Brent collapses to $91 as US strikes on Iran pause. Aluminium's risk premium deflates ahead of the FOMC.美国暂停对伊打击,Brent 暴跌至 91 美元;FOMC 前铝价风险溢价收缩。

1 · Market Performance

Data LME 3-month aluminum, latest (Friday confirmed close; no fresh print before Monday’s reopen)

• Friday July 24 confirmed close ~$3,165.05/mt, −0.83% d/d (~−$26.50 vs Thursday’s confirmed $3,191.55; TradingEconomics) — still the last confirmed settlement. The daytime session pressed the $3,200 hard cap and was rejected once more, but the week still finished higher — ~+0.9% off Monday’s $3,137.80. Today is Monday; LME reopens in the London session and the SHFE reopens at the morning bell — with no weekend trading, the reopen must digest the oil collapse (below) in one move (pre-reopen).
• Up ~1.7% over the past month and ~+18–20% YoY; the rebound off the early-July four-month low of ~$3,085 has widened, but Friday was rejected again at the top of the range at $3,200. The weekend’s core variable has collapsed: oil fell ~13% off Thursday’s $100+ to ~$91.75 (see below), draining the supply-risk premium — the reopen support should soften materially and tilt toward the low end of the range.
• Structure (est.): the $3,165.05 close sits above MA5 (~$3,155) and MA10 (~$3,120, dropping as the rebound gives back), just below MA20 (~$3,175); still capped by MA30 (~$3,250) and MA60 (~$3,400) — $3,200 is the key pivot, rejected twice this week. With the premium collapsed, the reopen should trade heavy — watch MA10 (~$3,120) and the early-July low $3,085 as support.

View SHFE aluminum, most-traded AL2608, Monday reopen (estimated)

• View With the weekend closure, the sharp oil pullback and LME’s Friday rejection at $3,200, the SHFE most-traded contract likely opens lower/softens Monday, estimated in the 22,900–23,200 band (SMM had AL2608 at 23,075 on July 14 and AL2606 ~23,030 on July 21; lifted with LME’s weekly rebound, likely giving back most of it as the weekend premium collapsed) — restrained by the repeated $3,200 rejection, the fading oil premium, persistent Fed-hike expectations and off-season demand, lagging LME (still “LME outperforms SHFE,” but the premium’s exit pulls both boards down together). Monday’s open is the first pricing window for the weekend oil collapse and the US–Iran talks progress.
• Structure (est.): watch whether it holds MA10 (~23,000)/22,900, resistance 23,300/23,400; a loss of 22,900 refills toward 22,700–22,800. Range ~22,800–23,300.

View Level assessment

• Both boards lifted from low-level consolidation toward the top of the range, then Friday was rejected at the top — and the oil supply-risk premium that drove the rebound collapsed over the weekend, largely dismantling the core bull, so the reopen leans soft.
• SHFE: support MA10 (~23,000) / 22,900; resistance 23,300 then 23,400. The pivot is whether it holds 22,900 rather than refilling toward 22,700–22,800.
• LME: support MA10 (~$3,120) then the early-July low $3,085; resistance the $3,200 hard cap then MA30 (~$3,250). With the premium collapsed the reopen leans soft, testing $3,120 low end; a break opens $3,085.
• Direction hinges on whether the oil collapse keeps the premium suppressed, the dollar (~101.2), hike pricing into the July 28–29 FOMC (decision July 29), and whether the destock defends the base (breaking below 1 Mt to offset the billet build). Monday’s reopen is the first price-confirmation window.

2 · Prices & Related Markets

Data/latest (LME Friday confirmed; no fresh print before Monday’s reopen; some China spot prints lag to July 22–24)

• SMM A00 ingot: ~22,950–23,150 CNY/mt, easing with the reopen ↓ — the destock keeps spot tight, but the oil collapse and the board’s rejection at $3,200 soften quotes; the off-season keeps downstream cautious on chasing, with turnover steady-to-subdued.
• East China premium/discount: mainstream ~−20 CNY/mt discount to parity (vs SHFE 08) ↔ — restocking sentiment may warm slightly after the pullback, with tight spot supporting premiums; turnover steady; East-China destock beat expectations and suppliers held firm (some trades at SMM+10 to +20).
• LME aluminum: Friday $3,165.05 (−0.83%) confirmed, ~+0.9% WoW; the daytime session rejected at $3,200 and the reopen should trade heavy ↓ — the supply-risk premium collapsed, the hard cap turned it back, and the oil retreat weakens the week’s core driver.
• ADC12 (secondary alloy): ≈24,100 CNY/mt, flat ↔ (the Sep contract ~22,980); tight scrap plus a record-wide seasonal spread to primary lend cost support; imported ADC12 offers ~$3,050–3,190/mt.
• Alumina: softness persists ↓; SMM alumina index ~2,720 CNY/mt; four-market weighted ~2,548 CNY/mt; regions broadly easing — the lone laggard, still lowering the cost floor and keeping smelter profit elevated.
• Crude: Brent ~$91.75 (fell ~13% Friday-into-Monday, −6.7% on the day, sharply off Thursday’s $100+) ↓ (WTI ~$87–88) — the collapse came as the US suspended strikes on Iran for a second consecutive night and talks progressed (VP Vance and Secretary Rubio engaged), draining the supply-risk premium; but it remains +24% MoM and the Red Sea/Hormuz situation stays two-sided.
• Dollar index: ~101.2, eased slightly (−0.26% July 27, off the 101.5 July-23 top) ↓ — awaiting the FOMC; still near 15-month highs, broadly bearish for metals.

