Aluminium decouples from crude as LME clears $3,200 at $3,225.80. Brent falls, and the bearish Hormuz read is overturned in one session.铝价与原油脱钩,LME 收于 3,225.80 美元突破 3,200 美元;Brent 下跌,霍尔木兹利空逻辑一日即被推翻。

1 · Market Performance

Data — the single most important fact of August 3 is the decoupling

• LME 3M aluminum (August 3): $3,225.80/mt, +0.98%; month +3.68%, year +25.78% (TradingEconomics caliber, page updated August 4).
• That close clears, on a closing basis, the $3,200 cap that had failed four times. It is the first close above that level in this move.
• Conflicting caliber: a separate vendor puts August 3 LME at $3,206.10 with a $3,194.65 low. Both carried, neither adopted.
• On the same day and the same headline, Brent fell about 4.6% to just over $83 (TradingEconomics August 3 caliber $83.69, −4.82%), recovering to $84.19, +0.51%, on August 4; month +16.95%, year +24.47%.
• View Aluminum and crude moved in opposite directions on identical news — a first for this cycle. Yesterday this brief booked the Hormuz clause into the centre of gravity as a structural bearish variable; the market answered the other way inside one session. This is not noise, and the reason is set out with sources in sections 4 and 5 — crude prices the option on flow restarting, aluminum prices the physical return of Gulf capacity, and that return is gated by insurance and by mine clearance.

Data — Chinese spot fell across the board on August 3, opposite to LME

• All six quoted SMM regions fell 130–140 yuan: Shanghai A00 23,500 (23,490–23,510, −130); Foshan/Nanhai 23,610 (23,590–23,630, −130); Wuxi 23,470 (23,460–23,480, −130); Hangzhou 23,520 (23,510–23,530, −130); Chongqing 23,490 (23,470–23,510, −140); Central China/Zhongyuan 23,330 (23,320–23,340, −140).
• View Six regions down 130–140 with the Foshan-over-Shanghai spread steady at 110 yuan means the decline was uniform, not structural. A uniform fall points at the futures board or a nationwide shift in sentiment, not at a regional supply-demand imbalance.

Data and reconstruction — the SHFE caliber, which must be kept strictly separate

• The SMM quote page showed the SHFE most-traded contract at 23,730, +145 (+0.61%), at the time of the August 4 fetch.
• This brief’s reconstruction — not an exchange print 23,730 ÷ (1 + 0.61%) implies a base near 23,585. This brief reads that as an August 3 day-session close of roughly 23,585, with 23,730 the August 3 night / August 4 early caliber. Explicitly labeled as reconstruction: no official SHFE August 3 settlement sheet could be obtained at the time of writing.
• Conflicting caliber: an AlCircle press release published August 3 carries SHFE 2609 at 23,625 with open interest −5,189 lots — inconsistent with both 23,630 (July 31) and the 23,585 reconstruction. Carried openly.
• Carried (July 31 confirmed): AL2609 open 23,650, high 23,760, low 23,620, close 23,630, settlement 23,665; +45 on settlement (+0.19%) or +5 on close (+0.02%); volume 139,957 lots; open interest 247,263.

Carried — moving averages (July 30 vendor caliber, now four sessions stale)

• SHFE: MA5 23,587.56, MA10 23,462.56, MA20 23,346.68, MA40 23,297.85, MA60 23,371.70.
• LME: MA5 $3,178.34, MA10 $3,172.71, MA20 $3,182.56 — $3,225.80 is clearly above all three, about +1.36% over MA20.
• (Four sessions stale. The SHFE side of this set has essentially no remaining value; the LME side still supports the qualitative “above all three” call because price has moved so far above it.)

View Level assessment

• LME: from “capped at the range top” to “first confirmation window after a breakout.” The four-times-failed $3,200 cap has been cleared on a closing basis and should technically invert from resistance to support. But it must be said in the same breath that $3,225.80 is now close to the $3,250 ceiling of SMM’s own published week range — on the data provider’s own caliber, LME now sits on the ceiling side of the range rather than the floor side, and the easy part of this move is behind it.
• SHFE: still oscillating inside the rebound’s high range; no breakout confirmed. If 23,730 is a night-session caliber, it sits inside the 35-yuan window between 23,725 (July 30 night high) and 23,760 (July 31 day high) — meaning a fifth test is in progress, not a completed breakout.
• Support hierarchy, re-ordered: SHFE near-term at the reconstructed 23,585 where MA5 (~23,588) coincides, then 23,500; LME near-term at $3,200, whose character today is a first retest of former resistance — more informative than any moving average.
• The internal-versus-external split is today’s defining feature: LME broke its range top while all six Chinese spot regions fell 130–140. Against the existing 7.4 ratio and roughly 3,300-yuan import loss, the immediate consequence is further compression of the Shanghai-London ratio (interpretation).

