Key economic data points for the aluminum market were released. In the spot market, SMM data shows East China A00 aluminum was quoted at 24,160 yuan/ton, up 20 yuan/ton from the prior session, with a spot premium of 20 yuan/ton, down 10 yuan/ton. Central Plains A00 aluminum was 24,090 yuan/ton with a discount of 50 yuan/ton, unchanged. Foshan A00 aluminum rose 40 yuan/ton to 24,360 yuan/ton, with its premium increasing by 10 yuan/ton to 220 yuan/ton.

In futures, the Shanghai aluminum main contract opened at 24,120 yuan/ton on 2026-09-16 and closed at 24,180 yuan/ton, up 140 yuan/ton from the previous close. The day's trading range saw a high of 24,195 yuan/ton and a low of 24,075 yuan/ton. Total trading volume reached 105,834 lots with open interest at 157,057 lots.

Regarding inventories, as of 2026-09-16, SMM data indicated that social inventories of electrolytic aluminum ingots stood at 776,000 tons, a decrease of 20,000 tons from the prior period. Warrant inventories fell by 6,802 tons to 195,220 tons, while LME aluminum inventories were unchanged at 243,600 tons.

In the alumina segment, SMM spot prices for 2026-09-16 showed Shanxi at 2,700 yuan/ton, Shandong at 2,675 yuan/ton, Henan at 2,710 yuan/ton, Guangxi at 2,605 yuan/ton, and Guizhou at 2,750 yuan/ton. The Australian alumina FOB price was recorded at $349/ton. The alumina main futures contract opened at 2,677 yuan/ton and settled at 2,688 yuan/ton, unchanged from the previous close. It traded between a high of 2,699 yuan/ton and a low of 2,675 yuan/ton, with volume of 102,477 lots and open interest of 230,870 lots.

For aluminum alloys, Baotai's procurement price for civilian recycled aluminum was 18,200 yuan/ton and 18,400 yuan/ton for mechanical recycled aluminum, both up 100 yuan/ton from the prior day. The ADC12 quote increased by 200 yuan/ton to 23,800 yuan/ton. Social inventories of aluminum alloy were 19,700 tons with in-plant inventories at 68,000 tons. The theoretical total cost was 23,903 yuan/ton, yielding a theoretical profit of 98 yuan/ton.

Where the market is headed

Turning to electrolytic aluminum, the Fed's rate hike has been delivered, but the subsequent hawkish commentary is likely to exert pressure on commodity prices. Aluminum has shown relative resilience for a couple of reasons: trading volume and volatility are currently subdued, and the market is supported by strong fundamentals, including sustained inventory drawdowns and expectations of peak consumption season demand. As prices have corrected, there are signs that aluminum billet inventories are shifting back into a destocking cycle, with spot premiums strengthening. On a micro level, the market is caught between short-term supply tightness and long-term oversupply expectations. While the pace of inventory decline is moderating, LME premiums are moving significantly higher.

In the long run, overseas smelter restarts and new capacity additions point to potential oversupply, although the specific timing remains difficult to predict. For instance, Century Aluminum's new project in the US has faced delays due to public opposition, highlighting the uncertainties surrounding overseas projects. This could create phases of supply-demand mismatch, potentially pushing absolute inventory levels to relatively low points. For buyers, it may be prudent to look for hedging opportunities once the current selling pressure subsides.

Examining the alumina outlook

In the alumina market, spot trading prices domestically remain weak, and overseas prices have retreated from recent highs. The export loss is widening, making it unlikely that exports can alleviate domestic supply pressure in the near term. The oversupply situation persists domestically, with social inventories continuing to accumulate.

However, rising crude oil prices are pushing up input costs, providing clear and solid support from the cost side. Freight rates are also climbing, and Guinea's shipping volumes have been impacted again by higher costs. At this point, it is reasonably clear that the bottom for bauxite prices has been established. Alumina is expected to maintain a range-bound trading pattern. Earlier, prices traded at a premium to spot due to coal-related factors, but this has since corrected and resolved.

Key risk factors to monitor

Investors should keep an eye on several potential risks: unexpected disruptions from overseas policy changes, shifts in liquidity conditions that deviate from forecasts, and new disturbances to overseas ore supply.