Futures: Technically, the SHFE aluminium 2601 contract extended gains in yesterday's night session, closing at RMB 21,950 per tonne, up 0.85per cent, showing strong performance. The moving average system displayed a bullish alignment, with MA5 to MA60 (21,945-21,949) highly converged and prices stabilising above, forming solid short-term support. The MACD indicator strengthened further, with DIF (0.4995) crossing above DEA (-0.1300) to form a golden cross, and the histogram expanding into positive territory to 1.2591, indicating strengthening upward momentum. Overall, prices successfully broke through the previous day's resistance, and the short-term technical structure is bullish. Near-term key support is expected in the 21,860-21,950 range, with resistance eyed at 22,000-22,300. The overall market holds up well, with attention on the test of key resistance levels.
Macro front: "Fed Whisperer" Nick Timiraos noted that four regional Fed presidents with voting rights were not enthusiastic about another interest rate cut in December. Boston Fed President Collins stated the Fed is likely to keep rates at current levels for some time. The labour market has not deteriorated, and the Fed needs to ensure inflation sustainably returns to 2per cent before cutting rates. (Neutral★) Chinese Vice Premier He Lifeng met with leaders of the National Committee on US-China Relations, stating that both sides should jointly maintain and implement the important consensuses and outcomes of the leaders' meeting, and promote stable development of China-US economic and trade relations. (Bullish★) The US House of Representatives will vote on a temporary funding bill on Wednesday evening EST, meaning the longest federal government shutdown crisis in US history, now in its 43rd day, is expected to end. The White House press secretary said this shutdown could reduce Q4 economic growth by two percentage points, and the October CPI and employment reports "may never be released." (Neutral★)
Fundamentals: According to SMM statistics, the industry's proportion of liquid aluminium rebounded 1.4 percentage points m-o-m to 77.7per cent this month. Demand side, entering November, the industry is in a transition period between peak and off-seasons, coupled with persistently high aluminium prices, downstream procurement is mainly for rigid demand. Extrusion enterprises generally reported reduced orders on hand, and operating rates showed a pullback trend. Last week, the domestic aluminium extrusion weekly operating rate recorded 52.6per cent, down 0.9 percentage points w-o-w. Operating performances in other downstream sectors also showed varying degrees of weakness. According to SMM, domestic electrolytic aluminium ingot inventory in mainstream consumption areas recorded 621,000 mt this Thursday, destocking 6,000 mt from this Monday. SMM expects domestic aluminium ingot inventory to operate around 600,000-650,000 mt in the first half of November.
Primary aluminium Market: SHFE aluminium mainly fluctuated with adjustments in the early session, trading around RMB 21,680 per tonne. East China, approaching contract rollover, suppliers mainly held prices firm and were reluctant to sell; shipments decreased, coupled with large players entering the market to purchase, actual transactions maintained parity to a premium of RMB 10 per tonne against the SMM average price. The shipment sentiment index in the East China market on Wednesday was 3.05, up 0.03 w-o-w; the purchase sentiment index was 2.97, up 0.08 w-o-w. On Wednesday, SMM A00 aluminium closed at RMB 21,670 per tonne, up RMB 50 per tonne from the previous trading day, at a discount of RMB 10 per tonne against the November contract, up RMB 10 per tonne from the previous trading day. In the central China market on Wednesday, suppliers' willingness to sell at high prices increased, but downstream maintained just-in-time procurement, and the purchase market cooled, resulting in low trading volume. Pre-market, suppliers tended to sell at parity or a premium; after the futures prices opened higher, most negotiated transactions were at a discount. Actual transaction prices in the market ranged from a discount of RMB 10 yuan to a premium of RMB 10 yuan against the central China price. SMM central China closed at RMB 21,550 per tonne, up RMB 40 per tonne from the previous trading day, at a discount of RMB 130 per tonne against the November contract, flat from the previous trading day; the price difference between Henan and Shanghai was -RMB 120 per tonne, down RMB 10 per tonne from the previous trading day.