2 · Prices & Related Markets

Data — spot is a new August 3 print; futures and alumina are July 31 carried forward

• SMM A00 / Shanghai spot ingot: 23,500 CNY/mt, −130 ↓
• Regional spot (all August 3): Foshan/Nanhai 23,610 (−130) ↓; Wuxi 23,470 (−130) ↓; Hangzhou 23,520 (−130) ↓; Chongqing 23,490 (−140) ↓; Central China 23,330 (−140) ↓.
• Spot basis (this brief’s own computation): A00 23,500 is a 230-yuan discount to the current 23,730 board quote, and an 85-yuan discount to the reconstructed 23,585 August 3 close. (Labeled interpretation; not SMM’s official front-month basis.)
• Foshan-over-Shanghai spread: 110 yuan (23,610 − 23,500), unchanged from the prior caliber. Central-China-under-Shanghai: −170 yuan, the weakest region nationally.
• LME aluminum: $3,225.80, +0.98% ↑; month +3.68%, year +25.78%. Conflicting caliber $3,206.10, low $3,194.65.
• LME stocks: 271,275 mt (July 24), lowest since records began January 1998 ↓; on-warrant 245,350 mt (lowest since April 2025). No update for a tenth consecutive trading day. A separate caliber reports a further fall to 267,800 mt in late July, described as the lowest this century; both carried.
• SHFE aluminum warehouse stocks: 448,742 mt (July 27–31 weekly), −6,350 w/w ↓; Henan +14,010 the sole builder. A third-party caliber of 455,092 mt is also carried.
• China social ingot inventory: 953 kt (July 30) ↓; billet 119.5 kt (July 30) ↓. SMM’s Monday August 3 inventory print could not be obtained at the time of writing.
• ADC12 (July 31 carried): national average 24,200 CNY/mt, unchanged ↔; East, South, Southwest and Northeast all 24,200. A380 26,100, AlSi9Cu3 25,100, A356 24,100, A360 24,250, ZLD102 23,750, ZLD104 23,850 — all unchanged ↔.
• Alumina futures (July 31 carried): AO2609 close 2,621 (−27), low 2,618 a new low for the move; open interest 242,811 (−6,081) ↓. No confirmed August 3 print.
• Alumina spot (July 31 carried): SMM alumina index 2,706.65 (−0.71) ↓; Guizhou 2,775, Henan 2,750, Shanxi 2,740, Shandong 2,725, Guangxi 2,635 — all regional quotes unchanged.
• SHFE alumina warehouse stocks: 372,008 mt, +4,289 w/w ↑.
• Crude: Brent $84.19 (August 4), +0.51% ↑; August 3 $83.69, −4.82%; month +16.95%, year +24.47%.
• Dollar index: 99.9580 (August 4), flat on the day (−0.0050) ↔; past month −0.89%, past 12 months +1.19%. A rebound of roughly 0.5% from the 99.4474 print carried in yesterday’s brief.

Data — ex-China regional premium structure (July 24 industry caliber, first inclusion in this brief)

• US Midwest premium: broke $2,000/t in January and subsequently traded above $2,400; all-in US delivered cost regularly exceeds $5,500/t.
• Japan CIF premium: +127% q/q in early 2026.

View

• The core of this section today is that two price systems are moving in opposite directions. Ex-China: LME through $3,200, stocks at the lowest on record, regional premiums at extremes (US Midwest above $2,400, Japan CIF +127% q/q). In China: six spot regions down 130–140, Central China at 23,330. This is not one market hesitating; it is two markets pricing two different things — supply abroad, demand at home.
• The Foshan spread holding at 110 yuan deserves separate emphasis: last week it widened 50 yuan to 115 on a collapse in arrivals, and in this nationwide decline it did not widen further. That means August 3’s fall carried no new regional supply information — it was a nationwide, uniform pullback driven by sentiment or the board (interpretation).
• Alumina’s futures-spot divergence enters a fourth session at the 2,618 low with no new print. The roughly 85-yuan gap between the 2,706.65 spot index and 2,621 futures remains unresolved and undirected.

