Futures: From a technical perspective, the SHFE aluminium 2601 contract rose slightly by 0.28 per cent to RMB 21,750 per tonne during the night session on November 11, showing an overall pattern of fluctuating upward within a narrow range. The moving averages (MA5, MA10, MA30, MA60) were densely distributed in the range of 21,731-21,737, with the price slightly above the moving averages, indicating a short-term bullish bias but limited momentum. In the MACD indicator, the DIF (1.8998) was higher than the DEA (1.0469), and the histogram was positive (1.7058), showing mild upward momentum but insufficient strength. The trading volume was 77,905 lots, accompanied by an increase in open interest of 8,954 lots, reflecting a slight inflow of funds. Referencing the night session's low of 21,635 and high of 21,780, short-term support is expected at 21,700-21,730 (the MA dense area and previous low), while resistance is seen at 21,780-21,800 (previous high and psychological resistance). The overall market is in a tug-of-war between longs and shorts, and the direction of the breakout needs to be watched.
Macro front: The U.S. announced the suspension of the export control rule of penetration from November 10, 2025, to November 9, 2026. The Ministry of Commerce responded, stating that this is an important measure by the U.S. to implement the consensus from the China-U.S. Kuala Lumpur economic and trade consultations. Arrangements after the one-year suspension will continue to be discussed. (Bullish ★) According to foreign media reports, Mexico's plan to impose tariffs on China has been postponed again and is scheduled for deliberation in Congress as early as December. Against the backdrop of certain countries arbitrarily imposing tariffs, China and Mexico should strengthen communication and coordination to jointly uphold free trade and multilateralism. (Bullish ★) Minister of Commerce Wang Wentao pointed out that more detailed measures will be introduced in areas such as vigorously boosting consumption, steadily expanding institutional opening-up, actively expanding autonomous opening-up, promoting innovative development of trade, expanding two-way investment cooperation, and high-quality joint construction of the "Belt and Road," along with high-quality compilation of a series of special plans for the commerce sector. (Bullish ★)
Fundamentals: According to SMM statistics, domestic aluminium production in October 2025 (31 days) increased by 1.13 per cent Y-o-Y and 3.52 per cent m-o-m. The traditional peak season continued in October. Although the "October peak season" was somewhat 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, rising 1.4 percentage points m-o-m to 77.7 per cent this month. Based on SMM data on the proportion of liquid aluminium, domestic aluminium casting ingot volume in September decreased by 13.5 per cent Y-o-Y and 2.6 per 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, with extrusion enterprises generally reporting a decrease in orders on hand, and operating rates showing a pullback trend. Last week, China's aluminium extrusion operating rate recorded 52.6 per cent, down 0.9 percentage points w-o-w. Operating performances across other downstream sectors also showed varying degrees of weakness. According to SMM statistics, on Monday this week, primary aluminium ingot inventories in major domestic consumption areas recorded 627,000 tonnes, with an inventory buildup of 5,000 tonnes w-o-w from last Thursday. SMM expects domestic aluminium ingot inventory trends to stabilise with slight increases in the first half of November, operating around 600,000-650,000 tonnes.
Primary aluminium market: SHFE aluminium mainly fluctuated with adjustments in the morning session, hovering around RMB 21,600 per tonne. In east China, spot cargo availability decreased w-o-w, partly due to the widening price spread between futures contracts, which increased traders' position-rolling activities, and partly because suppliers, optimistic about price trends, reduced shipments. Overall, market trading sentiment rebounded on Tuesday this week, with actual transactions at parity to a premium of RMB 10 per tonne against the SMM average price. On Tuesday, the East China market selling sentiment index was 3.02, up 0.04 w-o-w; the purchasing sentiment index was 2.89, up 0.05 w-o-w.
On Tuesday, SMM A00 aluminium closed at RMB 21,620 per tonne, up RMB 130 per tonne from the previous trading day, at a discount of RMB 20 per tonne against the November contract, up RMB 10 per tonne from the previous trading day. In the central China market on Tuesday, suppliers maintained selling sentiment, holding a bullish outlook and releasing goods in small, multiple batches. Downstream enterprises made just-in-time procurement, mainly based on long-term contracts, while trader buyers saw cold trading with few deals. After 9:30 a.m., unilateral dumping occurred, and market transactions continued to weaken. Final actual transaction prices ranged from a discount of RMB 10 per tonne to a premium of RMB 10 per tonne against the central China price. SMM central China closed at RMB 21,510 per tonne, up RMB 130 per tonne from the previous trading day, at a discount of RMB 130 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, flat from the previous trading day.
