[summary of SMM Aluminium Internal Morning meeting] the decline of electrolytic aluminum inventory is obvious, and the spot market is more active.

10. 17 minutes of the internal aluminum morning meeting of the SMM

Disk: overnight Shanghai aluminum company 1912 contract opened at 13825 yuan / ton, night to horizontal adjustment, compared with the day up 15 yuan / ton, up 0.11%, mainly to long positions; overnight aluminum opened at $1726.5 / ton, the performance of the day first suppressed and then rose, closing at $1727.5 / ton.

Macro: (1) the Ministry of Ecological Environment, the Development and Reform Commission and other ten departments, together with the people's governments of Beijing, Tianjin and Tianjin, have jointly issued the "Action Plan for Comprehensive Control of Air pollution in Autumn and Winter 2019-2020 in Beijing, Tianjin, Hebei and its surrounding areas"; (2) the monthly rate of retail sales in the United States unexpectedly cooled in September, falling by 0.3% month-on-month for the first time in seven months. The decline in the monthly rate of retail sales in the United States in September was mainly due to a decline in household spending on cars, construction materials, hobbies and online shopping, the Commerce Department said.

Fundamentals: (1) overseas, Alcoa plans to sell non-core assets over the next 12 to 18 months, which is expected to generate net income of $500m to $1 billion, and global full-year aluminium demand is expected to fall 0.4 per cent to 0.6 per cent. Previously expected growth of 1.25%-2.25%; Rio Tinto lowered its forecasts for aluminium, alumina and bauxite production in 2019, with aluminium production falling 3 per cent from a year earlier to 789000 tonnes in July-September and 2 per cent from the April-June quarter. (2) in China, the Yunnan Provincial Government and Shandong Weiqiao Entrepreneurship Group signed an agreement on the joint construction of a green aluminum innovation industrial park, and the two sides complement each other. Weiqiao Entrepreneurship Group led the construction of the park, introduced the hydropower and aluminum integration project, and carried out the layout of the whole industrial chain. Yunnan green energy and location, open advantages, the construction of a green aluminum industry base with global influence; Henan Mingtai Aluminum in the first three quarters of the net profit pre-increased by about 78%; Shenhuo shares in the first three quarters of net profit pre-increased by 654% to 894%. SMM domestic electrolytic aluminum social inventory will be updated today, is expected to continue to go to the warehouse.

Spot: yesterday, the spot transaction prices of the two places in Shanghai Wuxi market were mostly concentrated in 13880-13900 yuan / ton, near 3040 yuan / ton, the price rose nearly 100 yuan from the previous day, and the price in Hangzhou was 13900-13910 yuan / ton. Due to the sharp rise in aluminum prices, part of the downstream on-demand goods, but there are also feedback from traders that a small number of manufacturers have been buying goods because of the price wait-and-see in the early stage, and now little inventory consumption has to start receiving goods. East China as a whole has a good deal. Today, the spot transaction in East China rose 50-60 yuan / ton that month, and the middleman received the goods actively.

Summary: the contradiction between long and short in the short-term market still exists, although the supply increase is expected, but the actual growth rate is slow. With the recovery after the consumption holiday, the spot social inventory continues to go to the warehouse. At the present stage, the consumption can still continue to make the industry still need to give electrolytic aluminum a certain profit space, the short-term should not be overly bearish, we should pay attention to the sustainability of consumption. Due to the increase in overseas alumina supply and weak demand, the internal and external positive sleeve will drag down the increased risk and can appropriately reduce the position. The monthly difference between SHFE contracts maintains a pattern of near strength and far weakness, which can be properly intervened.

(SMM Li Hao)