On September 2, 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 0.12% by the end of Wednesday's daytime trading and increased by 0.73% overnight, closing the nighttime session at Yuan 24,235/tonne as of 1 a.m. Thursday, September 3, 2026.
US private payrolls rose just 38,000, and Williams said inflation is slowly declining with current rates appropriate, so markets are pricing in rate-cut expectations, weighing on the dollar and Treasury yields and giving aluminum price a bullish tailwind from valuation and demand expectations. At the same time, the Middle East situation has escalated sharply: Iran's Revolutionary Guards claimed strikes on US bases, Washington threatened further attacks on Iran, and Tehran tied reopening the Strait of Hormuz to the US honoring its commitments. The market is now trading disruption to Gulf aluminum shipments, higher shipping costs, and an energy-price cost premium, clearly lifting the supply-side risk premium.
With these two macro forces combined, aluminum is biased to rise in the near term and find support on dips; LME aluminum has greater upside elasticity from Gulf supply and shipping disruptions, while SHFE aluminum follows higher but is capped by domestic inventories and soft seasonal demand. The picture is "macro easing providing a floor + geopolitical supply drive", for a true trending rally, the key is whether Hormuz disruptions materially affect raw-material inflows and aluminum exports from Middle East smelters. If US CPI rebounds and the Fed turns hawkish, the macro bullishness can unwind, but as long as the Middle East supply story holds, aluminum will still see buying support on dips.
On September 2, 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 24,080/tonne, down Yuan 30/tonne from the previous day; in South China Yuan 24,320/tonne, up Yuan 30/tonne from the previous day; and in Central Plains Yuan 23,950/tonne, down Yuan 40/tonne from the previous day.
On the supply side, China's domestic primary aluminum operating capacity has already reached the 45 million-tonne compliance ceiling, leaving very limited room for further growth this year, with supply rigidity becoming increasingly pronounced.
On the demand side, downstream extrusion profiles remained weak in August due to the drag from the property sector, but structural support has emerged from new energy applications, including photovoltaic frames and lightweighting for new energy vehicles, as well as power grid cables and energy storage, with the market overall transitioning between the off-season and peak season.
On the inventory side, as of end-August, domestic traders' inventories of aluminum ingots stood at 809,000 tonnes, continuing to draw down counter-seasonally, though the actual tradable inventory is even lower.
Yesterday morning, SHFE aluminum fluctuated lower. Traders' inventories in the Central Plains market edged down slightly, holding near 160,000 tonnes. The basis remained unchanged, with holders showing strong willingness to sell and cash out, keeping spot supply relatively ample in the market. As aluminum prices dipped slightly, downstream demand emerged and purchasing picked up. Traders entered the market, prioritizing discounted low-priced cargoes. Trading sentiment improved somewhat, but overall turnover was moderate.
In the South China market, although sellers were active in offloading cargoes, readily tradable spot material was relatively tight. Warehouse warrants, having been stored for a long time, showed poor liquidity in trade. The basis surged intraday to a premium of 260 yuan/ton, and overall spot transactions were moderate.
In summary, aluminum is underpinned by a domestic capacity ceiling, counter-seasonal inventory drawdowns, and supportive macro/geopolitical tailwinds, keeping prices biased to the upside near term. However, a sustained rally requires confirmation from peak-season restocking and tangible Gulf supply disruptions.
