Futures: The most-traded SHFE aluminium 2510 contract opened at 20,760 RMB per tonne during the night session, reaching a highest price of RMB 20,780 per tonne and a lowest price of RMB 20,695 per tonne, closing at RMB 20,705 per tonne. Trading volume was 4.8 lots, and open interest was 241,000 lots. LME opened at USD 2,607.5 per tonne, with a highest price of USD 2,611 per tonne, a lowest price of USD 2,607.5 per tonne, and closed at USD 2,609 per tonne.
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Macro: (1) Li Chenggang, Vice Minister and International Trade Representative of the Ministry of Commerce, led a delegation to visit Canada from August 24 to 27, co-hosting the 28th China-Canada Economic and Trade Joint Committee with the Canadian side. Both sides agreed to continue leveraging the mechanism platform of the China-Canada Economic and Trade Joint Committee, accumulating positive outcomes in economic and trade areas through subsequent communication and exchanges, and promoting healthy, stable, and sustainable development of China-Canada economic and trade relations. Afterward, Li Chenggang's team will travel to Washington, US, to meet with relevant US officials. (Bullish ★) (2) The US Q2 real GDP annualized revision increased by 3.3 per cent MoM, higher than the expected 3.1 per cent and the initial value of 3 per cent. The Q2 core PCE price index annualized revision increased by 2.5 per cent MoM, consistent with the initial value but lower than the expected 2.6 per cent. (Bullish ★)
Fundamentals: (1) According to SMM statistics, on August 28, the inventory of primary aluminium ingot in major domestic consumption areas was 620,000 tonnes, up 4,000 tonnes from Monday and up 24,000 tonnes from last Thursday. (Bearish ★)
(2) On August 28, 2025, according to SMM statistics, the inventory of aluminium billet in Guangdong was 62,500 mt, and in Wuxi, it was 31,000 tonnes, totalling 93,500 tonnes, an increase of 500 tonnes from the previous period. (Bearish ★)
(3) On August 28, SMM statistics showed that the inventory of primary aluminium in the Shanghai Bonded Zone was 79,500 tonnes, and in the Guangdong Bonded Zone, it was 20,000 tonnes, totalling 99,500 tonnes, a decrease of 2,400 tonnes from last week. (Bullish ★)
Primary Aluminium Market: Yesterday, the centre of SHFE aluminium early trading moved upward, but the absolute price fell compared to the previous trading day, with the centre around RMB 20,720 per tonne. In east China, the absolute price of aluminium futures fell, and downstream procurement sentiment recovered, but still mainly focused on just-in-time procurement, with insufficient restocking enthusiasm. Actual transactions were on par with the SMM average price. The East China market's selling sentiment index was 2.84, up 0.06 W-o-W; the purchasing sentiment index was 2.5, up 0.18 W-o-W. SMM A00 aluminium was quoted at RMB 20,730 per tonne, down RMB 110 per tonne from the previous trading day, at a discount of RMB 20 per tonne against the 09 contract, unchanged from the previous day.
In central China, after the absolute price fell, downstream restocking enthusiasm increased, and trading activity turned from the previous days' silence to active. Actual transactions were at a premium of RMB 10-20 per tonne against the SMM central China aluminium price, with the market shifting from hedging-based just-in-time procurement to low-price restocking by processing enterprises. Yesterday, the sentiment index for shipments in the central China market was 2.97, up 0.53 MoM; the purchasing sentiment index was 2.89, up 0.78 M-o-M. SMM A00 aluminium against SHFE aluminium 2509 contract closed at RMB 20,570 per tonne, down RMB 90 per tonne from the previous trading day, with a discount of RMB 180 per tonne against the 09 contract, up RMB 20 per tonne.
Recycled aluminium raw materials: Yesterday, the spot price of primary aluminium fell RMB 110 per tonne compared to the previous trading day, with SMM A00 spot closing at RMB 20,730 per tonne, and the overall aluminium scrap market followed the decline. As the traditional peak season approaches, orders for some downstream scrap utilization enterprises have recovered, but the tight supply in the aluminium scrap market remains the main theme, keeping procurement prices high. Yesterday, the concentrated quotes for baled UBC were RMB 15,550-16,050 per tonne (excluding tax), and shredded aluminium tense scrap (priced based on aluminium content) were RMB 17,100-17,600 per tonne (excluding tax).
