Futures: The SHFE aluminium 2511 contract fluctuated downward during the night session of October 10, closing at RMB 20,755 per tonne, down 1.59 per cent. The MA indicators show that MA5 (20,766), MA10 (20,764), and MA30 (20,764) are all above the closing price, with short-term moving averages in a bearish arrangement, indicating price pressure; open interest decreased by 11,501 lots, reflecting low market participation and limited downward momentum; in the MACD indicator, both DIF and DEA are negative, and the MACD histogram is -0.9044, confirming the continuation of the bearish trend. SHFE aluminium broke below support and declined during the night session, with a technically bearish bias. The key resistance level is RMB 21,050-21,100 per tonne, where resistance is strong; the primary support below is at the night session low of RMB 20,730 per tonne. If this level is breached, it may test the 20,600-20,700 range.
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Primary aluminium market: SHFE aluminium fluctuated downward, with the price center dropping from around RMB 21,060 per tonne to near RMB 21,000 per tonne. In East China, at the opening, actual transactions were at a discount of RMB 20 per tonne to parity against the SMM average price. However, as traders became more optimistic about future premiums and discounts, purchasing increased, leading to a slight improvement in trading sentiment. Actual transactions narrowed to a discount of RMB 10 per tonne to parity against the SMM average price.
Last Friday, the selling sentiment index in the East China market was 2.80, up 0.09 W-o-W; the buying sentiment index was 2.60, up 0.05 W-o-W. Last Friday, SMM A00 aluminium was quoted at RMB 20,980 per tonne, up RMB 20 per tonne from the previous trading day, at a discount of RMB 50 per tonne against the 2510 contract, down RMB 10 per tonne from the previous trading day.
In the Central China market, as futures prices remained above RMB 21,000 per tonne, downstream purchasing weakened, and trading further softened. Intraday actual transactions were mainly at a discount of RMB 40-30 per tonne against the SMM Central China aluminium price. Last Friday, the selling sentiment index in the Central China market was 2.69, down 0.08 W-o-W; the buying sentiment index was 2.51, down 0.06 W-o-W.
SMM Central China A00 recorded RMB 20,950 per tonne, down RMB 10 per tonne from the previous trading day, at a discount of RMB 80 per tonne against the October contract, down RMB 40 per tonne from the previous trading day. The price spread between Henan and East China decreased by RMB 30 per tonne W-o-W to RMB 30 per tonne.
Recycled aluminium raw materials: Last Friday, spot primary aluminium prices rose slightly compared to the previous trading day, with SMM A00 spot closing at RMB 20,980 per tonne, while aluminium scrap market prices generally increased. With the traditional peak season half over, tight supply remains the main theme in the aluminium scrap market, keeping procurement prices high, though the sustainability of these high levels remains to be seen.
Last Friday, baled UBC was quoted at RMB 15,850-16,450 per tonne (ex-tax), and shredded aluminium tense scrap (priced based on aluminium content) was quoted at RMB 17,500-18,000 per tonne (ex-tax). Baled UBC rose by RMB 150 per tonne W-o-W, while shredded aluminium tense scrap (priced based on aluminium content), scrap wheel hubs, and mechanical casting aluminium scrap each increased by RMB 100 per tonne W-o-W.
On the day after the National Day holiday, major secondary aluminium hubs such as Anhui, Jiangxi, and Foshan raised prices by RMB 100-150 per tonne today, following yesterday's A00 aluminium gains to further lift aluminium scrap quotations. Divergent views emerged regarding the subsequent trend of aluminium scrap prices.
Some participants in the secondary industry believe that after the holiday, aluminium scrap prices will maintain a strong, fluctuating pattern, as the tight supply fundamentals are unlikely to ease in the short term, providing solid support for prices. They expect aluminium scrap prices in October to be guided higher by primary aluminium prices.
However, other feedback suggests that while downstream demand is stable with a positive trend, scrap utilisation enterprises still have limited acceptance of high-priced raw materials and a tendency to drive down prices, which may restrain the upside for prices. According to SMM's comprehensive assessment, the overall aluminium scrap market in October is still expected to hold up well, with the mainstream price range for shredded aluminium tense scrap (priced based on aluminium content) projected to hover around RMB 17,500-18,000 per tonne.
