Recently, aluminum prices have maintained a high-level oscillating trend, with the coexistence of both bullish and bearish factors in the market. On one hand, the supply disruptions abroad have not completely subsided, and domestic and foreign aluminum inventories are still in the process of being reduced. Coupled with the demand peak season of "September and October" not yet ending, there is still strong practical support for aluminum prices from below. On the other hand, domestic demand recovery has been relatively moderate, and the decline in inventories has narrowed compared to earlier periods. Market expectations for the recovery of supply and the release of new production capacity in the coming year have gradually increased, which has weakened the driving force for the further upward movement of aluminum prices. It is expected that aluminum prices in the fourth quarter will still receive support, but the upward potential will be relatively limited.
The US dollar index remains strong
The external macro pressure has eased somewhat, but the strengthening of the US dollar has limited the upward potential of aluminum prices. In September, the number of non-farm employment in the US increased by only 29,000, significantly lower than market expectations, and the unemployment rate rose to 4.2%. In August, the year-on-year growth rate of core PCE dropped to 3.0%, lower than the previous value and market expectations. Both employment and inflation data weakened, significantly reducing the market's expectations for the Fed's interest rate hike in October.
The CME "Fed Watch" data shows that the probability of the Fed maintaining interest rates unchanged in October is 77.9%, and the probability of maintaining interest rates unchanged in December is 11.4%; the cumulative probability of raising interest rates by 25 basis points is 62.3%, and the cumulative probability of raising interest rates by 50 basis points is 24.3%. Generally speaking, the decline in the interest rate hike expectation is conducive to alleviating the macro pressure faced by the有色金属 market， but the US dollar index remains strong. Recently， it reached 102.53， a阶段性 high since 2025. The decline in the Fed's interest rate hike expectation has a positive impact on aluminum prices， but the strong trend of the US dollar will still limit the recovery space of the有色金属 prices， and the macro layer's support for aluminum prices is relatively limited.
Seasonal performance is under pressure
From historical performance， the increase in aluminum prices during the traditional demand peak season is not a必然 result. Statistics show that the 10-year performance of the main contract of Shanghai Aluminum in October shows that there were 6 years of decline and 4 years of increase， with an average annual return of -0.4% and a median return of -0.55%. Overall， it presents a "more decline than increase" characteristic. From the overall market trend in the fourth quarter， over the past 10 years， there were 6 years of increase and 4 years of decline， with an average annual return close to zero. October is in the latter half of the traditional demand peak season， and as the consumption window of "September and October" approaches the end， aluminum prices will face certain upward pressure. However， as the year approaches the end， market replenishment demand may provide new support for prices. From the seasonal pattern， the probability of aluminum prices being under pressure at the stage is relatively high， but there is still fundamental support from below.
Moderately moderate demand recovery during the peak season
The current demand recovery during the peak season is moderate， but the improvement in demand-side production is limited， and the driving force for the upward movement of aluminum prices is still insufficient. Data shows that in September， the comprehensive production rate of domestic downstream aluminum processing enterprises was 61.2%， an increase of 1.4 percentage points compared with the previous month. The demand recovery in the traditional peak season was relatively moderate. The export end also maintains a certain resilience. In August， the export volume of aluminum products and components was 552，100 tons， a year-on-year increase of 15.31%， and was basically flat compared with the previous month. However， the incremental contribution of foreign demand to the domestic market has weakened.
Overall， the actual realization degree of "September peak season" demand is relatively moderate， and whether the demand in "October" can further improve remains to be observed. At present， there is no obvious super-expected performance in the demand side， and for aluminum prices to further rise， more driving forces are needed.
The pace of inventory reduction has slowed down
The continuous inventory reduction abroad and domestically still provides bottom support for aluminum prices， but the domestic reduction speed has shown a marginal slowdown. The latest data shows that the LME aluminum inventory has dropped to 240,300 tons, the Shanghai Futures Exchange inventory has decreased to 288,700 tons, and the domestic social inventory has fallen to 642,000 tons. All three inventories are in a continuous downward trend. Coupled with the ongoing disruptions in the supply side, they have provided a relatively direct and practical support for the aluminum price.
The domestic social inventory decreased by only 0.9 million tons in the latest week, and the depleting pace was weaker than in previous periods. The slowdown in the depleting slope also indirectly reflects that the digestion capacity of the peak demand is gradually weakening. Low inventories can limit the downward space of the price, but if the depleting speed continues to slow down in the future, the marginal support of inventories on the price will also gradually weaken.
Meanwhile, the aluminum water ratio in China's domestic electrolytic aluminum reached 79.5% in September, up by 0.7 percentage points compared with the previous period. With the relatively stable electrolytic aluminum production, the higher aluminum water ratio will reduce the quantity of aluminum ingots entering the circulation环节， which also promotes the maintenance of the depleting trend of inventories to a certain extent. However， the current aluminum water ratio is already at a relatively high level， and there is limited room for further improvement. Its marginal supporting capacity for aluminum ingot supply has weakened， and the upward elasticity of aluminum prices may thus be restricted.
The supply pressure in the future is gradually emerging
The supply pressure in the future is gradually emerging， which may become an important factor limiting the further rise of the aluminum price. Currently， the supply of aluminum in overseas regions is still affected by geopolitical situations and transportation disruptions， and the tight supply situation has not been fully alleviated. However， from a longer-term perspective， the market's expectations for the resumption of production of some affected overseas production capacity and the release of new production capacity in the coming year are gradually increasing. EGA (United Arab Emirates Global Aluminum Company) publicly disclosed that its AI Taweelah electrolytic aluminum plant plans to resume full production in the first quarter of 2027； the resumption projects and new production capacity in Indonesia， Saudi Arabia， and other regions will also be released successively， and the supply pressure on the global side will significantly increase in 2027. Currently， some institutions have adjusted the supply and demand expectations for the global aluminum market in 2027 to a slight surplus， and the elasticity of the supply in the future is expected to increase， and the resistance to the upward movement of aluminum prices will also increase accordingly.
Overall， there is still support below the aluminum price in the fourth quarter， but the further upward space is relatively limited. As the peak season gradually comes to an end， the running center of the aluminum price may be subject to阶段性 pressure. However， from historical performance， the aluminum market in the fourth quarter has generally performed well. The end-of-year replenishment demand of enterprises and the market's expectations for the peak demand in the coming year may still drive the aluminum price to regain certain support. In the short term， it is necessary to focus on the depleting speed of inventories and the improvement degree of demand， and in the medium term， it is necessary to further observe whether the replenishment efforts can form new support for the price.