Recycled aluminium Raw Materials: On Wednesday, spot primary aluminium prices edged up slightly compared to the previous trading day, with SMM A00 spot aluminium closing at RMB 21,670 per tonne; aluminium scrap market prices followed the aluminium price higher with slight increases. The traditional peak season has ended, and 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, purchase prices stayed high, but the sustainability of high levels needs to be considered. On Wednesday, baled UBC was quoted at RMB 16,450-16,950 per tonne (ex-tax), and shredded aluminium tensile scrap (priced based on aluminium content) was quoted at RMB 17,900-18,550 per tonne (ex-tax). Baled UBC prices rose RMB 100 per tonne w-o-w; clean tapping aluminium wire, shredded aluminium tense scrap (priced based on aluminium content), scrap wheel hub, mechanical casting aluminium scrap, and aluminium shavings prices rose RMB 25-150 per tonne w-o-w on Wednesday. With the rise in spot aluminium prices on Wednesday, aluminium scrap prices in Hunan, Anhui, Hubei, Jiangxi, and other regions followed with increases of RMB 100-200 per tonne, while prices in Shanghai, Zhejiang, Jiangsu, Tianjin, and other regions mainly held steady or increased 25-50 per tonne.
Regarding the price difference between A00 aluminium and aluminium scrap, the price difference for mechanical casting aluminium scrap in Shanghai widened by RMB 50 per tonne from the previous trading day to RMB 2,932 per tonne; the price difference for mixed aluminium extrusion scrap free of paint in Foshan widened by RMB 40 per tonne from the previous trading day to RMB 2,449 per tonne. The aluminium scrap market is expected to hold up well 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 at home and abroad continues to release positive signals, and the improvement trend in orders for downstream cast alloy processing is expected to continue, providing sustained support for aluminium scrap prices. However, two risks require vigilance: first, amid high aluminium prices, enterprises mostly make just-in-time procurement and reduce raw material inventory hoarding, which may suppress prices; second, the implementation of environmental protection-driven production restriction plans 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 pullback pressure. Overall, the aluminium scrap market will continue its complex tug-of-war between sellers and buyers in the future. Market participants are advised to closely track primary aluminium price trends, changes in downstream demand, and developments in environmental protection policies.
Secondary aluminium alloy: This Wednesday, SMM A00 aluminium spot prices rose by RMB 50 per tonne to RMB 21,670 per tonne; in the secondary aluminium market, ADC12 prices held steady at RMB 21,500 per tonne. Aluminium prices edged up this Wednesday, while secondary aluminium market prices remained stable temporarily. The tight supply of aluminium scrap persists, coupled with prices of auxiliary materials like copper fluctuating at highs, providing strong support from the cost side. ADC12 prices still have upward momentum in the short term. Although end-use consumption resilience underpins demand, aluminium prices are at highs, leading to cautious procurement by downstream players. In the short term, ADC12 prices are expected to hold up well. Subsequent focus should be on improvements in aluminium scrap supply, the implementation effects of relevant policies, and changes in the procurement pace of downstream enterprises.
Aluminium market summary: High-level interactions between China and the US released positive signals, with both sides committed to stabilising economic and trade relations, which helps improve the external demand environment and market risk appetite for the aluminium market. On the other hand, the longest US government shutdown crisis in history is expected to be resolved, avoiding further impact on economic activity and metal demand from political gridlock and easing market concerns.
From a fundamental perspective, entering November 2025, winter environmental protection restrictions are expected to affect operations at individual enterprises. However, considering that aluminium production cannot immediately drop to zero shortly after pot shutdowns, the production change is expected to be relatively small. Currently, aluminium prices are fluctuating at highs, coupled with severe smog in central China, leading to the rollout of environmental protection-driven production restriction policies, which somewhat suppresses demand. Overall, positive macro-level signals have strengthened market optimism regarding the aluminium market's fundamentals. Hopes for improved domestic and external demand jointly constitute short-to-medium-term upward drivers for aluminium prices. However, the emergence of off-season characteristics in demand and marginal inventory accumulation will limit the upside room for aluminium prices. The pattern of aluminium prices fluctuating at highs is unlikely to change in the short term.
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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