3 · Inventory

Data — no new August 3 print; the following is carried

• China ingot: 953 kt (July 30 SMM weekly), −53 kt versus July 23, and −512 kt (−35%) from the early-May high of 1,465 kt.
• Weekly warehouse withdrawals: 127,700 mt (prior week 137,400 mt; June peaked at 170,000 mt, a four-year seasonal high). Two consecutive weekly declines, with the rate of decline widening.
• Regional structure: Foshan withdrew 30,400 mt, the only region to buck the decline; East and Central China described as sluggish transactions with falling outflows.
• Annual comparison: cumulative destocking magnitude 35% in 2026, against 26% in 2024 and 30% in 2025.
• Billet: 119.5 kt (July 30).
• SHFE aluminum: 448,742 mt, −6,350 w/w; Jiangsu −11,261, Guangdong −5,297, Shandong −1,485, Shanghai −1,051, Zhejiang 0, Henan +14,010.
• SHFE alumina: 372,008 mt, +4,289 w/w (Xinjiang +5,096, Guangxi +3,308, Shandong −1,800).
• Bonded (July 30): Shanghai 83.4 kt, Guangdong 30.0 kt, total 113.4 kt, +20 kt w/w ↑.
• National alumina inventory: 7.028 Mt (July 30), +24 kt w/w ↑.
• LME: 271,275 mt (July 24), on-warrant 245,350 mt. Tenth session without update. Alternative caliber 267,800 mt (late July), described as lowest this century.

View Inventory’s direction call splits in two today

• Ex-China stocks: clearly supportive, and more so today than yesterday. 271,275 mt is less than a day of global consumption; on-warrant 245,350 mt is the lowest since April 2025; and it has been reported that most of the remainder is Russian metal — available but not necessarily tradeable for every buyer. On the day LME cleared $3,200, this moves from background variable to direct explanatory variable.
• China stocks: support is weakening and its character is unchanged. SMM has itself characterized the current destock as the passive “upstream lacking volume” type and warned that “once shipments recover, the destocking slope may quickly flatten”; withdrawals falling two weeks running to 127,700 mt is the direct evidence.
• Combining the two gives this section’s conclusion: inventory support for aluminum currently comes from outside China, not inside it. That is fully consistent with — and mutually corroborating of — the price structure in section 1, where LME rose and Chinese spot fell (interpretation).
• Bonded +20 kt on the week and Henan’s +14,010 single-week build are unchanged, and still point at relocation rather than consumption.

4 · Macro

Data — August 3 geopolitics: the clause degraded within 24 hours

• Iran’s foreign ministry said on August 3 that there are currently no negotiations with the United States.
• What actually exists is a discussion between Tehran and Muscat over management of the Strait, in its “final stages,” covering a TEMPORARY middle route to ensure maritime safety.
• Foreign Minister Abbas Araghchi’s framing: an understanding on “a route acceptable to both sides — neither the northern route nor the southern route — but one that respects the sovereign rights of both sides and safeguards our national interests and security.”
• The decisive physical detail: that middle passage has reportedly been MINED and would require clearing before regular use.
• Current state of the Strait: still largely closed, with minimal vessel traffic running transponders; ships use either a northern route near Iranian shores with permission, or a southern route near Omani waters.
• Trump insisted on August 3 that talks are underway and, in a Truth Social post, called Iran’s leaders “unbelievably duplicitous” and accused them of lying about peace talks; his position remains that any deal keeps Hormuz permanently open, while Iran insists any arrangement preserves its sovereign control.
• Timeline context: the conflict began February 28, 2026; a ceasefire deal was reached in June 2026.

Data — both PMIs landed, and they point opposite ways

• US July ISM manufacturing PMI: 55.6, up 2.3 points from June’s 53.3, the highest since May 2022 (55.9), the seventh consecutive month of expansion, against a 54.0 consensus. New Orders 56.7 versus 56.0 in June, also a seventh straight expansion after four contractionary readings.
• RatingDog/Caixin China July manufacturing PMI: 49.2 (June 50.5, consensus 50.3), back into contraction; output contracting marginally, a fresh fall in total sales, and a steeper decline in new export orders.
• View Caixin’s 49.2 matches the NBS 49.2 exactly, giving a two-caliber confirmation. Yesterday this brief wrote that “if today’s Caixin caliber also breaks below 50 it becomes a two-caliber confirmation” — that condition is now met. China’s manufacturing contraction is no longer a single-sample question.

