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 0.19% by the end of Thursday's daytime trading and increased by 0.38% overnight, closing the nighttime session at Yuan 23,925/t as of 1 a.m. Friday, August 7, 2026.
Driven by macro factors, aluminium prices rallied sharply this week. The Fed has kept rates unchanged for the fifth consecutive meeting this year, and market expectations for a September rate hike continue to cool, lifting risk appetite across the non-ferrous complex. Combined with LME inventories sitting near historic lows and a geopolitical risk premium from the US-Iran conflict, aluminium remains on an upward track.
However, the US initial jobless claims for the week ending August 1 came in at 199,000, below market consensus, signaling that labour-market resilience persists. Fed's Musalem stated a preference for a rate hike at the recent FOMC meeting, showing sticky inflation makes Fed policy prone to stay tight rather than ease, and elevated dollar and US Treasury yields cap the valuation of bulk commodities.
On August 6, 2026, Mysteel's daily price assessment showed that the market price for A00 aluminum with a minimum purity of 99.7% in China was Yuan 23,800/tonne, up Yuan 120/tonne from the previous day; in South China Yuan 23,910/tonne, up Yuan 110/tonne from the previous day; and in Central Plains Yuan 23,670/tonne, up Yuan 130/tonne from the previous day.
On the fundamental side, downstream procurement has softened versus earlier levels, traders have stayed cautious and watchful, and high-temperature off-season conditions have pushed some downstream plants into maintenance shutdowns. The destocking pace of traders' inventories keeps slowing, and overall physical trading has been flat.
Throughout the session, the sellers primarily offered cargoes flat against the futures price. In the early to mid-session, limited volumes were offered at a discount of Yuan 10/tonne, while later, some suppliers attempted to sell at a premium. Transactions were largely concluded at flat prices, with a few deals struck at slight discounts and small premiums.
Traders' inventories of aluminium ingots in South China continued to draw down, falling to around 180,000 tonnes. Coupled with the approaching delivery window for long-term contracts, spot offers remained relatively firm. Traders actively sourced cargoes to fulfill contractual obligations, driving a sustained recovery in spot trading sentiment. Downstream consumers maintained rigid demand purchases, resulting in an overall decent turnover.
Traders' inventories in the Central Plains market held steady at approximately 190,000 tonnes. As the basis strengthened continuously, the traders maintained their sales rhythm but held offers firm to slow down sales. Available supply tightened relatively, with offers quoted at a premium of Yuan 10-20/tonne. With aluminium prices remaining elevated, downstream enterprises focused on rigid demand, though their willingness to buy on dips improved notably. Traders stepped in to absorb lower-priced cargoes, leaving overall market transactions fair.
In summary, aluminium prices are currently macro-sentiment driven, with room for medium-to-long-term upside still intact. Going forward, the market should focus on developments in the Middle East situation and the domestic destocking rhythm.
