Aluminum prices first strong and then weak in September
In September, aluminum prices first strengthened and then weakened. According to the Commodity Market Analysis System of Shengyi Society, as of September 30, 2025, the average price of aluminum ingots in the East China market in China was 20733.33 yuan/ton, an increase of 0.47% compared to the market average price of 20636.67 yuan/ton on September 1.
The aluminum price has exceeded the 20000 mark and is at a relatively high level in the past 1-2 years. The price of raw material alumina has fallen from its high level, and the profit per ton of aluminum is currently in a relatively good position.
The decline in aluminum prices in September was mainly due to the weakening of the cost side. The trading logic of aluminum prices in October may continue, with an overall trend of “stabilizing first and then strengthening” with a strong oscillation. At the beginning of the month, it was suppressed by import supplements and demand wait-and-see measures. In the middle of the month, it may gradually rise with the acceleration of inventory depletion and cost increases, and the price center of gravity will further shift upward compared to September.
Fundamental forecast for October
Supply side:
The domestic operating capacity is above 44 million tons, approaching the policy ceiling of 45 million tons, and there was no significant release of new investment capacity in October. The electricity price for electrolytic aluminum enterprises in Yunnan region has been officially raised by 0.12 yuan/kWh. From the supply side, although the resumption of electrolytic aluminum production in Yunnan has been basically completed, with 545000 tons of the planned production capacity of 565000 tons restored, the increase in electricity prices still has a certain impact on enterprise production, which in turn affects the supply of aluminum ingots.
Import shock: The Shanghai London ratio fell to 7.1, opening the import window, and there are expectations of an increase in Russian aluminum imports in October.
Changes in aluminum structure: The proportion of aluminum water direct alloying has increased to 73.9%, and the proportion of aluminum ingot delivery products is less than 27%, highlighting the phenomenon of “shortage of ingots” in spot goods.
Demand side:
New energy vehicles: In the sprint stage of the peak production and sales season, Xiaomi and Huawei have increased the volume of new models, with a single vehicle using 220kg of aluminum, which is expected to bring more than 80000 tons of demand increment. This is a core positive for aluminum prices and effectively drives the demand for casting aluminum alloys.
Home appliances: The “trade in” policy will continue until the end of the year. Although the peak season for air conditioning domestic sales has ended, export growth has played a role in supporting basic demand, and aluminum profile procurement remains stable.
Power grid: Ultra high voltage projects have entered a construction peak, with an expected increase in aluminum demand in October compared to the previous month, providing mid-term support for aluminum prices, and the landing of orders is accelerating.
Real estate: The year-on-year decline in completed housing area has narrowed, and the construction of Baojiao buildings has driven the recovery of aluminum used in building materials, reducing the drag on aluminum prices and showing a marginal improvement trend.
Photovoltaics: The decline in installed capacity compared to the first half of the year has narrowed, and the rebound in module exports has driven demand for aluminum for frames. Overall, this has a neutral to bullish impact on aluminum prices, and the gap is gradually being repaired.
Cost side:
The environmental protection policies in the north restrict the release of production capacity in the roasting process, and the domestic centralized maintenance and production of new production capacity form a hedge. The pressure of oversupply may be weaker than previously expected, and the price of alumina support will operate at more than 2900 yuan/ton.
Macro factors:
Macro policies have a bottom line. Domestic planning is expected to strengthen confidence in infrastructure investment, and there is a high probability that the Federal Reserve will maintain stable interest rates in October. The rebound in risk appetite is favorable for non-ferrous metals.
Market observation indicators for the future
1. Weekly social inventory of aluminum ingots (pay attention to whether it falls below 600000 tons);
2. Weekly production of new energy vehicles (to determine the intensity of demand fulfillment);
3. The arrival volume of Guinea bauxite at the port (tracking changes on the cost side);
4. Shanghai London ratio and primary aluminum import profit (evaluating import impact).
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