On October 29, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract decreased by 1.17% by the end of Thursday's daytime trading and rose by 0.06% overnight, closing the nighttime session at Yuan 23,375/tonne as of 1 a.m. Friday, October 30, 2026.
Against the backdrop of Iran yet to respond to Vance's letter, insisting that the U.S. meet seven conditions, while denying seeking medical aid and stating it will disclose details in due course, Middle East geopolitical uncertainty has not eased.
Coupled with the Iranian Navy's claim that three unauthorized oil tankers struck mines and exploded on illegal routes in southern waters of the Strait of Hormuz, the market is once again pricing in risks to energy transport and Gulf security, putting upward pressure on oil prices and inflation expectations. At the same time, the U.S. has completed the final batch of crude oil lending under a global agreement, with approximately 40 million barrels set to enter the market, and this supply release partly caps oil's upside.
Meanwhile, the U.S. September core PCE price index rose to 3.1% year-on-year from 3% the previous month, and Q3 GDP grew 3.4%, beating expectations and signaling continued economic resilience and sticky inflation. This has weakened market expectations for a rapid Fed rate cut, making the dollar and U.S. Treasury yields prone to staying firm.
For aluminum prices, geopolitical risks and Middle East energy disruptions provide a floor via safe-haven and cost support, but a stronger dollar, delayed rate-cut expectations, and mixed crude signals constrain upside elasticity. In the near term, aluminum prices are more likely to exhibit a "risk premium floor, macro rate cap, range-bound with a mild upward bias" pattern.
On October 29, 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 23,740/tonne, down Yuan 190/tonne from the previous day; in South China Yuan 23,730/tonne, down Yuan 180/tonne from the previous day; and in Central Plains Yuan 23,550/tonne, down Yuan 180/tonne from the previous day.
Yesterday's early session saw SHFE aluminum fluctuate widely. The East China market showed some improvement, with inventory inflows and outflows roughly balanced and little overall change. Although the monthly spread narrowed significantly and the basis continued to widen, holders actively offloaded cargoes to cash out, while downstream manufacturers purchased in small quantities as needed. Affected by the aluminum price decline, buying interest improved slightly, but traders remained cautious about entering the market, resulting in overall average trading activity.
Overall, SHFE aluminum traded sideways amid mixed macro signals--persistent Middle East tensions and energy risks offered cost and safe-haven support, while resilient U.S. data and sticky inflation tempered rate-cut bets, keeping the dollar firm and capping upside. Spot physical markets saw improved East China activity, but cautious restocking and active seller offloading kept overall trading muted. Near-term aluminum prices are likely to stay range-bound with a mild upward bias.
