Aluminum prices strengthened in October 

Aluminum prices strengthened in October. According to the commodity market analysis system of SunSirs, as of October 31, 2025, the average price of aluminum ingots in East China was 21,293.33 RMB/ton, an increase of 2.70% compared with the average market price of 20,733.33 RMB/ton on October 1.

Aluminum prices had broken through the 21,000 mark, reaching a relatively high level in the past 1-2 years. The price of raw material alumina had fallen from its high level, and the profit per ton of aluminum was in a relatively good position.

Social inventory continued to decline in October

Social inventory decreased. As of October 30th, social inventory in major domestic regions was 605,000 tons, completely consuming the inventory accumulated during the holiday. This was lower than the 614,000 tons on September 25th and lower than the 634,000 tons on October 9th, representing a decrease of 29,000 tons.

A Summary of Positive Factors for Aluminum Ingots in October

Macroeconomic factors:

The Federal Reserve cut interest rates as expected, with Powell making hawkish remarks. On October 30, 2025, the Federal Reserve held an FOMC meeting and decided to cut interest rates by 25 basis points to 3.75% - 4.00% by a vote of 10 to 2. This was the second rate cut this year and the second consecutive rate cut since the rate-cutting cycle began in September. However, after the meeting, Fed Chair Powell made hawkish remarks, dampening the market's previous consensus expectation of a rate cut in December.

The meeting between the Chinese and US leaders proceeded smoothly. A spokesperson stated that the US will suspend its 50% penetration rule on export controls, announced on September 29, for one year. China will suspend its related export control measures announced on October 9 for one year and will study and refine specific plans, largely in line with market expectations.

Disruptions in overseas supply chains:

On October 21, Century Aluminium announced that its Noreurál Grundartangi smelter in Iceland had suspended production due to an electrical equipment malfunction. One of its two electrolytic aluminum production lines was forced to shut down, temporarily reducing production by two-thirds. This led to a reduction in overseas aluminum supply, which provided some support for international aluminum prices and consequently affected the domestic aluminum ingot market.

The peak season for domestic consumption continued:

Domestic consumption remained strong during the peak season, resulting in robust demand for aluminum. Although high aluminum prices somewhat dampened downstream purchasing activity, downstream buyers maintained essential purchases. Demand remained resilient in sectors such as new energy vehicles and new energy cables; for example, passenger car retail penetration reached 57.8% in September, and aluminum rod processing fees in Guangdong remained high at 550 RMB/ton.

Market expectations are positive:

Goldman Sachs and other institutions raised their aluminum price forecasts, believing that China's demand potential is greater after stimulus measures are implemented, and aluminum prices will benefit from China's equipment upgrades and consumer goods trade-in programs.

Market outlook

Recently, the macro sentiment for non-ferrous commodities was relatively strong. Regarding aluminum products, there were disruptions on the overseas supply side. Rio Tinto stated that its Tomago aluminum smelter in New South Wales was considering ceasing operations after its electricity supply contract expired due to continued pressure from high electricity prices. With favorable overseas supply conditions, aluminum ingot prices are likely to rise rather than fall in the short term.

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