Futures: From a technical perspective, SHFE aluminium 2601 prices at the night session closed at RMB 21,675 per tonne. The MA5 (21,675) and MA60 (21,674) are near the current price, but the MA10 (21,677) and MA20 (21,677.33) are slightly higher, forming short-term resistance. The MACD indicator is negative (DIF: -0.0843, DEA: 0.4607, MACD: 1.0900), indicating strengthening bearish momentum. The trading volume was 64,880 lots, with a daily increase in open interest of -2,613 lots, accompanying a slight price drop, suggesting generally weak and subdued market participation. Referencing recent highs and lows (night session high: 21,740, low: 21,655) and yesterday's settlement price of 21,650, the short-term resistance zone is viewed at 21,720-21,740, while the support zone is seen at 21,650-21,670. The overall trend is bearish, and it is necessary to monitor whether the support level can hold to avoid further declines.
Macro front: The US officially announced a one-year suspension of the implementation of Section 301 investigation measures against China's shipbuilding and other industries. China announced a one-year suspension of collecting special port dues on US vessels and a one-year suspension of countermeasures against five US-related subsidiaries of Hanwha Ocean Co., Ltd. (Bullish ★) After a 40-day government shutdown, the US Senate procedurally voted to pass a temporary funding bill aimed at ending the government shutdown, but the Senate has not yet scheduled a final vote on the bill, which also still requires a final vote in the House of Representatives. (Neutral ★) An official from the State-owned Assets Supervision and Administration Commission of the State Council stated that central state-owned enterprises continue to increase investment in key areas such as technological innovation, industrial renewal, and equipment upgrades. In the first three quarters, they completed fixed-asset investment of over RMB 3 trillion, an increase of over 3per cent, with investment in emerging industries accounting for approximately 40per cent. (Bullish ★)
Fundamentals: According to SMM statistics, domestic aluminium production in October 2025 (31 days) increased by 1.13per cent Y-o-Y and increased by 3.52per cent M-o-M. The traditional peak season continued in October. Although the "October peak season" was slightly less robust than expected, with the commencement and production increases of downstream processing plants supporting aluminium smelters, the proportion of liquid aluminium at domestic aluminium smelters rebounded more than expected. The industry's proportion of liquid aluminium increased by 1.4 percentage points m-o-m to 77.7per cent this month. Based on SMM's proportion of liquid aluminium data, domestic aluminium casting ingot volume in September decreased by 13.5per cent Y-o-Y and decreased by 2.6per cent m-o-m to around 834,000 tonnes. Demand side, entering November, the industry is in a transition phase between the peak and off-seasons, coupled with persistently high aluminium prices. Downstream procurement is primarily for rigid demand. Extrusion enterprises generally reported a decrease in orders on hand, and the operating rate showed a pullback. Last week, the domestic aluminium extrusion weekly operating rate was 52.6per cent, down 0.9 percentage points w-o-w. Operating rates in other downstream sectors showed varying degrees of weakening. According to SMM statistics, aluminium ingot inventories in major domestic consumption areas recorded 627,000 tonnes this Monday, up 5,000 tonnes w-o-w. SMM expects domestic aluminium ingot inventory trends to stabilise with a slight increase in the first half of November, hovering around 600,000-650,000 tonnes.
Primary aluminium Market: SHFE aluminium fluctuated considerably in the morning session, hitting a high near RMB 21,600 per tonne and a low of RMB 21,495 per tonne. In east China, market views diverged; high absolute prices dampened purchasing by downstream processors, with some enterprises reporting transactions at a discount of RMB 5-10 per tonne against the SMM average price. Traders showed moderate buying sentiment, mainly purchasing for hedging purposes. Suppliers mostly quoted at parity to a premium of RMB 10 per tonne against the SMM average price. Overall, actual transactions ranged from a discount of RMB 10 per tonne to a premium of RMB 10 per tonne against the SMM average price.
The East China market selling sentiment index was 2.98 this Monday, up 0.01 w-o-w; the buying sentiment index was 2.84, down 0.03 w-o-w. SMM A00 aluminium was quoted at RMB 21,490 per tonne this Monday, down RMB 50 per tonne from the previous trading day, at a discount of about RMB 30 per tonne against the 2511 contract, flat from the previous trading day. In the central China market, suppliers showed some intention to hold prices firm this Monday. Downstream purchases remained just-in-time procurement, but traders' hedging sentiment rebounded. Actual transactions centred around a premium of RMB 10-20 per tonne against the SMM average price. The central China market selling sentiment index was 2.90 this Monday, up 0.01 w-o-w; the buying sentiment index was 2.88, up 0.01 w-o-w. SMM central China closed at RMB 21,380 per tonne, down RMB 40 per tonne from the previous trading day, at a discount of RMB 140 per tonne against the November contract, up RMB 10 per tonne from the previous trading day. The price spread between Henan and Shanghai was -RMB 110 per tonne, up RMB 10 per tonne from the previous trading day.