View

• The destock still underpins spot, with A00 tight but easing alongside the reopen; the off-season and the $3,200 hard cap keep chasing cautious and turnover subdued.
• The week’s core variable — oil — collapsed over the weekend: down ~13% off $100 to ~$91.75 on the US strikes pause (second consecutive night) and US–Iran talks progress, draining the supply-risk premium; the dollar eased only marginally to ~101.2 but stays elevated — the two together lean bearish for metals. On the reopen, the premium’s exit should tilt LME toward the low end of $3,120–$3,200. Alumina remains the persistent laggard.

3 · Inventory

Data/latest

• China aluminum ingot inventory continues to destock: SMM’s major-consumption-area caliber ~1.022 Mt, with draws concentrated in Guangdong and Wuxi; the 1.0 Mt level is in sight. Inventory peaked near 1.465–1.47 Mt in early May (major-area caliber) — a cumulative destock of ~440–450 kt, still trending lower, but weekly withdrawals slowed to ~33 kt (down clearly from the earlier ~170 kt near-four-year single-week high) — destock momentum is fading at the margin. (Calibers differ across SMM series; both trend lower.)
• Billet: major-consumption-area social inventory ~121 kt on July 23, a second straight week of a small build (the first this year); ~24.5 kt below the same period in 2025 and ~10.2 kt below 2024, but ~45.9 kt above 2023. Billet processing fees have kept pulling back from June highs, with φ120 fees in some key regions approaching the cost line — the destock logic has shifted from June’s rapid draws to a destock-to-build transition, an off-season tell worth watching for transmission to ingots.
• Secondary aluminum alloy (foundry alloy) ingot social inventory ~25.9 kt — an 8th straight week of destocking (cumulative ~−37 kt), though the pace has slowed; amid tax-invoice constraints and favorable spot–futures spreads prompting sales.
• LME stocks ~284,000 mt — below the 300 kt line first breached in early July (lowest since 2022), −43% YTD; cancelled warrants elevated. Forecasters peg the 2026 global deficit near ~930 kt.

View

• Accelerating destocking (domestic ingot, secondary and LME all drawing) remains the single most important bullish support and the floor under the board — but with the oil premium collapsing over the weekend, the destock now stands more alone as the dominant support rather than resonating with the supply-risk premium. East-China destock beat expectations and suppliers held firm, with tight spot supporting premiums.
• Absolute domestic ingot inventory is closing on 1 Mt, but weekly withdrawals slowing to ~33 kt and a second straight week of billet buildup plus the high-temperature off-season and more casting ingots keep renewed buildup a live risk; the key tell is whether the next ingot print confirms withdrawals holding pace below the 1 Mt mark, and whether the billet build widens.

4 · Macro Factors

Data/latest

• The disinflation theme and the oil collapse crosscut, and hike expectations persist: June CPI (3.5% YoY, below the 3.8% consensus) and a soft June PPI had cooled hike bets, and the Red Sea/Hormuz conflict briefly drove Brent above $100 as an inflation tail; but the weekend’s ~13% oil collapse to ~$91.75 (US strikes suspended a second night, US–Iran talks progressing) markedly softens that energy-inflation tail — yet the dollar still sits near ~101.2, showing the hike path is not gone. SMM explicitly cites “persistent US Fed rate-hike expectations” capping aluminum’s upside.
• Fed: CME FedWatch (as of July 23–25) — July 28–29 hold the base case (~61–65%), +25bp ~35–39%, with officials divided; the current range is 3.50–3.75% and there is no Summary of Economic Projections at this meeting. The July 28–29 FOMC (decision July 29, 2:00pm ET; Warsh press conference 2:30pm) is this week’s key event — now one day out.

