On August 19, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract for October delivery dropped by 1.07% by the end of Wednesday's daytime trading and decreased by 0.23% overnight, closing the nighttime session at Yuan 23,685/tonne as of 1 a.m. Thursday, August 20, 2026.
The hawkish tone of the July FOMC minutes creates a two-tier impact on aluminum prices, that is, financial attributes pressed from above, industrial resilience supported from below. With several officials arguing that failure of inflation to recede would warrant further hikes, and most still expecting gradual disinflation yet acknowledging sticky-high risks, the market reprices the odds of a year-end hike, keeping the dollar and real Treasury yields biased to the strong side. LME aluminum takes the first hit from dollar denomination and capital rotating out of non-yielding metals, with the pressure transmitting to SHFE aluminum but in fading magnitude. Risk-appetite erosion weighs on pro-cyclical metals broadly, yet aluminum, given its tighter supply-demand balance, is less sensitive to pure sentiment shocks than copper.
On August 19, 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 23,670/tonne, down Yuan 230/tonne from the previous day; in South China Yuan 23,790/tonne, down Yuan 240/tonne from the previous day; and in Central Plains Yuan 23,590/tonne, down Yuan 210/tonne from the previous day.
On the fundamental side, operating capacity is already nearing its ceiling with little room for further expansion. High molten-metal-to-ingot ratios have kept ingot output thin, driving a sustained drawdown in domestic traders' inventories, while LME stocks also sit at historically low levels, leaving visible supplies overall quite tight.
On the demand front, traditional property-related consumption remains soft in the off-season, but incremental aluminum usage from new energy vehicles, photovoltaics, and UHV power grids continues to offset this weakness, resulting in a market that is not as weak as the season would suggest.
In the early session yesterday, SHFE aluminum edged lower in choppy trade. Traders' inventories in the Central Plains market held steady at around 160,000 tonnes. As the basis strengthened, traders tightened selling rhythms, leaving spot availability relatively constrained, with offers firming to a premium of Yuan 10/tonne. With absolute prices extending their decline, downstream buyers stepped up purchasing on dips to replenish stocks, while traders entered actively to scoop up cheaper material. Trading sentiment picked up somewhat, and overall turnover was fair.
In South China, the basis against the front-month contract widened to roughly a premium of Yuan 100/tonne. Despite lower absolute prices, arbitrageurs actively offloaded inventories against the elevated basis, keeping spot supply sufficient. Traders sought to buy on discount through price negotiations, while end-users purchased only on essential needs, leaving overall turnover muted.
Overall, SHFE aluminum edged lower as hawkish FOMC minutes bolstered the dollar, triggering financial-led corrections. However, persistent supply tightness, capped output, low inventories, and resilient green demand cushioned the downside, keeping prices underpinned despite the macro headwinds.