The market should closely monitor the sustainability of post-holiday downstream demand and further guidance from primary aluminium price movements.
Secondary aluminium alloy: On the futures front, the most-traded cast aluminium alloy futures contract for December 2025 (2512) opened at RMB 20,680 per tonne last Friday, reached a high of RMB 20,775 per tonne, fell to a low of RMB 20,495 per tonne, and finally closed at RMB 20,540 per tonne, down RMB 75 per tonne or 0.36 per cent from the previous trading day.
Open interest stood at 12,716 lots, with a trading volume of 3,638 lots; the session was dominated by bearish position increases. In the spot market, the SMM A00 aluminium price rose by RMB 20 per tonne from the previous day to RMB 20,980 per tonne last Friday, while the SMM ADC12 price held steady at RMB 21,100 per tonne.
Driven by tight supply and stronger prices, aluminium scrap prices saw significant increases, and secondary aluminium enterprises showed strong pricing adjustment sentiment under cost support. Post-holiday demand is gradually recovering, but downstream players are mostly focused on digesting inventories or purchasing as needed, leading to generally moderate overall transactions. Currently, the raw material segment remains undersupplied, and enterprises face substantial procurement and cost pressures.
At the same time, stable and improving demand provides upward support for prices; however, continuously rising social inventories are exerting some downward pressure on prices. It is expected that ADC12 prices will maintain a strong, fluctuating trend in the short term. Moving forward, close attention should be paid to raw material supply conditions, changes in social inventories, and the pace of post-holiday demand recovery.
Aluminium market summary: On the Macro Front, China noted the US announcement of plans to impose 100 per cent tariffs on Chinese goods. The US actions severely harm China's interests and seriously undermine the atmosphere of bilateral economic and trade talks, to which China firmly objects. On the evening of October 12, US Vice President Vance, in an interview regarding Trump's latest tariff threats, signalled some moderation. Vance stated during the program: "Trump is willing to engage in rational negotiations with China." (Bearish ★)
Fundamental side, after entering October, some northern aluminium enterprises reported that, driven by peak season demand for downstream processed products, the proportion of liquid aluminium direct supply is expected to increase. This will directly keep aluminium ingot production at low levels, reducing spot aluminium ingot supply in the market and providing supply-side support for aluminium prices.
Inventory side, according to SMM data, domestic aluminium ingot social inventory was approximately 649,000 tonnes on October 9: up 57,000 tonnes M-o-M from September 29, and up 32,000 tonnes M-o-M from September 25.
From a seasonal perspective, no excessive seasonal inventory buildup occurred this year, with inventory at a low level for the same period. Downstream consumption side, peak season resilience was prominent, limiting spot discounts. Against the backdrop of seasonal peak demand, even as aluminium prices rose to a high of RMB 21,000 per tonne, spot market discounts were not deep (the spot-futures price spread did not widen significantly), further confirming demand's supportive effect on prices.
Comprehensive outlook: Short-term, last Friday, Trump threatened to impose 100 per cent tariffs on China, causing SHFE aluminium to break below support levels in the night session, but Vance released signals of negotiation easing, partially alleviating market concerns. Fundamentals provide underlying support; Northern Aluminium Enterprises increased the proportion of direct liquid aluminium supply, keeping aluminium ingot production at low levels, indicating tight supply. Inventory remains low for the period without excessive seasonal buildup, and downstream peak season demand resilience is evident with limited spot discounts, confirming consumption's cushioning effect on prices.
Current aluminium prices are still at a relatively high level; high prices will gradually suppress the procurement pace of downstream buyers, and some small and medium-sized processing enterprises may reduce purchases or delay orders due to cost pressure, leading to marginal weakening in demand and thus limiting upside room for prices. The aluminium market is expected to maintain a pattern of fluctuating at highs. Subsequent focus will be on changes in China-US trade relations and the trend of aluminium ingot inventory.
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.
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