On October 27, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract decreased by 0.30% by the end of Tuesday's daytime trading and rose by 0.79% overnight, closing the nighttime session at Yuan 23,660/tonne as of 1 a.m. Wednesday, October 28, 2026.
In the aluminum sector, the US Dollar Index remains elevated near 102. US inflation data exceeding expectations briefly strengthened bets on Federal Reserve rate hikes, exerting valuation pressure on dollar-denominated base metals.
Fundamentals present a mixed picture: the strong near-term reality for aluminum ingot inventories remains intact. As of Monday this week, traders' inventories posted a weekly drawdown of approximately 55,000 tonnes to 511,000 tonnes, with aluminum bar inventories also declining in tandem. LME inventories at historic lows continue to provide rigid support for the front-month structure.
On October 27, 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 23,890/tonne, down Yuan 80/tonne from the previous day; in South China Yuan 23,880/tonne, down Yuan 40/tonne from the previous day; and in Central Plains Yuan 23,710/tonne, down Yuan 100/tonne from the previous day.
In SHFE aluminum, the contract edged lower through the early session yesterday. The East China spot market showed soft performance: slower inventory drawdowns and an elevated basis prompted holders to turn notably bearish on the outlook, leading to strong willingness to dump inventories. Discounted supplies circulated widely.
With aluminum prices oscillating within a narrow range, downstream rigid demand was decent, but intermediate traders' appetite for taking on spot cargoes was sluggish, which was insufficient to absorb the increased market supply. Trading later devolved into a "price without buyers" scenario, with overall turnover light.
In the South China market, intermediate traders were spot sellers and futures buyers, betting on basis narrowing. Spot circulation was relatively loose. Downstream end-users restocked mainly for rigid needs, with overall turnover mediocre.
Overall, at a stage where macro risk appetite fails to provide stable tailwinds, inventory drawdowns are better characterized as a downside-resistant attribute rather than an offensive one. Aluminum prices are expected to remain range-bound.
