On March 23rd, 2026. the domestic aluminum market experienced a significant pullback, and the traditional “gold, silver, and four” consumption peak season expectations were completely shattered. The market was severely tested by the “weak peak season”, and spot and futures prices simultaneously weakened, leading to a significant cooling of bullish sentiment.

Futures and spot prices have fallen together, with key prices falling one after another

On that day, the main contract of Shanghai Aluminum fell sharply during the trading session, once falling below the integer mark of 23300 yuan/ton, with a daily decline exceeding 1.4%, highlighting the weak pattern of the market. At the same time, the average spot price of domestic aluminum ingots has synchronously declined, falling below the key psychological price of 24000 yuan/ton. The market has a strong wait-and-see sentiment, and the trading atmosphere remains light.

High inventory combined with weak demand, supply and demand contradiction becomes the core constraint

The core root cause of the current weakening of the aluminum market lies in the serious imbalance between supply and demand. The social inventory of domestic aluminum ingots has risen to 1.339 million tons, setting a new high in nearly five years, and the huge inventory continues to suppress the upward space of prices. However, the downstream consumer side continues to perform weakly, and the traditional peak season demand release falls short of expectations. The strong contrast between high inventory and weak demand has become the core factor dragging down aluminum prices.

Multiple macro pressures, the strengthening of the US dollar suppresses the non-ferrous sector

The macro environment also has a negative impact on the aluminum market. The recent escalation of tensions between the United States and Iran has driven up international crude oil prices and intensified market inflation concerns; As a result, the expectation of the Federal Reserve cutting interest rates has been further postponed until the end of the third quarter or even the fourth quarter. The strengthening of the US dollar index continues to pressure non-ferrous metal varieties priced in US dollars, and the aluminum market cannot escape the overall drag of the sector.

Fundamental internal and external differentiation, domestic pressure, overseas production reduction and destocking

The fundamentals of the global aluminum market show a significant pattern of internal and external differentiation. On the overseas front, the Middle East conflict continues to escalate, with multiple overseas aluminum companies such as Qatar Aluminum and Bahrain Aluminum experiencing substantial production cuts, with a cumulative reduction of over one million tons. LME aluminum inventories continue to deplete to 433000 tons, indicating a significant tightening trend in overseas supply.

On the other hand, in China, the pressure of high inventory has not been resolved, and downstream processing enterprises have been severely squeezed by the fluctuation of aluminum prices, resulting in a severe squeeze on profit margins and a sustained low willingness to purchase. The acceptance rate of orders from waste recycling enterprises has dropped to freezing point, only maintaining the pace of essential procurement. The scrap aluminum market is affected by the “reverse invoicing” policy, and the supply of circulating goods continues to be tight. The mainstream range of broken raw aluminum (water price) fluctuates weakly around 20200-20800 yuan/ton (excluding tax), and there is no obvious sign of recovery at present.

Switching trading logic, recession expectations replacing geopolitical premiums

At present, the trading focus of the aluminum market has undergone a significant shift, from simply speculating on geopolitical risk premiums to gradually trading expectations of a global economic recession. High oil prices, while exacerbating inflationary pressures, have also raised concerns in the market about a slowdown in global economic growth. Capital risk appetite has significantly cooled, and the aluminum market will continue to face multiple pressure tests in the short term.