【SHFE Aluminum】

Geopolitical risks overseas have resurfaced, and supply disruptions in the Middle East persist; the ramp-up of idled capacity is expected to be a slow process, limiting incremental supply from abroad. Domestically, operating capacity remains stable due to the "capacity ceiling" policy, leaving little room for significant supply expansion. On the demand side, the traditional peak consumption season has arrived; operating rates at aluminum processing enterprises have rebounded month-on-month, and the destocking of social aluminum ingot inventories has accelerated, indicating that consumption is gradually materializing. However, geopolitical conflicts have driven up energy prices and exacerbated global inflationary pressures. Expectations of a Federal Reserve rate hike in September and anticipated tightening of macro liquidity continue to cap the upside potential for aluminum prices.

Overall, aluminum prices are expected to show a trend of fluctuating with a bullish bias in September, though the upside will likely be limited; the resistance level at 24,800 yuan/tonne warrants close attention.

【Alumina】

The alumina market is expected to continue its pattern of fluctuating at the bottom in September, driven by the ongoing tug-of-war between oversupply and cost support. Supply-side pressure remains high; operating capacity and output have both climbed to historical peaks, and total inventory levels have hit new highs, clearly indicating an intensifying oversupply. Spot prices have fallen close to cash-cost levels in regions like Shanxi, leading to widening losses for producers and fueling expectations of production cuts. On the cost side, disruptions to bauxite shipments from Guinea have re-emerged, and export control policies remain uncertain; combined with high shipping costs, bauxite prices are prone to rising rather than falling, thereby strengthening cost support at the margin.

Overall, alumina prices are expected to fluctuate at the low end of the 2,600–2,800 yuan/tonne range in September, with oversupply capping the upside and cost constraints firming up the downside support. The key factor to watch is whether production cuts among high-cost facilities actually materialize; if the scale of cuts expands—and if the export window opens due to a widening price spread between domestic and international markets—there could be an opportunity for a temporary price rebound. (Source: Market News)

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