Recycled aluminium raw materials: On Tuesday, spot primary aluminium prices rose compared to the previous trading day, with SMM A00 spot aluminium closing at RMB 21,620 per tonne. Aluminium scrap market prices followed the upward trend of aluminium prices. As the traditional peak season ended, downstream demand showed clear divergence: demand for scrap used in cast aluminium alloys remained stable, providing more consumption support, while demand for scrap used in wrought aluminium alloys began to show signs of weakening. However, tight market supply remained the main theme, keeping procurement prices high, though the sustainability of these high levels needs further observation. On Tuesday, baled UBC was quoted in a range of 16,350-RMB 16,850 per tonne (ex-tax), and shredded aluminium tensile scrap (priced based on aluminium content) was quoted in a range of RMB 17,800-18,450 per tonne (ex-tax). Baled UBC prices rose RMB 50 per tonne w-o-w, while clean tapping aluminium wire, shredded aluminium tense scrap (priced based on aluminium content), scrap wheel hub, mechanical casting aluminium scrap, and aluminium shavings prices increased RMB 50-150 per tonne w-o-w on Tuesday.
Aluminium spot prices rose on Tuesday, with scrap aluminium prices in Shanghai, Zhejiang, Jiangsu, and Tianjin following suit, increasing by RMB 50-150 per tonne. In terms of the price difference between A00 aluminium and aluminium scrap, the spread for mechanical casting aluminium scrap in Shanghai widened by RMB 130 yuan to RMB 2882 per tonne MoM, while the spread for mixed aluminium extrusion scrap free of paint in Foshan expanded by RMB 120 yuan to RMB 2409 per tonne m-o-m The scrap aluminium market is expected to maintain a strong hold this week, with the mainstream price range for shredded aluminium tense scrap (priced based on aluminium content) potentially shifting up to RMB 17900-18400 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 scrap aluminium 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, which may suppress prices; second, the implementation of environmental protection-driven production restrictions in central China and the potential risk of a pullback after a rapid rise in primary aluminium prices. If these risks materialise, the scrap aluminium market will face pressure to correct. Overall, the future scrap aluminium market will continue to exhibit a complex tug-of-war between sellers and buyers, and 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: In the spot market, SMM A00 aluminium spot prices rose by RMB 130 per tonne to RMB 21620 per tonne on Tuesday; in the secondary aluminium market, ADC12 prices increased by RMB 50 per tonne to RMB 21500 per tonne. Today, as aluminium prices rebounded, the quotations in the secondary aluminium market showed a divergent trend: some enterprises, driven by cost pressure and low inventory, actively followed the increase by RMB 100 per tonne, while others maintained their quotations, mainly due to the suppression of downstream purchase willingness by high prices. Currently, the tight supply of scrap aluminium, coupled with the high prices of auxiliary materials such as copper, provides strong support on the cost side, and ADC12 prices still have upward momentum in the short term. Although there is resilience in end-use consumption, downstream procurement remains cautious given the high aluminium prices. In the short term, ADC12 prices will maintain a strong hold, and subsequent attention should be paid to the improvement in scrap aluminium supply, the effectiveness of relevant policy implementations, and changes in the procurement pace of downstream enterprises.
Summary of the aluminium market: The US suspension of export control penetration rules and Mexico's postponement of its plan to impose tariffs on Chinese goods have, to some extent, eased the external trade environment, which is conducive to boosting the export expectations for aluminium semis and related downstream products. Meanwhile, the Ministry of Commerce has clearly stated that more detailed measures will be introduced to boost consumption and expand openness, indicating that domestic aluminium consumption, especially in key policy-supported areas such as NEVs and green home appliances, has the potential to be further stimulated.
Fundamentally, entering November 2025, winter environmental protection restrictions are expected to affect the operations of individual enterprises, but considering that electrolysis pot production cannot immediately drop to zero after shutdowns, the change in production is expected to be relatively small. Regarding the proportion of liquid aluminium, some enterprises reported that end-user demand is expected to weaken next month, and the proportion of liquid aluminium is projected to pull back, particularly in the second half of November, where expectations for a decline in the proportion of liquid aluminium are strengthening. Currently, aluminium prices are fluctuating at highs, compounded by severe smog in central China, leading to the gradual issuance of environmental protection-driven production restriction policies, which are somewhat suppressing demand.
According to SMM statistics, domestic electrolytic aluminium ingot inventories in major consumption areas recorded 627,000 tonnes this Monday, up 5,000 tonnes w-o-w from last Thursday. SMM expects domestic aluminium ingot inventory trends to stabilise with a slight increase in the first half of November, operating around 600,000-650,000 tonnes. Overall, positive signals from a macro perspective have strengthened market optimism regarding the fundamentals of the aluminium market, with expectations for improved domestic and international demand jointly driving short- to medium-term price increases. However, the emergence of off-season characteristics in demand and marginal inventory buildup will limit the upside room for aluminium prices, and the pattern of short-term high volatility in aluminium prices is expected to persist.
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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