On November 2, 2026, in the derivatives market, aluminum futures on the Shanghai Futures Exchange showed slight volatility. The most-traded aluminum contract decreased by 0.90% by the end of Monday's daytime trading and rose by 0.26% overnight, closing the nighttime session at Yuan 23,275/tonne as of 1 a.m. Tuesday, November 3, 2026.
A US October ISM manufacturing reading of 55.5 signals still-strong overseas industrial demand, which is bullish for aluminum and other base metals; but September PCE rising 3.6% y/y, far from the 2% target, together with the Treasury still needing to borrow heavily, means markets will trade "strong economy and high inflation," keeping the dollar and Treasury yields biased higher and pressuring metals valuations.
Meanwhile, Trump's claim of a crude price crash and the dense but substantively limited US–Iran indirect talks lower the tail risk of a full Middle East conflict and a Hormuz Strait blockade; the fade in crude geopolitical premium weakens the energy-cost and supply-disruption narrative for aluminum, and the "Middle East risk premium" previously priced into aluminum faces downward unwinding.
On November 2, 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 23,520/tonne, down Yuan 260/tonne from the previous day; in South China Yuan 23,560/tonne, down Yuan 230/tonne from the previous day; and in Central Plains Yuan 23,350/tonne, down Yuan 240/tonne from the previous day.
Yesterday morning session, SHFE aluminum oscillated lower. Traders' inventories in the Central Plains market fell and remained around 80,000 tonnes. The basis kept widening; holders actively offloaded material to cash out, so spot supply in the market was relatively ample. Hit by the sharp drop in aluminum prices, downstream buyers restocked on dips and purchasing picked up somewhat. Traders preferred to take low-priced material at discounts. Overall deals improved slightly.
In South China, after the basis moved to a Yuan 130/tonne premium to the current-month contract, spot circulation stayed loose but deeply discounted material was scarce. Buyers mainly lifted metal on dips, and overall turnover was just fair.
Overall, low inventories and manufacturing expansion provide a floor, while on the macro side high inflation and elevated rates cap the upside, and easing geopolitics is draining the risk premium. The bias is therefore toward rangebound trade at high levels with limited upside. If oil prices and geopolitical tensions cool further, aluminum prices are more likely to face near-term pressure and retest lower, though any deep selloff should still be cushioned by resilient inventories and demand.
