On August 26, 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 0.17% by the end of Wednesday's daytime trading and decreased by 0.17% overnight, closing the nighttime session at Yuan 23,830/tonne as of 1 a.m. Thursday, August 27, 2026.
The Qatari Prime Minister's visit to Tehran on Thursday to attempt mediation for de-escalation, paired with Netanyahu's same-day statement that he "sees no possibility of a diplomatic agreement with Iran", signals that Middle East geopolitical risk will not clear near-term and that both Hormuz navigation and Gulf smelter restarts remain unresolved.
For aluminum prices, on one hand, the retained negotiation window caps any pulse-style oil spike and thus moderates an extreme cost-push move, yet the absence of a diplomatic deal hardens the logic of stalled Middle East capacity, rerouted raw-material shipping, and a higher natural-gas power-generation cost floor. With LME inventories at historically low levels and extremely sensitive to supply disruption, LME aluminum is biased to rise rather than fall and transmits that strength to SHFE aluminum.
On the other hand, China's 45-million-tonne capacity cap and controllable energy posture make its gains weaker than overseas, yielding an "externally firm, internally stable" catch-up rally. But if Doha's mediation unexpectedly delivers a staged breakthrough, the repair in overseas supply expectations would trigger a high-level give-back in aluminum; hence the current macro mix more supports a short-term bullish-but-range-bound aluminum tape.
On August 26, 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 23,870/tonne, up Yuan 130/tonne from the previous day; in South China Yuan 24,130/tonne, up Yuan 230/tonne from the previous day; and in Central Plains Yuan 23,790/tonne, up Yuan 120/tonne from the previous day.
With no prospect of a Middle East diplomatic deal and Hormuz Strait risk lingering, LME aluminum is underpinned by unresolved Gulf smelter restarts and low LME stocks, leaving it biased to rise rather than fall and passing that floor inward to domestic prices. Yesterday's physical market followed suit with spot gains, yet China's aluminum has pressed against the 45 million tonnes capacity cap with zero supply elasticity, while spot stays weak-stable with a slight inventory build and only rigid-need restocking downstream, so the catch-up strength is softer than overseas.
SHFE aluminum edged higher in early trading yesterday before drifting lower in a range-bound session. The spot market in East China showed a weak but stable tone; a modest inventory build-up increased selling pressure, and as month-end approaches, willingness to cash out and collect payments strengthened. Some traders increased their sales volumes, while others still held firm on offers, yet overall available supply gradually turned looser. A small portion of downstream producers chased the rally to restock, and rigid demand remained fairly resilient, but mid-stream traders turned more reluctant to enter the market, only replenishing at a discount on an as-needed basis. Overall trading activity was lukewarm.
In South China, the traders stood firm on offers, but spot transactions at a premium proved difficult; current-month invoice cargoes were mainly done at parity. The basis ran at elevated levels, futures-bonded warehouse inventories kept drawing down, and ex-warehouse self-pickup spot offers stayed relatively firm. Buyers sourced on dips for rigid needs, and overall turnover was mediocre.
Driven by macro tailwinds, aluminum prices rose across the board, and LME aluminum stayed firm on Hormuz risk and low stocks, while the Middle East diplomatic deadlock and China's 45 million tonnes capacity cap kept the tape in a "externally firm, internally stable" bullish-range-bound pattern.
