[summary of SMM Aluminium Internal Morning meeting] Aluminium Plant starts production at a faster pace and Alumina prices remain relatively stable in the short term

10.31 minutes of SMM Internal Aluminium Morning meeting

Trading: the US index fell 203 points to 97.473 yesterday, Lun aluminum closed flat at $1751 / ton yesterday, the bulls increased their positions by more than 25, 000 hands on Tuesday, and yesterday's high refreshed the highest level in more than a month. The main Shanghai aluminum rose 60 yuan / ton to 13845 yuan / ton, an increase of 0.44%. Macro: 1) the Fed cut interest rates for the third time this year yesterday, cutting the benchmark fund rate by 25 basis points to a range of 1.5 per cent to 1.75 per cent. At the same time, talk of future easing points to a higher threshold. 2) yesterday, the United States announced the number of ADP employment in October (10,000), the previous value: 9.3, the forecast value: 11, the published value: 12.5. The initial value of the actual GDP annualized quarterly rate in the United States in the third quarter (%), the previous value: 2, the forecast value: 1.6, the published value: 1.9. 3) Economic sentiment index for the euro area in October, front value: 101.7, forecast value: 101.1, public value: 100.8. 3) in October 2019, China's manufacturing purchasing managers' index ((PMI)) was 49.3 per cent, down 0.5 percentage points from the previous month. The index of new orders was 49.6%, down 0.9 percentage points from the previous month to below the tipping point, indicating a decline in demand in the manufacturing market. Fundamentals: 1) supply side: it is reported that Sichuan Guangyuan Zhongfu will invest 250000 tons next month, and Yunnan Shenhuo 150000 tons is expected to be put into production next month. 2) cost end: the ore supply in the northern region is tight, which has a certain support for the alumina price in some areas of Jinzhong, but in view of the recent opening of the domestic import alumina window, the overall price level of alumina market remains relatively stable. 3) demand side: orders for aluminum profiles and aluminum strips downstream in October are expected to be flat in September compared with the previous month, and aluminum cables in October are worse than in September, due to the early release of orders from the national network in the third quarter, and the order volume in the later period is lower than that in the previous period. In addition, in the early stage of Henan due to weather warning reasons, local aluminum rod enterprises stopped production for 4-5 days, there is some pressure on delivery this month. Spot end: the spot price in Shanghai Wuxi area is between 13990-14010 yuan / ton, and the price is about 90-100 yuan / ton, the price is nearly 60 yuan / ton compared with the previous day, and the spot price in Hangzhou is 13980-14000 yuan / ton. Prices rebounded yesterday, shippers increased shipments, middlemen received more active, but because the shippers are more high prices, trading with middlemen slightly deadlocked, the two sides in 13990-14000 yuan / ton between the transaction can be done between 14000-14010 yuan / ton more difficult to close. Yesterday, the volume of goods received by a large household was less than 3000 tons, lacking the participation of large households, and the overall transaction of traders yesterday was less than the day before. Downstream manufacturers yesterday on-demand procurement, prices back to hold a wait-and-see attitude, receiving mediocre goods. East China as a whole closed yesterday in general. Summary: aluminum prices maintain a weak range in the short term. Although the increase of electrolytic aluminum supply is expected, the actual discharge of electrolytic aluminum is relatively slow. In the short term, the inventory of electrolytic aluminum remains in the storage state. We should pay attention to the month-on-month change of the overall consumption of aluminum downstream in November, and the impact of heating and production restriction on the supply of electrolytic aluminum and alumina in autumn and winter. Due to the increase in overseas alumina supply and weak demand, internal and external risks have increased, but bullish confidence has recovered recently. The pattern of the inner plate is close to strong and far from weak, and pay attention to the change of monthly price difference in the later period.

(SMM Xueman)