[minutes of internal morning meeting of SMM aluminum] the speed of removal of electrolytic aluminum from storage slows down & the cost side continues to decline

7.2 SMM internal aluminum morning meeting minutes: yesterday, London Aluminum climbed to the highest level of US $1811 / ton in the Asian market yesterday, and finally closed at US $1791.5 / ton, down US $2.50 / ton, down 0.14%, mainly due to short positions; the main 1908 contract in Shanghai closed at 13665 yuan / ton overnight, the lowest position since mid-March this year. Macro: China's Caixin manufacturing PMI public value in June 49.4, the previous value of 50.2, the expected value of 50.1; the United States in June Markit manufacturing industry PMI hit a 16-year low since October, the announced value of 50.6, the previous value of 50.1, the expected value of 50.1; Germany in June Markit manufacturing PMI public value of 45.5, the previous value of 45, the expected value of 45; the central bank yesterday disclosed that it carried out medium-term lending facilities to financial institutions in June, a total of 740 billion yuan.

Fundamentals: cost side, yesterday Weiqiao announced its July preparatory anode basic purchase price of 3045 yuan / ton, month-on-month reduction of 50 yuan / ton, alumina prices continue to fall, SMM alumina five weighted average quotation has been as low as 2786 yuan / ton. On the supply side, Yingkou Zhongwang reduced production capacity by 210000 tons of electrolytic aluminum, starting on June 22, involving 160 500KA electrolytic cells, which is expected to be completed next week, and does not rule out the possibility of further production reduction. On the demand side, the aluminum rod production line in Jiaozuo area of Henan Province can resume normal production yesterday, while the aluminum rod production line is limited to production at night, but due to environmental protection has not been relaxed, Jiaozuo aluminum rod production capacity is expected to restore up to 2 production lines. Inventory, yesterday SMM statistics domestic electrolytic aluminum social inventory of 1.041 million tons, down 10000 tons from last Thursday, the decline is mainly reflected in Shanghai, Wuxi, South China Sea, Gongyi, Linyi and other northern regions inventory has increased. Spot: on Monday, the spot price in Shanghai is between 13730 and 13750 yuan / ton, between 10 yuan and 10 yuan / ton on the current month, which is about 50 yuan / ton lower than last Friday's price. Wuxi spot transaction price is between 13740 and 13760 yuan / ton, and Hangzhou spot price is between 13770 and 13790 yuan / ton. Yesterday, the holder shipped actively, because the price fell, the middleman has a certain replenishment under the low price, the overall transaction is better. However, downstream Monday did not show an obvious willingness to receive goods, basic on-demand procurement, traders are feedback downstream consumption signs of weakness, on the near future downstream consumption expectations are pessimistic. The deal was normal on Monday.

Conclusion: the speed of domestic electrolytic aluminum storage slows down, and the market is worried that the off-season consumption from July to August may be exhausted, so we can try to wait for more than one layout around 13500 yuan / ton. Continue to hold positive internal and external positions.

(SMM Li Hao 021 5166 6863)