On September 1, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract for October delivery rose by 0.63% by the end of Tuesday's daytime trading and increased by 0.02% overnight, closing the nighttime session at Yuan 24,075/tonne as of 1 a.m. Wednesday, September 2, 2026.
Geopolitically, the Strait of Hormuz "rerouting" combined with the US stepping up Iran sanctions means Middle East aluminum raw-material imports and finished-product exports will have to use higher-cost shipping routes, with freight, energy and supply-disruption risks hardening into cost support for aluminum prices, so the near-term supply premium is skewed to the upside; but Fed Governor Barr's hawkish "hike decisively if inflation doesn't cool" stance pushes up the dollar and real rates, weighing on the financial valuation of commodities and capping aluminum's upside. Near term the geopolitical bullishness outweighs the macro headwind, and aluminum is more likely to rise than fall, with volatility amplified.
On September 1, 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 24,110/tonne, up Yuan 140/tonne from the previous day; in South China Yuan 24,290/tonne, up Yuan 120/tonne from the previous day; and in Central Plains Yuan 23,990/tonne, up Yuan 140/tonne from the previous day.
On the supply side, domestic electrolytic aluminum operating capacity has approached the 45 million-tonne cap, leaving very limited room for further expansion. Overseas, hampered by elevated energy costs and geopolitical disruptions, restarts have been slow, underscoring the rigidity of global supply.
On the demand side, downstream operating rates have risen steadily during the traditional peak season, while consumption in emerging sectors such as new energy, photovoltaics, and power grid investment continues to grow, reflecting resilient overall demand. In terms of inventories, exchange and social stocks at home and abroad both sit at historically low levels, providing firm price support.
On the cost side, power and pre-baked anode costs are supportive, with industry average costs edging higher, further reinforcing the floor under aluminum prices. Overall, the aluminum market is characterized by low inventories, high costs and constrained supply, pointing to a fundamentally strong backdrop.
Yesterday's morning session saw SHFE aluminum oscillating upward. Traders' inventories in the Central Plains market edged lower, holding around 160,000 tonnes. The basis remained unchanged, with holders showing strong willingness to sell and cash out, keeping spot supply relatively ample. Aluminum prices ticked up; downstream buyers sustained demand releases, procuring on dips. Traders stepped in, prioritizing discounted low-priced cargoes to cover contracts as needed. Overall, trading was steady.
In the South China market, the basis ran at elevated levels. Futures-spot arbitrageurs were active in offloading positions, keeping spot circulation loose. With long-term contracts just initiated, buyers adopted a largely wait-and-see stance, while downstream end-users restocked mainly for rigid demand. Overall, trading was moderate.
In conclusion, near-term aluminum prices are biased to the upside, underpinned by a tight supply-demand balance, historically low inventories, and rising cost support, though U.S. rate-hike headwinds and geopolitical uncertainties will keep volatility elevated.
