Macro front, internationally, mid-week this Wednesday, US Supreme Court justices expressed significant doubts about former President Trump's authority to unilaterally impose comprehensive tariffs, questioning whether Trump could bypass Congress to initiate trade conflicts. However, government officials stated that most tariffs could still be implemented through other, more complex legal tools. Notably, the tariffs Trump imposed on steel, aluminium, and automobiles were established under different laws and are thus not directly affected by this case.
Domestically, a spokesperson for the Ministry of Commerce stated that following consultations in Kuala Lumpur, the China-US economic and trade teams reached consensus outcomes mainly in the following areas: the US will cancel the additional 10 per cent so-called fentanyl tariffs on Chinese goods, the additional 24 per cent reciprocal tariffs imposed by the US will be suspended for another year; the US will suspend the implementation of the 50 per cent ownership rule for export controls for one year; the US will suspend Section 301 investigations into China regarding maritime issues, etc., for one year. On October 30 local time, President Xi Jinping met with US President Trump in Busan. Xi pointed out that the economic and trade teams of the two countries had in-depth exchanges on important economic and trade issues and reached a consensus on resolving issues. The teams should quickly refine and finalise follow-up work, maintain and implement the consensus, using tangible results to provide a "ballast stone" for the economies of China, the US, and the world. Mid-week, relevant meetings were also held between China and South Korea and China and Russia. Premier Li Qiang presided over a State Council executive meeting on October 31, deploying measures to accelerate the cultivation and opening of scenarios to promote the large-scale application of new scenarios.
Fundamentals side, according to SMM statistics, domestic aluminium production in October 2025 (31 days) increased 1.13 per cent YoY and was up 3.52 per cent MoM. The traditional peak season continued in October; although the "October peak season" was slightly less robust than expected, as downstream processing plants around aluminium smelters commenced operations and ramped up production, the rebound in the proportion of liquid aluminium at domestic aluminium smelters still exceeded expectations. The industry's proportion of liquid aluminium rebounded 1.4 percentage points m-o-m 77.7 per cent this month. Based on SMM's liquid aluminium proportion data, domestic aluminium casting ingot volume in September decreased approximately 13.5 per cent YoY and fell about 2.6 per cent m-o-m to around 834,000 tonnes. Cost side, although the real-time cost for aluminium edged higher during the week, the strong aluminium price meant the high-profit structure for aluminium smelters remained unaffected.
The cost rose about RMB 72 per tonne w-o-w from last Thursday to RMB 16,115 per tonne, while the immediate theoretical profit for aluminium increased RMB 87 per tonne m-o-m to RMB 5,244 per tonne. Demand side, entering November, the industry is in a transition phase between the peak and off-seasons, coupled with aluminium prices remaining high. Downstream procurement is primarily for rigid demand, with extrusion enterprises generally reporting a decrease in orders on hand, and operating rates showing a pullback. The weekly operating rate for domestic aluminium extrusion recorded 52.6 per cent this week, down 0.9 percentage points w-o-w. Operating rates in other downstream sectors showed varying degrees of weakening. Inventory side, according to SMM statistics, aluminium ingot inventory in mainstream domestic consumption areas recorded 622,000 tonnes this Thursday, a decrease of 5,000 tonnes from this Monday, but an increase of 3,000 tonnes w-o-w. SMM expects domestic aluminium ingot inventory to stabilise with a slight increase in the first half of November, hovering around 600,000-650,000 tonnes.
Overall, macro front, optimistic domestic and overseas macro sentiment persisted. Questions were raised about whether Trump has the authority to initiate trade conflicts bypassing Congress, though most tariffs could still be implemented using other, more complex legal tools. Meanwhile, tariffs imposed by Trump on steel, aluminium, and automobiles were not directly affected. Significant divergence remained regarding a US Fed interest rate cut in December. China-US economic and trade teams reached a good consensus after consultations, and relevant meetings were also held between China and South Korea, and China and Russia mid-week. Fundamentals side, domestic operating aluminium capacity remained flat m-o-min October, with supporting processing plants near aluminium smelters driving the proportion of liquid aluminium to exceed expectations.
Entering November 2025, winter environmental protection-driven production restrictions are expected to impact operations at individual enterprises, but considering that aluminium production cannot immediately drop to zero shortly after pot shutdowns, the production change is expected to be relatively small. Proportion of liquid aluminium side, some enterprises reported that end-user demand is expected to weaken next month, and the proportion of liquid aluminium is expected to pull back, particularly in the second half of November, where expectations for a pullback strengthened. Currently, aluminium prices are fluctuating at highs, coupled with severe smog in central China, leading to the successive issuance of environmental protection-driven production restriction policies, which somewhat suppressed demand. Inventory side, as the traditional peak season ended, the proportion of liquid aluminium faced some pressure at high levels in November, aluminium ingot supply pressure increased, and demand stability was difficult to guarantee under high aluminium prices.
According to SMM statistics, aluminium ingot inventory in mainstream domestic consumption areas recorded 622,000 tonnes this Thursday, an increase of 3,000 tonnes w-o-w. SMM expects domestic aluminium ingot inventory to stabilise with a slight increase in the first half of November, hovering around 600,000-650,000 tonnes. Overall, although fundamental drivers are limited, domestic and overseas macro performance remains optimistic, and the pattern of aluminium prices fluctuating at highs is unlikely to change. SHFE aluminium is expected to trade between 21,300-21,900 per tonne next week, while LME aluminium is expected to trade between USD 2,830-2,930per tonne.
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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