On October 22, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract increased by 0.89% by the end of Thursday's daytime trading and dropped by 0.19% overnight, closing the nighttime session at Yuan 23,145/tonne as of 1 a.m. Friday, October 23, 2026.
Trump accused Iran of fabricating attacks, mining incidents, and other events to drive up oil prices, while stating that the U.S. has already dealt a heavy blow to Iran and may take further action. Combined with U.S. Central Command's claim of blocking at least US $25 billion in Iranian crude oil exports, geopolitical and supply-side narratives are providing short-term support to energy prices, reinforcing inflation persistence, and increasing risk premiums and volatility premiums across commodities.
Meanwhile, U.S. initial jobless claims fell to 194,000, a three-month low and near a roughly 57-year low, indicating strong employment resilience, which may lead markets to delay the pace of Federal Reserve rate cuts and drive the U.S. dollar and Treasury yields higher.
For aluminum prices, geopolitical and oil price factors provide a floor through cost support and supply disruption expectations, but a stronger dollar and prolonged higher interest rates will weigh on financial attributes and overseas demand expectations. As a result, aluminum prices are more likely to exhibit a range-bound pattern with cost and geopolitical support at the bottom, and macro headwinds from above.
On October 22, 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 23,710/tonne, up Yuan 100/tonne from the previous day; in South China Yuan 23,620/tonne, up Yuan 90/tonne from the previous day; and in Central Plains Yuan 23,580/tonne, up Yuan 100/tonne from the previous day.
Yesterday's early session saw SHFE aluminum fluctuate downward. Traders' inventories in the Central Plains market decreased, holding steady at around 90,000 tonnes. As the basis spread continued to widen, holders' willingness to sell increased, market supply became abundant, and quoted prices retreated.
With aluminum prices rising, downstream buyers grew increasingly wary of high prices, maintaining just-in-time procurement, and consumption willingness gradually weakened. Traders remained on the sidelines, entering the market only to selectively source lower-priced material as needed. Overall trading sentiment was cautious, with transactions mediocre.
According to Mysteel data, the spot transaction price of A00 aluminum ingots in the South China market rose compared to the previous trading day. The SHFE aluminum November–December contract spread widened to Yuan 300/tonne, resulting in persistent net selling pressure in the cash market. The basis against the December contract reached Yuan 490/tonne, while the basis against the current-month November contract stood at Yuan 185/tonne. Market enthusiasm for shorting the basis, by selling spot and buying futures, remained high. Spot transactions were primarily driven by next-month delivery factories replenishing inventory at lower prices, while trading activity among intermediate merchants was relatively weak.
Aluminum prices are caught between offsetting forces: geopolitical tensions and firm energy costs provide a floor, while a resilient U.S. labor market and delayed Fed rate-cut expectations strengthen the dollar and cap upside. Domestically, spot fundamentals remain soft--ample supply, widening spreads, and cautious buying keep trading lackluster.