Recycled aluminium Raw Materials: Spot primary aluminium prices fell this Monday compared to the previous trading day, with SMM A00 spot closing at RMB 21,490 per tonne. Aluminium scrap market prices followed aluminium lower. As the traditional peak season ended, downstream demand diverged significantly: demand for scrap used in cast aluminium alloys remained stable, providing more consumption support, while demand for scrap used in wrought aluminium alloys showed initial signs of weakening. However, tight market supply remained the main theme, keeping procurement prices high, though the sustainability of high levels needs observation. Baled UBC scrap was mainly quoted at RMB 16,350-16,950 per tonne(ex-tax) this Monday; shredded aluminium tensile scrap (priced based on aluminium content) was mainly quoted at RMB 17,750-18,250 per tonne(ex-tax). Baled UBC prices held steady or dropped slightly by RMB 50 per ton. Prices for clean tapping aluminium wire, shredded aluminium tensile scrap (priced based on aluminium content), scrap wheel hubs, and mechanical casting aluminium scrap fell by RMB 0-50 per ton. Spot aluminium prices dropped slightly on Monday, with aluminium scrap prices in Shanghai, Zhejiang, and Jiangsu also following a minor downward adjustment.
In terms of the price difference between A00 aluminium and aluminium scrap, the price difference for mechanical casting aluminium scrap in Shanghai narrowed by RMB 50 to RMB 2,752 per tonne, M-o-M, while the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan narrowed by RMB 50 to RMB 2,289 per tonne, M-o-M. The aluminium scrap market is expected to maintain a strong hold this week, with the mainstream price range for shredded aluminium tensile scrap (priced based on aluminium content) potentially moving up to RMB 17,900-18,400 per tonne.
The macro environment, both at home and abroad, continues to release positive signals, and the improvement in orders for downstream casting alloy processing is likely to continue, providing sustained support for aluminium scrap prices. However, two major risks need to be watched: first, under the backdrop of high aluminium prices, enterprises are mostly making just-in-time procurement, reducing raw material inventory stockpiling, which may suppress prices; second, the implementation of environmental protection-driven production restrictions in central China and the potential risk of primary aluminium prices retreating after a rapid rise. If these risks materialise, the aluminium scrap market will face pressure to correct. Overall, the future aluminium scrap market will continue to exhibit a complex tug-of-war between sellers and buyers. It is recommended that market participants closely monitor the trend of primary aluminium prices, changes in downstream demand, and the direction of environmental protection policies.
Secondary aluminium Alloy: On Monday, the SMM A00 spot aluminium price fell by RMB 50 per tonne to RMB 21,490 per tonne; in the secondary aluminium market, the ADC12 price remained stable at RMB 21,350 per tonne. On Monday, the aluminium price saw a narrow decline, and the secondary aluminium market maintained a wait-and-see attitude, with enterprises showing little willingness to adjust prices. The tight supply of aluminium scrap, coupled with the high prices of auxiliary materials such as copper, provided strong cost-side support, giving ADC12 prices short-term upward momentum. Although there is resilience in end-use consumption, high aluminium prices have made downstream procurement more cautious. In the short term, ADC12 prices will hold up well, and attention should be paid to the improvement in aluminium scrap supply, the effectiveness of relevant policy implementations, and changes in the procurement pace of downstream enterprises.
Summary of aluminium Market Trends: The US has suspended its Section 301 investigation into Chinese shipbuilding and other sectors for one year, and China has simultaneously paused special port fees for US ships and countermeasures against Hanwha Ocean's subsidiaries, which helps to ease Sino-US trade tensions and boost expectations for aluminium demand in export sectors like shipbuilding. Domestically, central state-owned enterprises' fixed asset investment in the first three quarters exceeded RMB 300 billion, with emerging industries accounting for 40per cent, continuously strengthening the pull on aluminium consumption in new energy, aerospace, and other downstream sectors, supported by equipment renewal policies. This is expected to sustain the medium and long-term resilience of aluminium consumption. Overall, the marginal improvement in the external environment and supportive domestic industrial policies jointly consolidate the demand outlook for the aluminium market, providing favourable support for aluminium prices.
From a fundamental perspective, entering November 2025, winter environmental restrictions are expected to affect the operations of some enterprises, but considering that electrolysis pot production cannot immediately drop to zero after shutdowns, the change in production is expected to be relatively small. Proportion of liquid aluminium some enterprises report that end-user demand is expected to weaken next month, and the proportion of liquid aluminium is expected to pull back, especially in the second half of November. Expectations for a pullback in the proportion of liquid aluminium strengthen. Currently, aluminium prices are fluctuating at highs, coupled with severe smog in central China, leading to the gradual issuance of environmental protection-driven production restriction policies, which somewhat suppresses demand. Overall, macro tailwinds will partially offset fundamental pressures, but the emergence of off-season characteristics in demand and marginal inventory accumulation will limit the upside room for aluminium prices, and the pattern of aluminium prices fluctuating at highs in the short term remains unchanged.
Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.
Responses
