On September 4, 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 0.06% by the end of Friday's daytime trading and decreased by 0.23% overnight, closing the nighttime session at Yuan 24,320/tonne as of 1 a.m. Monday, September 7, 2026.
US August nonfarm payrolls rose by 162,000, nearly three times market expectations, while June and July payroll gains were revised up by a combined 55,000, pushing Fed rate-hike expectations higher. Trump said that if the Fed does not cut rates, the US will stop trading with many countries, arguing that growth does not cause inflation and the US should keep the world's lowest interest rates. After the dollar and short-end US Treasury yields moved higher, dollar-denominated aluminum faces pressure from its financial attributes: holding costs rise and speculative risk appetite falls, capping LME aluminum and Shanghai aluminum on the upside.
Fed's Hammack noted that economic data and business feedback show current monetary policy is not yet restrictive, inflation remains too high, and action is needed. Hammack's hawkish remarks further reinforce high-rate expectations. As a result, aluminum prices in the near term are dragged into weak, rangebound trading by a strong dollar, rising real rates and global trade uncertainty; if upcoming US CPI surprises to the upside again, aluminum prices face renewed downside risk toward support levels. Still, supply-side capacity caps and demand from new energy, power infrastructure and AI-related aluminum applications provide a floor, so aluminum is more likely to follow a "macro compressing valuations, fundamentals providing support" pattern of pressured but resilient trading.
On September 4, 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 24,360/tonne, up Yuan 10/tonne from the previous day; in South China Yuan 24,520/tonne, down Yuan 40/tonne from the previous day; and in Central Plains Yuan 24,210/tonne, remained stable from the previous day.
Fundamentally, the market remains in a steady-to-improving trend. Downstream enterprises are optimistic about the upcoming "Golden September, Silver October" demand growth, with stronger willingness to replenish stocks on dips; purchasing intensity has picked up and demand release has improved compared with earlier periods.
Last Friday, SHFE aluminum gained, with traders' aluminum ingot stocks falling further to 789,000 tonnes. The sector remains fundamentally supported. Overseas supply-growth expectations cap upside, but low overseas inventories and continued domestic destocking into the demand shoulder season keep SHFE aluminum biased firm, likely ranging around Yuan 24,000/tonne near term.
SHFE aluminum traded in a narrow range during Friday's morning session, with the East China spot market showing signs of softening. In early trade, supported by the ongoing inventory drawdown, holders remained inclined to hold back supply and quote firm, offloading volumes only gradually. However, as expectations of a stronger basis faded and aluminum prices held at elevated levels heading into the weekend, profit-taking and cash-out pressure built across the market. Some sellers proactively lowered offers, and the discount on available spot cargoes widened progressively. Downstream consumers showed some willingness to restock on price upticks, but mid-trader appetite for taking on material stayed subdued, leaving overall trading activity lackluster.
In the South China market, physical cargoes proved harder to move; by late session, holders were forced to cut quotes further to a discount of Yuan 30/tonne, which finally drew modest improvement in spot turnover. On an absolute-price basis, the contract held in a tight band, while the spot-to-futures basis retreated from highs to a premium of Yuan180/tonne. The North-South price spread narrowed, with both mid-trader and end-user buyers stepping in selectively on dips, maintaining procurement largely confined to essential needs.
In summary, macro stays hawkish and caps the upside while destocking and seasonal restocking on the fundamental side cushion the floor with prices left rangebound and lacking any clear directional break.