Baled UBC fell RMB 50 per tonne M-o-M, and shredded aluminium tense scrap (priced based on aluminium content) fell RMB 100 per tonne MoM. In Jiangxi and Anhui regions, the prices of aluminium tense scrap followed a RMB 100 per tonne decline, while in Hubei and Hunan, the aluminium scrap prices remained stable, adopting a wait-and-see approach. It is expected that next week, aluminium scrap prices will fluctuate at highs, with the tug-of-war between sellers and buyers intensifying.
From a macro perspective, the ongoing special cleanup of irregular tax rebates in multiple regions will have a profound impact on the cost structure of the recycled aluminium industry. During the policy transition period, downstream scrap utilisation enterprises, to offset the potential increase in tax costs, may further drive down purchasing prices, increasing the risk of aluminium scrap price declines. However, the tight supply situation is unlikely to change in the short term, especially the scarcity of shredded aluminium tense scrap resources, which will continue to give suppliers bargaining power.
SMM expects that the mainstream range for shredded aluminium tense scrap (priced based on aluminium content) will hover around RMB 17,100-17,600 per tonne (excluding tax), while baled UBC prices, supported by rigid demand, will linger between RMB 15,500-16,000 per tonne (excluding tax).
Overall, the market needs to closely monitor the implementation of policies and the strength of the "September peak season" consumption recovery, as price trends will depend on the outcome of the tug-of-war between cost transmission and supply shortages.
Secondary aluminium alloy: On the futures side, yesterday, the most-traded cast aluminium alloy 2511 futures contract opened at RMB 20,350 per tonne, reached a high of RMB 20,360 per tonne, a low of RMB 20,230 per tonne, and finally closed at RMB 20,350 per tonne, down RMB 15 per tonne or 0.07 per cent from the previous trading day. Open interest was 8,229 lots, and trading volume was 1,883 lots, with bulls mainly reducing their positions. In the spot market, SMM A00 aluminium price fell RMB 110 per tonne to RMB 20,730 per tonne compared to the previous day, while SMM ADC12 price remained steady at RMB 20,750 per tonne. Due to the tight circulation, aluminium scrap prices remained firm, continuing to support ADC12 prices.
Additionally, frequent news of the cancellation of tax rebates and supplementary taxes in various regions has led to a strong desire among enterprises to pass on costs, making prices more likely to rise than fall in the short term.
Demand side, approaching the traditional September peak season, downstream procurement only recovered mildly, and high prices suppressed market inquiry activity but actual transactions were average; the spot-futures price spread strengthened, improving shipments for trading firms engaging in both spot and futures market. ADC12 prices are expected to continue fluctuating upward in the short term, supported by cost, low inventory, and policy pressure, but slow demand recovery may limit upside room. Follow-up attention should focus on policy implementation progress, aluminium scrap supply recovery, and marginal changes in end-use demand.
Summary: On the macro front recently, global economic and trade friction continued to ease, the China-Canada Joint Economic and Trade Committee released positive signals of cooperation, coupled with better-than-expected US economic data, boosting market risk appetite. Market sentiment leaned optimistic, supporting aluminium prices. Demand side, as August draws to a close, the September-October peak season is approaching, and weekly operating rates downstream showed stronger signs of recovery this week. The operating rate of leading domestic aluminium extrusion enterprises rose 1.5 percentage points W-o-W to 52 per cent, mainly driven by industrial extrusion enterprises led by PV extrusion.
Other sectors such as aluminium plate/sheet, strip and foil, and aluminium wire and cable also saw certain increases in operating rates. Inventory side, according to SMM statistics, on August 28, aluminium ingot inventory in mainstream domestic consumption areas was 620,000 tonnes, up 4,000 tonnes from this Monday and up 24,000 tonnes W-o-W from last Monday.
Aluminium ingot absolute prices pulled back slightly, and buying sentiment improved, but it has not yet reached the level to stimulate large-scale market restocking.
Under the off-season, the inventory buildup pace and high aluminium prices will continue to suppress spot premiums. Overall, on the macro front, rising expectations for US Fed interest rate cuts and China's policies boosting domestic demand have created a generally favourable atmosphere, which is expected to improve the aluminium consumption outlook.
However, it will take time for domestic policy support to transmit to actual consumption. In the traditional September peak season, aluminium prices are more likely to rise than fall overall, but top-side pressure remains. For aluminium prices to effectively break through the important resistance level of RMB 21,000 per tonne, it will require the realisation of expectations for the September-October peak season in aluminium consumption, as well as verification through the subsequent appearance of a destocking turning point for domestic aluminium ingots and continued strength in downstream operating performance. SMM expects aluminium prices to continue holding up well in the near 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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