On August 5, 2026, Mysteel's daily price assessment showed that the market price for A00 aluminum with a minimum purity of 99.7% in China was 23680 Yuan/tonne, down 40 Yuan/tonne from the previous day; in South China 23800 Yuan/tonne, down 30 Yuan/tonne from the previous day; and in Central Plains 23540 Yuan/tonne, down 10 Yuan/tonne from the previous day.
On the macro front, although this year's voting FOMC members and Governor Cook signaled a hawkish stance that rates should be raised if inflation fails to cool, the July ADP employment gain of just 44,000, a year-to-date low, prompted markets to scale back bets on a September rate hike, sending the US dollar index lower alongside declining US real yields.
As a US-dollar-denominated industrial metal subject to a rigid domestic capacity cap on aluminum, aluminum saw a meaningful valuation recovery driven by the combination of unwinding rate-hike expectations, a softer dollar, reduced inventory financing costs, and renewed risk appetite among funds. The rally was led by LME aluminum and echoed across SHFE aluminum.
Adding to the upward momentum, the market positioned ahead of Friday's nonfarm payrolls release on expectations of continued labor-market softness and limited scope for further Fed tightening, resulting in a pronounced macro-driven surge in aluminum prices this week. Seasonal inventory builds on the fundamental side were largely overshadowed by prevailing macro sentiment.
In the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract for September delivery edged up by 0.25% by the end of Wednesday's daytime trading and increased by 0.29% overnight, closing the nighttime session at Yuan 23,835/t as of 1 a.m. Thursday, August 6, 2026.
On August 5, 2026, Mysteel reported that A00 aluminum ingot trading in the South China market was predominantly quoted at parity, with sporadic offers at a discount of Yuan 10/tonne. Spot transactions in the early-to-mid session mostly settled at a Yuan 10/tonne discount, before recovering to parity later in the day. The basis for South China A00 aluminum remained firm at a premium of Yuan 80/tonne over the SHFE front-month contract, sustaining the "strong south, weak north" pricing pattern.
With the delivery deadline for current pricing long-term contracts approaching, traders actively sourced material on dips, improving liquidity in intermediary trade, while downstream factories maintained essential procurement needs. Overall trading sentiment was fair.
In the Central China market on August 5, 2026, traders' inventories trended lower, hovering around 190,000 tonnes. Supported by a strengthening basis, holders slowed their sales pace to prop up prices, tightening spot availability. Quotations were heard at premiums of Yuan 10-20/tonne. Despite a slight uptick in aluminum prices, downstream buyers remained focused on essential demand, showing increased interest in purchasing on dips. Traders entered the market to absorb cheaper cargo, resulting in an overall acceptable transaction volume.
