Aluminum prices slightly strengthened in October
Aluminum prices slightly strengthened in October. According to the Commodity Market Analysis System of Shengyi Society, as of October 28, 2025, the average price of aluminum ingots in the East China market in China was 21176.67 yuan/ton, an increase of 2.14% from the market average price of 20733.33 yuan/ton on October 1.
The aluminum price has exceeded the 21000 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.
In October, aluminum ingots followed the overall strong operation of non-ferrous metals, which was greatly affected by macro factors to a certain extent.
The recent positive news is as follows:
Macro policies and favorable trade relations:
According to data released by the National Bureau of Statistics, China’s GDP grew by 5.2% year-on-year in the first three quarters and 4.8% year-on-year in the third quarter, supporting market confidence with a positive macroeconomic outlook. In addition, as agreed by both China and the United States, they will hold economic and trade consultations in Malaysia from October 24th to 27th, which has eased the trade tension and had a positive impact on the macro sentiment of the aluminum ingot market.
Continuous inventory depletion:
As of October 27th, the social inventory in mainstream areas of China was 616000 tons, which basically consumed the accumulated inventory during holidays, approaching 614000 tons on September 25th, and 18000 tons were destocked compared to 634000 tons on October 9th.
Overseas supply side disturbance:
Century Aluminum announced on October 21st that its Noreur รก l Grundatangi smelter in Iceland has suspended production due to electrical equipment failures. One of its two electrolytic aluminum production lines has been forced to shut down, temporarily reducing production by two-thirds. This has led to a decrease in overseas aluminum supply, providing some support for international aluminum prices and affecting the domestic aluminum ingot market.
The domestic consumption peak season continues:
The domestic consumption peak season continues, and the demand for aluminum is performing well. Although the high price of aluminum has somewhat suppressed the enthusiasm of downstream procurement, downstream still maintains rigid demand procurement. Among them, the demand resilience of new energy vehicles, new energy cables and other fields is strong. For example, in September, the retail penetration rate of passenger cars was 57.8%, and the aluminum rod processing fee in Guangdong remained at a high level of 550 yuan/ton.
LME inventory decline:
LME inventory has continued to decline slightly in the past two months, dropping to 478000 as of October 23, indicating a tight supply of overseas spot goods, which has also provided some support for aluminum prices.
Overview of October Fundamentals
Supply side
Overall stable production capacity: The operating capacity is 44.165 million tons, which is in a high stable state. The newly added production capacity (280000 tons to be started in Xinjiang) is basically offset by the reduced production (400000 tons in Qinghai Zhonglv and 4.31 million tons in Shandong Weiqiao), and has little impact on supply.
The proportion of direct supply of aluminum water has increased: Northern aluminum enterprises have been affected by the peak demand season downstream, resulting in an increase in the proportion of direct supply of aluminum water, which has led to a low production of aluminum ingots and reduced the supply of spot aluminum ingots in the market, supporting aluminum prices.
Weak cost support: The price of alumina has declined, with a market price of 3030 yuan/ton in Guangxi. Pre baked anodes remain stable at 5055 yuan/ton, while thermal coal has slightly rebounded. Overall cost support is weak, which to some extent affects the production profit and supply enthusiasm of enterprises.
In terms of demand
The overall operating rate has fluctuated: this week, the operating rate of leading domestic aluminum downstream processing enterprises recorded an average of 62.5% compared to last week, a decrease of 1.4 percentage points compared to the same period last year. Among them, the operating rate of primary aluminum alloy has rebounded to 58.4%, and it is expected that the operating rate will continue to be stable and approach the high point of the year in the latter half of the year; The operating rate of leading aluminum sheet and strip enterprises has remained stable at 68%, but some enterprises are expected to gradually decline due to off-season expectations and the impact of Trump tariffs; The operating rate of the aluminum cable industry remains at 64%, and it may continue to be weak and stable in the short term; The operating rate of the aluminum profile industry has slightly decreased to 53.5%, and it is expected that the short-term operating rate of profiles will remain stable but slightly weak; The operating rate of leading aluminum foil enterprises remains stable at 72.3%, but weak terminal demand may lead to a decline in operating rate; The operating rate of leading recycled aluminum enterprises has slightly decreased to 58.6%, and it is expected that the industry’s operating rate will continue to decline slightly in October.
There is a clear differentiation in demand: demand resilience is strong in areas such as new energy vehicles and new energy cables, while demand in the building materials sector is weak. The inventory of aluminum bars in Foshan is 62100 tons, which continues to accumulate.
Stay tuned for the future market
Under the expectation of interest rate cuts by the Federal Reserve, the macro sentiment of non-ferrous commodities is relatively strong, and aluminum prices are prone to rise but difficult to fall in the short term.
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