• Dollar index ~101.2, eased slightly (−0.26% July 27) ↓ — awaiting the FOMC; still near 15-month highs, broadly bearish for metals.
• Geopolitics/energy (bull dismantled): the Houthis struck Saudi oil tankers in the Red Sea last week (the carriers Encelia and Layla) and claimed a blockade of Saudi ports; but the US suspended strikes on Iran for a second consecutive night and talks progressed (VP Vance and Secretary Rubio engaged), and Brent fell ~13% off $100 to ~$91.75 — draining the supply-risk premium. Per SMM, the Strait region carries ~9% of global aluminum supply; geopolitics stays two-sided (the situation is fragile and could reverse), but the weekend tilted clearly toward de-escalation.
• Equities/risk sentiment: Big-Tech capex weighed (Alphabet, Tesla softened post-earnings), but the oil collapse eases stagflation worries and helps risk sentiment; watch this week’s mega-cap tech earnings (Microsoft/Meta/Apple/Amazon) and Thursday’s Q2 GDP + June PCE. Gold ~$4,050, bitcoin ~$65–66K.
• China: LPR left unchanged (1Y 3.00% / 5Y 3.50%, a 14th straight month); Q2 GDP +4.3% YoY (slowest since 2022; H1 +4.7%); June exports +27% (a beat), manufacturing PMI 50.3 (expansion); property investment ~−18%, still a drag.

View: impact on aluminum

• Bullish: accelerating destock (major-area ~1.022 Mt, 1 Mt in sight, East China beating expectations); LME stocks ~284 kt, −43% YTD; a prospective H2 deficit (~930 kt global); elevated ex-China premiums; China June exports hot, PMI in expansion, LPR held.
• Bearish: the ~13% oil collapse dismantling the supply-risk premium (US strikes pause, US–Iran talks progress); a still-firm dollar (~101.2); persistent hike expectations (July hike ~35–39%, September elevated) with the July 28–29 FOMC one day out; $3,200 rejected again this week; softer alumina; off-season demand plus a two-week billet build and slowing ingot withdrawals; a weak Q2 GDP with property a drag.
• Net: constructive-floor-but-premium-gone with a softer reopen bias — the destock still underpins the base, but the oil supply-risk premium that drove the week’s rebound collapsed over the weekend and the dollar stays firm, with LME rejected once more at $3,200 (the week still +0.9%), and the July 28–29 FOMC this week’s near-term arbiter. Direction hinges on whether the oil collapse keeps the premium suppressed, whether the destock defends the base (below 1 Mt to offset the billet build), whether $3,200 is regained, and whether a firm dollar and the FOMC turn the macro further against metals. Monday’s reopen is the first pricing window.

5 · Fundamentals

Data: ex-China regional premiums remain elevated (tighter-supply expectations)

• Overseas supply: ex-China restarts/new capacity a medium-term drag (Indonesia/Middle East led); the near-term Red Sea/Hormuz energy-supply risk has eased materially with the oil collapse and US–Iran talks progress — if a ceasefire/talks advance, that risk premium would give back more. Guinea (~40% of global bauxite, ~70% of seaborne exports) is pushing local processing and export curbs — a medium-term bauxite-supply risk. LME stocks <300 kt reinforce the tightness.
• Domestic supply: operating capacity ~45.31 Mt/yr (pressing the 45 Mt policy ceiling; installed ~46.1–46.3 Mt); output near capacity, liquid-aluminum share rising. The market is seen shifting from surplus toward deficit through H2-26 (~930 kt global) — structurally supportive.
• Alumina: operating capacity ~96.2 Mt/yr, utilization ~78%; production growing ~8% (outpacing metal) → surplus pressure, prices easing (SMM index ~2,720, four-market ~2,548) → smelter costs lower, profit elevated, cost support eroding.
• Downstream: high-temperature off-season; leading processor operating rate ~61.3% (−0.6 ppt M-o-M); PV/grid/auto/export supported by an export recovery (June exports +27%), construction/property weak, packaging steady; a two-week billet build and processing fees near the cost line reflect marginally softer off-season processing demand.
• Spot sentiment: East China firmest (~−20 discount to parity, destock beating expectations, suppliers firm, steady turnover, some SMM+10 to +20); Central China softest (persistent −120 to −150 discount); South China subdued/wait-and-see with rising arrivals, constrained by tax-invoice circulation.

View

• Elevated ex-China premiums + accelerating destock (East China beating expectations) + a capacity ceiling and prospective H2 deficit = a genuine floor; but the Red Sea/Hormuz energy-supply risk has eased with the oil collapse and US–Iran talks progress and the premium is giving back, and softer alumina, off-season demand (billet building, fees near cost), a firm dollar, ex-China new capacity and persistent hike expectations are the medium-term drags.
• Price stays a tug-of-war: “destock floor / H2 deficit / ex-China premiums / hot exports vs off-season + billet build + fees near cost + alumina weakness + a firm dollar + persistent hike expectations + a dismantled oil premium + a this-week-rejected $3,200.”

