On October 21, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract increased by 0.22% by the end of Wednesday's daytime trading and rose by 1.44% overnight, closing the nighttime session at Yuan 23,300/tonne as of 1 a.m. Thursday, October 22, 2026.
Iran's foreign minister stated that "there is currently no reason to see progress in negotiations," the US only clarified that the evacuation of embassy personnel applies to Saudi Arabia rather than a full-scale withdrawal across the entire Gulf region, and Iranian officials said that if attacks resume, US political targets will be designated as strike objectives. This indicates that the "fighting while talking" pattern between the US and Iran remains unchanged. The risks to transportation through the Strait of Hormuz and of Middle Eastern energy, bauxite, alumina, and primary aluminum persist. Oil prices and energy inflation expectations remain supported, and Middle Eastern supply disruption premiums relatively strong, which favors LME aluminum maintaining a risk premium.
However, the US lending of 315,000 barrels of heating oil is merely a small-scale move to ease fuel pressure, and it treats the symptoms but not the root cause. This actually reflects that the Middle East conflict has already driven up crude oil prices, thereby pushing up global inflation and expectations that the Federal Reserve will maintain high interest rates or even tighten further. A stronger US dollar and rising Treasury yields will in turn suppress the financial attributes of non-ferrous metals.
On October 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 23,610/tonne, up Yuan 80/tonne from the previous day; in South China Yuan 23,530/tonne, up Yuan 70/tonne from the previous day; and in Central Plains Yuan 23,480/tonne, up Yuan 80/tonne from the previous day.
Yesterday, the early session saw SHFE aluminum fluctuating downward. Traders' inventories in the Central Plains market decreased, holding steady at around 90,000 tonnes. The basis continued to widen, with few transactions concluded near the early-session market average price. Holders actively offloaded cargoes to cash out, keeping market supply relatively ample.
As aluminum prices rose, downstream buyers purchased on an as-needed basis, and consumption momentum weakened compared to the previous day. Traders entered the market to pick up low-priced cargoes, trading sentiment remained cautious, and overall transaction volumes were moderate.
Geopolitical tensions between the US and Iran continue to underpin energy costs and supply-risk premiums, supporting LME aluminum. However, persistent inflation expectations and Fed hawkishness strengthen the dollar and cap upside from the financial side. Domestically, spot sentiment remains cautious with ample supply and downstream buying limited to need-based demand. Overall, aluminum prices are expected to stay rangebound, caught between geopolitical support and macro headwinds.
