On September 21, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract for October delivery decreased by 0.68% by the end of Monday's daytime trading and declined by 0.45% overnight, closing the nighttime session at Yuan 24,195/tonne as of 1 a.m. Tuesday, September 22, 2026.
Fed officials' hawkish signals, stating that rates will be raised further if inflation does not cool, and that earlier hikes are preferable to later ones, create a combined impact of near-term bearishness and medium-term demand suppression on aluminum prices: rising rate expectations push up the U.S. dollar and Treasury yields, pressuring dollar-denominated LME aluminum first and foremost, which in turn drags SHFE aluminum slightly lower.
On September 21, 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 24,320/tonne, down Yuan 60/tonne from the previous day; in South China Yuan 24,550/tonne, down Yuan 50/tonne from the previous day; and in Central Plains Yuan 24,230/tonne, down Yuan 70/tonne from the previous day.
SHFE aluminum is currently in a "supply-capped, inventories-low, demand-resilient-but-cautious-ahead-of-holiday" setup: domestic aluminum capacity is approaching the 45-million-tonne ceiling, new supply additions are limited, and traders' inventories remain relatively low, with cost support from alumina and power; on the demand side, real estate stays weak, but solar, NEV, and cable-related green-demand aluminum underpins consumption.
The "golden September, silver October" season has prompted some downstream pre-holiday restocking, yet high prices discourage chasing the rally, so overall trading is just moderate. Macros are pressured by Fed rate-hike expectations and a stronger dollar, while fundamentals are backed by low inventories and rigid supply, meaning SHFE aluminum will likely hold a high-level oscillation with clear upside and downside boundaries.
Yesterday's early session saw SHFE aluminum fluctuate in a narrow range before trending lower. Traders' inventories in the Central Plains market increased, holding near 130,000 tonnes. As the basis widened, holders actively controlled shipments to cash out, resulting in ample circulating supply in the market. Aluminum prices pulled back slightly but remained at relatively elevated levels. Ahead of the upcoming Double Festival holiday, downstream enterprises purchased on an as-needed basis, with some beginning pre-holiday stockpiling. Traders entering the market prioritized discounted low-priced cargoes. Overall market trading was moderate.
In South China, the basis remained elevated. Although spot supply was loose, with long-term contract delivery deadlines approaching, traders pressed prices to source cargoes for fulfilling long-term contracts, leading to a fairly active buying atmosphere. Downstream end-users maintained just-in-time procurement, and overall trading was decent.
Overall, SHFE aluminum is caught between a hawkish Fed and a tight physical market. While macro headwinds from rising rate expectations and a stronger dollar cap the upside, the downside remains cushioned by supply rigidity, low inventories, and resilient green-energy demand. The market is likely to stay range-bound, with prices oscillating at elevated levels until a clearer macro or fundamental catalyst emerges.