6 · Primary Aluminum Spot Market

Data/latest (some prints lag to July 22–24)

• East China: the better-than-expected destock keeps spot tight and suppliers firm; the reopen pullback may warm restocking sentiment slightly; downstream buying steady-to-subdued; trades ~−20 CNY/mt discount to parity (vs SHFE 08), some at SMM+10 to +20.
• Central China (Henan): high inventory + weak orders keep buyers cautious; persistent discount (~−120 to −150 CNY/mt); suppliers firm on price.
• South China: end-use demand still weak with rising arrivals; overall subdued/wait-and-see, tax-invoice circulation a constraint; destock continuing.

View

• East China held firmest on the better-than-expected destock, and the reopen pullback may warm restocking sentiment slightly; Central China stayed soft and South China subdued with rising arrivals; premiums/discounts swing with the board and arrival pace.
• If destock holds pace below 1 Mt, spot should firm further; but a dismantled oil premium, a firm dollar, off-season demand (billet building, slowing withdrawals) and the this-week-rejected $3,200 cap the near-term upside.

7 · Key Price Drivers

Bullish

• Accelerating destock (SMM major-area ~1.022 Mt, 1 Mt in sight, East China beating expectations; secondary an 8th week of draws; LME stocks ~284 kt, −43% YTD, below 300 kt since early July) — a floor under the board.
• Structural shift toward an H2-26 deficit (~930 kt global); operating capacity at the 45 Mt policy ceiling.
• Elevated ex-China regional premiums (Japan MJP, Europe, US Midwest); Guinea bauxite-supply risk.
• China June exports +27%, PMI in expansion, LPR held; the “LME outperforms SHFE” pattern persists, LME +0.9% on the week.

Bearish

• The ~13% oil collapse dismantling the supply-risk premium — the US suspending strikes on Iran for a second consecutive night and talks progressing knocked Brent off $100 to ~$91.75, weakening the week’s core driver; further de-escalation would give back more of the premium.
• A still-firm dollar (~101.2) — near 15-month highs (eased slightly July 27 but awaiting the FOMC); bearish for metals.
• Persistent hike expectations (July hike ~35–39%, September elevated); the July 28–29 FOMC (decision July 29) one day out — a near-term risk.
• $3,200 hard cap rejected again this week (LME −0.83% Friday) — upside limited until a confirmed break on volume; the reopen leans soft, a loss of $3,120 opens $3,085.
• Alumina easing on fresh supply (SMM index ~2,720, four-market ~2,548) → cost support eroding; off-season demand plus a two-week billet build, fees near cost, weekly withdrawals slowing to ~33 kt, processor rate ~61.3%.
• A weak Q2 GDP (+4.3%) with property investment ~−18%; ex-China restarts/new capacity a medium-term supply pressure.

8 · One-Sentence Market View

9 · Watchlist for the Week (Monday Reopen & Night Sessions)

1. Monday’s SHFE AL2608 reopen (est. ~22,900–23,200): whether it holds 22,900 / MA10 (~23,000), or opens lower and refills toward 22,700–22,800 — the first to price the weekend oil collapse and the US–Iran talks progress.
2. LME 3M (Friday confirmed $3,165.05; rejected at $3,200 this week): can it defend MA10 (~$3,120) on the reopen, or does it test the early-July low $3,085 as the oil premium is dismantled — and can it regain the $3,200 hard cap?
3. Oil & geopolitics (core story): whether the US strikes pause / US–Iran talks (Vance, Rubio engaged) keep advancing, and whether Brent holds above $90 (premium dismantled vs a reignition if the situation reverses); whether the Red Sea Houthis restart strikes.
4. Dollar index (~101.2): whether it extends its slight pullback (easing pressure on metals), or firms again into the FOMC.
5. Fed path & the July 28–29 FOMC: FedWatch July-hold odds (~61–65%) and hike odds (~35–39%); whether the oil collapse softens hike pricing; no SEP, decision July 29 2:00pm ET, Warsh presser 2:30pm.
6. Inventory & spot: whether the next SMM ingot destock print extends and the major-area caliber breaks below 1 Mt; whether the slowing withdrawals and billet build widen; LME stock trend below 284 kt; East (beating expectations)/Central/South China premiums; alumina index (further declines lower the cost floor).
7. Mega-cap tech earnings & US data: how this week’s Microsoft/Meta/Apple/Amazon earnings and Thursday’s Q2 GDP + June PCE spill into risk sentiment and the dollar; follow-through on China property/infrastructure/exports.