On October 23, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract increased by 0.69% by the end of Friday's daytime trading and rose by 1.62% overnight, closing the nighttime session at Yuan 23,575/tonne as of 1 a.m. Monday, October 26, 2026.
Trump stated that the U.S. may strike Iran again or reach a deal, but will not attack today(Eastern Time on the 25th), meaning Middle East geopolitical risks have not dissipated. Disturbances to Gulf aluminum production, shipping, and energy supplies remain, allowing aluminum prices to retain a certain geopolitical risk premium; however, if deal expectations heat up, earlier concerns over energy and supply would unwind, capping upside room.
The U.S. October composite PMI preliminary reading edged down to 57.6 but remains in a high-expansion zone, with new orders and manufacturing activity staying robust; meanwhile, corporate selling price gains hit a four-year high, with energy, fuel, freight, and raw material costs such as aluminum trending upward. This fuels market concerns that the Fed will maintain restrictive rates for longer, keeping the dollar and U.S. Treasury yields biased to the upside, which is negative for the valuation of dollar-denominated base metals; however, rising costs on the input side provide a floor for aluminum prices from below.
On October 23, 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 23,670/tonne, down Yuan 40/tonne from the previous day; in South China Yuan 23,600/tonne, down Yuan 20/tonne from the previous day; and in Central Plains Yuan 23,520/tonne, down Yuan 60/tonne from the previous day.
On Friday morning's session, SHFE aluminum oscillated lower. Traders' inventories in the Central Plains market declined, holding near 80,000 tonnes. As the basis continued to widen, holders actively offloaded cargoes to cash out, keeping spot market supply ample. Although aluminum prices pulled back, downstream buyers remained highly wait-and-see, with purchasing momentum weaker than the previous day, sticking to just-in-time buying. Traders entered the market as needed to source lower-priced material. Overall trading sentiment was cautious, with transactions mediocre.
In South China, aluminum ingot traders' inventories have recently fallen to 123,000 tonnes -- only 5,000 tonnes above the pre-National Day holiday level of 118,000 tonnes. Spot inventories have sustained a drawdown, shifting holders' sentiment toward optimism. Although trading among intermediate merchants was soft, downstream end-users continued to restock on a need-based basis, indicating a degree of resilience in market demand.
Overall, SHFE aluminum posted modest gains into early Monday, underpinned by lingering Middle East geopolitical risks and firm cost support. However, stronger-than-expected U.S. economic and inflation signals reinforced expectations of prolonged Fed restrictive rates, capping upside for dollar-priced metals.
On the physical side, spot markets showed mixed sentiment--ample supply and cautious trading in the Central Plains contrasted with steady destocking and resilient downstream demand in South China. Near-term prices are likely to remain range-bound, caught between geopolitical and cost support below and macro headwinds above.
