On September 18, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract for October delivery increased by 0.74% by the end of Friday's daytime trading and declined by 0.04% overnight, closing the nighttime session at Yuan 24,375/tonne as of 1 a.m. Monday, September 21, 2026.
The U.S. Treasury Secretary's remarks that the Treasury's buyback operations are intended to improve liquidity and manage debt maturities rather than intervene in the market on a large scale have sent a signal of marginal easing, helping to push down long-end Treasury yields and weaken the dollar, thereby providing short-term support to aluminum prices from the financial attribute perspective.
However, Fed's Kashkari simultaneously emphasized that inflation remains too high and its roots extend beyond oil prices alone, meaning that sticky factors such as services inflation and wages will force the Fed to maintain a hawkish stance and delay rate cuts, which in turn suppresses the valuation ceiling of aluminum from the perspectives of real interest rates and the dollar.
The Treasury's buyback operations provide an emotional floor and liquidity backstop for aluminum prices, while the Fed's hawkish stance caps the upside. The combined effect is that aluminum prices are more likely to exhibit a "floor below, ceiling above" pattern of range-bound trading with a mild upward bias.
On September 18, 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 24,380/tonne, up Yuan 200/tonne from the previous day; in South China Yuan 24,600/tonne, up Yuan 200/tonne from the previous day; and in Central Plains Yuan 24,300/tonne, up Yuan 190/tonne from the previous day.
Fundamentals remain well-supported. Last week, domestic traders' inventories of aluminum accelerated their drawdown to 705,000 tonnes, a decrease of 63,000 tonnes week-on-week, with the destocking pace notably picking up. LME inventories have fallen to historically extremely low levels, and the pattern of synchronized destocking across global visible inventories remains unchanged. On the demand side, the operating rate of downstream processing leading enterprises has rebounded, and the trend of mild recovery in the peak season continues.
Last Friday's early session saw SHFE aluminum fluctuating upward. Traders' inventories in the Central Plains market decreased, holding near 130,000 tonnes. As the basis spread widened, holders actively controlled shipments to cash out, resulting in ample circulating supply in the market. With aluminum prices continuing to rise, downstream enterprises slowed their purchasing pace, buying as needed, while traders entering the market prioritized discounted low-priced cargoes, mainly for long-term contracts. Overall market trading was moderate.
In the South China market, aluminum ingot traders' inventories continued to draw down, with the basis spread holding at Yuan 235/tonne. The latest price of the front-month contract at 10:15 rose by nearly Yuan 200/tonne last Friday, but spot prices struggled to keep pace with the rally, and intraday quoted discounts widened slightly. The market remained dominated by rigid demand procurement, with overall trading moderate.
Overall, aluminum prices are caught between marginal easing from U.S. Treasury buybacks and the Fed's hawkish inflation stance, pointing to a range-bound market with mild upward bias. Solid fundamentals underpin the floor, while spot trading remains moderate.
