[summary of internal morning meeting of SMM aluminum] Alumina at the cost end continued to decline, and the ring ratio of aluminum profiles and aluminum wheels decreased in June.

7.31 minutes of SMM internal aluminum morning meeting

Market surface: Tuesday Lun aluminum opened at US $1815 / ton in the morning, raised US $1819.5 / ton at the beginning of the European market, then turned down, and finally closed at US $1803.5 / ton, down US $11 / ton, down 0.61%. Shanghai Aluminium's main 1909 contract opened at 13945 yuan / ton in the morning and closed at 13915 yuan / ton at night, mainly by long positions at night. Macro: (1) the 12th round of Sino-US high-level consultations resumed, and US representatives arrived in Shanghai yesterday; (2) China's official manufacturing PMI in July was announced at 49.7%, up 0.3% from the previous month, and rebounded first since April; (3) as the Fed's interest rate negotiation meeting is under way, US President Trump has stepped up his attack on the Fed, demanding that the Fed "cut interest rates substantially." (4) the Politburo of the CPC Central Committee held a meeting yesterday to make arrangements for economic work in the second half of the year. (5) fears of a "hard Brexit" intensified, with the Brexit minister saying that any agreement on October 31 would leave the European Union, with the pound falling to its lowest level in more than two years.

Fundamentals: cost side, SMM alumina area weighted quotation 2475 yuan / ton, down 30 yuan / ton compared with the previous day. On the demand side, (1) on the overseas side, the production of Rusal joint venture cable plant aims to develop high value-added products. If it can be fully put into production within three years, the production capacity is expected to reach 4400 tons. (2) on the domestic side, the export volume of aluminum profiles and bars in China in June was 88100 tons, 8.6% less than the previous month, an increase of 3.7% over the same period last year, which is at the normal level compared with previous years. In June, the export volume of wheels was 71000 tons, 8.5% less than the previous month, and 13.3% less than the same period last year; the trial production of 30, 000 tons of energy-saving aluminum alloy profiles in Lingwu, Ningxia, began, and the construction of some workshops was completed; the first production line of the alloy project of Chinalco Guizhou Branch was officially put into production, which was successfully poured and put into production two months ahead of schedule.

Spot: on Tuesday morning, the spot price of aluminum ingots in Wuxi and Shanghai was between 13890 and 13910 yuan / ton, about 10 yuan / ton on the flat surface, 30 yuan / ton higher than the previous day, and the price in Hangzhou was between 13910 and 13930 yuan / ton. In the morning, a large receiving price is more recognized by the holder, the holder is active, the middleman is active, and the aluminum price rises rapidly after 11: 00. Although the market holder still has an offer at a high price, it is concentrated in the vicinity of 13920 to 13930 yuan / ton, and the flat surface of the plate is near 10 yuan / ton, but the transaction activity drops rapidly at this time, and the receiver is afraid of high, but there is no deal. Downstream yesterday on-demand procurement-based, there is no obvious receipt of goods, the response is mediocre. The overall deal in East China on Tuesday was fine.

Summary: at present, under the expectation of accelerating the storage market brought about by consumption in the peak season in September, the profits of the electrolytic aluminum industry have been repaired, but not from the sharp rise in absolute prices, mainly from the profit flow of the alumina link to the electrolytic aluminum link. At present, the overall supply pressure of electrolytic aluminum is relatively limited. It is expected that the short-term aluminum will maintain a slightly strong trend of concussion, and the callback can be arranged in the position of 13500 yuan to 13800 yuan / ton. The positive arbitrage position of the contract of 0912 can continue to hold, the internal and external arbitrage position does not recommend the new opening, does not have the strong logic support for the time being.

(SMM Li Hao 021 5166 6863)