China's aluminum market on August 5, 2026 found itself navigating a sharp tension between macro-driven bullish momentum and underwhelming physical demand conditions, according to Mysteel's daily price assessment. Mysteel reported that the benchmark A00 aluminum grade, with a minimum purity of 99.7%, was priced at Yuan 23,680 per tonne in China's national market, down Yuan 40 from the prior session. South China quoted at Yuan 23,800 per tonne, a decline of Yuan 30, while the Central Plains region registered Yuan 23,540 per tonne, off Yuan 10 on the day.
The macro backdrop provided significant support to aluminum prices during the week. A weaker-than-expected ADP employment report for July, showing a gain of just 44,000 jobs — a year-to-date low — prompted financial markets to scale back expectations of a September rate hike by the Federal Reserve. This drove the US dollar index lower alongside declining US real yields, creating a favorable environment for dollar-denominated industrial metals such as aluminum.
According to Mysteel, the resulting rally was led by LME aluminum and subsequently echoed across SHFE aluminum contracts. The combination of unwinding rate-hike bets, a softer dollar, lower inventory financing costs, and renewed risk appetite among funds drove a meaningful valuation recovery in the metal. Market participants were also positioning ahead of Friday's nonfarm payrolls release, anticipating continued labor-market softness and limited scope for further Fed tightening, which amplified the macro-driven surge in aluminum prices over the course of the week.
On the Shanghai Futures Exchange, the most-traded September aluminum contract edged up 0.25% during Wednesday's daytime session and gained a further 0.29% overnight, closing the nighttime session at Yuan 23,835 per tonne as of 1 a.m. Thursday, August 6, 2026. Despite the macro tailwinds, fundamental conditions remained comparatively soft.
Seasonal inventory builds were noted but largely overshadowed by prevailing macro sentiment. In the Central China market, traders' inventories were trending lower, hovering around 190,000 tonnes. Holders slowed their sales pace to prop up prices amid a strengthening basis, tightening spot availability.
Quotations were reported at premiums of Yuan 10 to 20 per tonne over the SHFE front-month contract. In the South China market, spot transactions in the early-to-mid session settled mostly at a Yuan 10 per tonne discount to the exchange benchmark before recovering to parity later in the day. The South China basis for A00 aluminum remained firm at a premium of Yuan 80 per tonne over the SHFE front-month contract, maintaining the well-established "strong south, weak north" pricing pattern.
Mysteel noted that with the delivery deadline for current long-term pricing contracts approaching, traders actively sourced material on price dips, improving liquidity in intermediary trade. Downstream factories maintained essential procurement needs, while buyers in Central China showed increased interest in purchasing on dips. Despite the relatively subdued downstream demand, overall transaction volumes in both regions were described as acceptable.
Source: Mysteel, August 6, 2026.
Source: mysteel.net