Aluminum prices strengthened slightly in October
Aluminum prices strengthened slightly in October. According to the SunSirs commodity market analysis system, as of October 28, 2025, the average price of domestic aluminum ingots in East China was 21,176.67 RMB/ton, up 2.14% from the average price of 20,733.33 RMB/ton on October 1.
Aluminum prices had broken through the 21,000 RMB/ton mark, reaching a relatively high level in the past one to two years. Raw material alumina prices had fallen from their highs, and the profit margin per ton of aluminum was relatively good.
Aluminum ingot prices in October followed the overall stronger performance of non-ferrous metals, which was significantly influenced by macroeconomic factors.
Recent positive factors included:
Positive macroeconomic policies and trade relations:
Data released by the National Bureau of Statistics showed that China's GDP grew by 5.2% year-on-year in the first three quarters and by 4.8% year-on-year in the third quarter. The positive macroeconomic outlook bolstered market confidence. Furthermore, the US and China agreed to hold trade consultations in Malaysia from October 24 to 27, easing trade tensions and positively impacting sentiment in the aluminum ingot market.
Inventory continued to decline:
As of October 27, domestic inventories in major regions stood at 616,000 tons, essentially consuming accumulated inventory from the holiday holiday. This figure was close to the 614,000 tons on September 25, and down 18,000 tons from the 634,000 tons on October 9.
Overseas Supply Disruption:
Century Aluminum Company announced on October 21st that its Noreurál Grundartangi smelter in Iceland had suspended production due to an electrical equipment failure. One of its two electrolytic aluminum production lines was forced to shut down, temporarily reducing output by two-thirds. This reduced overseas aluminum supply, providing some support to international aluminum prices and, in turn, impacting the domestic aluminum ingot market.
Domestic consumption peak season continued:
The domestic consumption peak season continued, and aluminum demand was performing well. Although high aluminum prices had dampened downstream purchasing enthusiasm, downstream purchases remained based on essential needs. Demand in new energy vehicles and new energy cables remained resilient. For example, the retail penetration rate for passenger cars reached 57.8% in September, and aluminum rod processing fees in Guangdong remained high at 550 RMB/ton.
LME stocks fell:
LME inventories have been declining slightly for nearly two months, falling to 478,000 tons as of October 23, indicating that overseas spot supply was tight, which also provided some support for aluminum prices.
October Fundamentals Overview
Supply side
The overall production capacity was stable: the operating capacity was 44.165 million tons, which was in a high and stable state. The new production capacity (280,000 tons in Xinjiang to be started) and the production cuts (Qinghai Chalco to reduce 400,000 tons, Shandong Weichai to reduce 4.31 million tons) basically offset each other, and had little impact on supply.
The proportion of direct supply of molten aluminum increased: Affected by the peak season of downstream demand, the direct supply ratio of molten aluminum by northern aluminum companies had increased, resulting in the production of aluminum ingots remaining at a low level, reducing the supply of spot aluminum ingots in the market and supporting aluminum prices.
Cost support was weak: alumina prices were declining, with the market price in Guangxi at 3,030 RMB/ton, prebaked anodes remaining stable at 5,055 RMB/ton, and thermal coal prices rising slightly. Overall cost support was weak, which to a certain extent affected the production profits and supply enthusiasm of enterprises.
Demand side
Overall operating rates saw mixed results: This week, the operating rate of leading domestic downstream aluminum processing companies remained stable at 62.5%, down 1.4 percentage points from the same period last year. The operating rate of primary aluminum alloys rebounded to 58.4%, and is expected to remain stable in the second half of the month, approaching its highest level for the year. The operating rate of leading aluminum sheet and strip companies remained stable at 68%, but some companies are expected to see a gradual decline due to the expected off-season and the impact of Trump's tariffs. The operating rate of the aluminum cable industry remained at 64%, and is expected to remain weak and stable in the short term. The operating rate of the aluminum profile industry fell slightly to 53.5%, and is expected to remain stable but slightly weak in the short term. The operating rate of leading aluminum foil companies remained stable at 72.3%, but weak end-user demand may lead to a decline in the operating rate. The operating rate of leading recycled aluminum companies fell slightly to 58.6%, and the industry's operating rate is expected to continue to decline slightly in October.
There was a clear differentiation on the demand side: demand in new energy vehicles, new energy cables and other fields was resilient, while demand in the building materials field was weak. Foshan's aluminum bar inventory was 62,100 tons and continued to accumulate.
Market outlook
Amid expectations of a Fed rate cut, macro sentiment for non-ferrous commodities is relatively stronger, and aluminum prices are likely to rise rather than fall in the short term.
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