On October 12, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract for November delivery increased by 0.36% by the end of Monday's daytime trading and fell by 0.40% overnight, closing the nighttime session at Yuan 23,490/tonne as of 1 a.m. Tuesday, October 13, 2026.
Iran has escalated its crackdown on "non-compliant" vessels, with multiple empty VLCCs (Very Large Crude Carriers) avoiding the Persian Gulf. This has heightened risks to Hormuz shipping and Middle East oil and gas transportation, raising expectations for crude oil, freight rates, and power costs. Consequently, energy costs for aluminum, logistics costs for alumina/bauxite, and regional supply disruption premiums are pushed higher, providing bottom-up support for aluminum prices.
However, Fed's Hammack stated that further rate hikes remain possible in the future, favoring "small, more frequent" adjustments. This implies that the US dollar and real interest rates will remain restrictive, suppressing the financial attributes of non-ferrous metals and speculative buying, thereby restraining the upward momentum of aluminum prices.
Meanwhile, Iran is still reviewing the US stance and responding through intermediaries, leaving the geopolitical risk premium in limbo for now. Saudi Arabia's plan to expand oil pipelines and temporarily convert gas pipelines for oil transport could partially alleviate crude oil transportation bottlenecks, weakening the extreme transmission of "rising oil prices driving up aluminum costs."
On October 12, 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 23,810/tonne, up Yuan 150/tonne from the previous day; in South China Yuan 23,960/tonne, up Yuan 110/tonne from the previous day; and in Central Plains Yuan 23,720/tonne, up Yuan 140/tonne from the previous day.
SHFE aluminum opened lower but moved higher during yesterday's morning session, with the East China spot market performing steadily and improving. Continued inventory drawdowns bolstered holders' confidence, leading to an optimistic outlook and proactive price support. Downstream manufacturers actively chased the rally to replenish inventory, releasing genuine rigid demand, while traders also followed suit in taking deliveries. Overall trading sentiment was positive, with decent transaction volumes.
In the South China market, the prompt price traded below the cross-month average. Holders showed strong willingness to support prices, but with the basis at elevated levels, buyers pressed for lower prices and only took deliveries on dips. However, spot cargoes at discounts were hard to source, resulting in a somewhat stalemated intra-market trade. Downstream factories maintained just-in-time replenishment based on rigid demand, with overall transactions described as moderate.
Overall, Oct 12 SHFE aluminum edged up as Middle East shipping risks lifted costs for energy and logistics, but hawkish Fed capped gains. Spot East China firm on inventory draws; South China stalemated on high basis.
