached 42.7 million tons in the second quarter, an increase of 1% from the previous quarter and a decrease of 12% from the same period last year. FMG2020's total shipments for the fiscal year reached 178 million tons, up 6% from a year earlier, higher than the company's previous fiscal year upper limit (1.75-177 million tons), mainly due to record shipments in the fourth quarter of the fiscal year. The company said the rebound in demand from China, the largest importer of iron ore, provided support for iron ore prices, although the epidemic situation in other countries and regions of the world is still not optimistic. "check the details."

[lithium carbonate production of Australian lithium miner Orocobre's Olaroz project fell 27% in the second quarter compared with the same period last year] Australian lithium miner Orocobre said that due to the novel coronavirus epidemic leading to plant closure, lower operating rate and production to meet the expansion of sales demand, Olaroz project second-quarter lithium carbonate production was 2511 tons, down 27% from the same period last year. In terms of sales volume, 1601 tons of lithium carbonate were sold during the reporting period, down 53 per cent from the same period last year and 36 per cent from the previous month.

[Fortuna Silver restarts the operation of the Caylloma lead-zinc gold and silver mine in Peru] at present, Fortuna Silver has resumed production activities at the Caylloma mine in Peru. The company closed the mine on July 6 after the sudden death of the on-site contractor. The cause of death has not yet been determined. In order to prevent the spread of the novel coronavirus epidemic, the mine has also been disinfected. Caylloma is a gold, lead, silver and zinc mine with a production rate of 1430 tons per day. Zinc production at Caylloma mines in 2019 was 20700 tonnes, unchanged from 2018, while lead production was 13000 tonnes, up 2 per cent from a year earlier.

Macro focus

[meeting of the political Bureau of the CPC Central Committee: the current economic situation is still complex and grim, with great instability and uncertainty] many of the problems we encounter are medium-and long-term, and we must understand them from the perspective of a protracted war. we will speed up the formation of a new development pattern with domestic and international cycles promoting each other, establish a long-term coordination mechanism in epidemic prevention and control and economic and social development, and adhere to the strategic direction of structural adjustment. We will rely more on scientific and technological innovation, improve the cross-cycle design and regulation of macro-control, and achieve a long-term balance between stable growth and risk prevention.

[Indian Ministry of the Interior: all night curfews will be lifted from August 1, and gyms will be opened on August 5.] Subways, cinemas, swimming pools, bars and other places will be closed temporarily. All schools will remain closed until August 31. Until August 31, the COVID-19-controlled area will continue to strictly enforce the blockade.

[Brazilian President's wife Michelle Bosonaro novel coronavirus tested positive] the Brazilian presidential palace issued a statement on July 30, local time, saying that President Bosonaro's wife Michelle Bosonaro novel coronavirus tested positive. The presidential palace said that at present, Michelle has no symptoms of infection, is in good health, and will be quarantined and treated at the presidential residence in accordance with the recommendations of the presidential medical team.

[the EU's second update and opening up of the external boundary country list is still open with conditions attached to China] on the 30th local time, the European Union updated and opened the external boundary country list for the second time, suggesting that member states should open their external boundaries to 11 countries from July 31. According to an announcement issued by the European Council on the same day, the 11 countries are Australia, Canada, Georgia, Japan, Morocco, New Zealand, Rwanda, South Korea, Thailand, Tunisia and Uruguay. The condition attached by the EU to China is still "reciprocity", that is, EU member states open their borders to China only if China opens its borders to the EU.

Terminal information

[SMMT: UK total car production in the first half fell to its lowest level since 1954] according to figures released by SMMT (British Automobile Industry Association), total car production in the UK in the first half of the year was 381357, falling to the lowest level since 1954, down 42 per cent from the same period a year earlier. In SMMT's analysis, massive layoffs in the first half of 2020 and the COVID-19 epidemic were the direct causes of the decline in British car production. According to SMMT, the British auto industry cut at least 11349 jobs in the first half of 2020, involving manufacturing, supply chain and retail. In addition, the increase in Brexit tariffs has also dealt a blow to the British auto industry.

[Anhui New Energy vehicle Power Battery Recycling Industry Alliance was formally established] on the morning of July 29, 2020, the founding meeting of Anhui New Energy vehicle Power Battery Recycling Industry Alliance was held in Hefei. The Congress examined and adopted the articles of Association of Anhui New Energy vehicle Power Battery Recycling Industry Alliance, and elected Hefei Guoxuan Hi-Tech Power Energy Co., Ltd. as its director.

[the decision and interpretation of the Ministry of Industry and Information Technology on revising the regulations on the Management of New Energy vehicle production Enterprises and products access] the main contents of the revision are as follows: first, to delete the requirements of "design and development capability" related to applying for the access of new energy vehicle production enterprises. The second is to adjust the time for new energy vehicle manufacturers to stop production from 12 months to 24 months. The third is to delete the interim provisions on the transition period for new energy vehicle production enterprises to apply for access.

[BMW increases battery recovery to 96 per cent] BMW Group will work with German recycling company Duesenfeld to recycle 96 per cent of electric vehicle batteries in the future. Recently, BMW announced a sustainable development strategy by 2030, saying that one of the key factors to achieve a circular economy is the recycling of high-voltage batteries for electric vehicles. BMW and Duesenfeld plan to "develop a recycling method with a battery recovery rate of up to 96 per cent, including graphite and electrolytes". 96% is a huge improvement, almost equivalent to the recovery rate of lead-acid batteries (99%). At present, the European Union requires at least 50% of high-voltage batteries to be recycled, and the industry average may not be much higher than that standard.

[electric heavy trucks take the lead in the Ningde era and other head battery enterprises] the field of construction machinery and heavy truck vehicles, once regarded as the hydrogen fuel cell stage, has been pre-empted by power batteries in the past two years, and the road to electrification of heavy trucks has been opened. In June, the board of directors of the California Air Resources Board voted at an online meeting to approve the world's first rule requiring truckers to switch from diesel trucks and trucks to electric zero-emission trucks, including fuel cell vehicles. Coincidentally, at the two sessions held in May this year, Zeng Yuqun, chairman of Ningde Times, submitted two proposals related to the development of the new energy industry. One of them is: "make every effort to promote the proposal of electrifying vehicles in public service areas such as construction machinery and heavy trucks to win the blue sky defense war to form a global industrial highland."

[Volkswagen CEO: Tesla may become the world's largest company by market capitalization] Tesla still made a profit in the second quarter of the epidemic, which even won praise from competitors. Herbert Deiss (Herbert Diess), chief executive of Volkswagen, believes that Tesla is likely to become the company with the highest market capitalization in the world. In the second quarter, Tesla once again broke analysts' expectations and made a profit against the trend, compared with almost all other car companies that suffered heavy losses as a result of the collapse in sales.

Related market

[Platts Energy: OPEC + supply gap is expected to be 6.4 million b / d in the fourth quarter] Global crude oil inventories will fall to 104 million b / d by the end of the year, below OPEC + anchored five-year average.

[oil prices fell the most in more than a month because of weak economic data] data showed that the US economy recorded the biggest contraction in history, indicating that demand is far from returning to normal levels. Oil prices fell the most in more than a month after the release of US economic data. John Kilduff, a partner at Again Capital, an energy hedge fund, said a series of worrying data today that the decline in GDP in Germany and the United States does not bode well for gasoline demand.

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