Data — dollar and rates

• US dollar index 99.9580 (August 4), flat on the day (−0.0050); past month −0.89%, past 12 months +1.19%. A rebound of about 0.5% from August 3’s 99.4474, back near 100.
• The July 29 FOMC held at 3.50%–3.75% in a 9–3 vote, with three officials preferring a hike.
• The September caliber conflict has escalated from a magnitude problem to a DIRECTION problem: yesterday’s three carried calibers were all hike probabilities (76.9%, 63%, about 55%); a separate CME FedWatch caliber dated July 28 instead shows a 54.4% probability of a 25bp cut at a September 16 meeting. The sign itself is in dispute, so no rate figure is used today.

View Direction call

• Geopolitics: retreats from yesterday’s “structural bearish” call to “an unverified claim.” Yesterday this brief booked the clause into the centre of gravity; today it must be acknowledged that the weight came too early — Iran directly denies that US-Iran talks exist, the only real discussion is with Oman over a “temporary” middle route, and that route has reportedly been mined. The net effect on aluminum is revised from clearly bearish to mildly bullish, because it removes yesterday’s bearish premise without introducing a new bullish one.
• Dollar: from mildly bullish yesterday to mildly bearish today. The 99.4474 → 99.9580 rebound is about half a percent, and its driver (ISM 55.6) is a durable fundamental input rather than one day’s noise.
• US data: clearly bearish. ISM 55.6 is the highest since May 2022, with new orders at 56.7 far above consensus. That combination points directly at stronger US growth and a higher rate path, which is a valuation headwind for dollar-priced commodities.
• China data: clearly bearish, now confirmed on two calibers. Caixin 49.2 = NBS 49.2, with new export orders falling faster — the direct analogue of the extraordinarily weak 23.2 wire-and-cable export-orders reading in July’s processing PMI.
• Net: today’s macro mix is more complex than yesterday’s, not clearer. The bearish input on the geopolitical side was withdrawn (bullish), while the bearish inputs from US data and the dollar strengthened (bearish) and the bearish input from Chinese demand gained a second confirming caliber (bearish). The result is not direction; it is divergence — the ex-China supply narrative strengthened while the China demand narrative weakened.

5 · Fundamentals

Data — the Gulf: today’s new cost quantification is the key to understanding the aluminum-crude decoupling

• War-risk marine insurance trajectory (industry caliber): about 0.25% of hull value before February 2026; about 3% by early July; 3–10% by mid-July. On a $100 million vessel that takes a single transit from $250,000 to more than $7 million.
• View This is the most important piece of mechanical evidence in today’s brief. A “temporary route” announcement does not reset an insurance market, and it certainly does not clear mines. Crude could fall 4.6% on the announcement because crude prices the option on flow restarting; aluminum rose instead because aluminum prices the physical return of Gulf capacity, and that is gated by insurance rates and by mine clearance. Yesterday this brief overweighted the announcement and underweighted the physical gate; today’s revision follows from that.
• Gulf scale (new caliber): Gulf output 6.16 Mt, roughly 8% of world production (this brief previously carried about 9%; both are shown); more than 80% is exported.
• 2026 industry-wide losses: 3–3.5 Mt, about 5% of global supply.
• Alba: Lines 1, 2 and 3 (~311,000 mt/yr, 19% of capacity) in controlled shutdown on Hormuz transit disruption, with force majeure declared; transit-driven rather than damage-driven, so the restart condition is logistics, not engineering.
• EGA: Al Taweelah repair progress ahead of schedule, with 89 of 1,262 pots operating as of July 2; the alumina refinery restarted in July after a three-and-a-half-month outage, produced 2.4 Mt in 2025 covering 46% of EGA’s needs, and is expected back at full capacity by year-end. But EGA states explicitly that a full return to pre-crisis shipment volumes depends on the Strait reopening; it is currently routing through Sohar in Oman and Fujairah in the UAE, then moving inland by truck.
• Quantified return potential: roughly 700,000 mt (third-party estimate).
• July ex-China daily average output +1.6% m/m (first monthly recovery since the March strikes), total still −6.7% y/y; Slovalco 75,000 mt in Q4, Magnitude 7 Metals 75,000 mt/yr by end-2026, Balco 168,000 mt in FY27 Q2 (+17% y/y), Alcoa 636,000 mt in Q2 (+5% q/q), Rio Tinto raising Kitimat and NZAS.

Data — domestic supply and cost (carried)

• China’s July average tax-inclusive full cost +0.9% m/m and −1.7% y/y; per-tonne margin narrowed 1,146 yuan to 6,999 yuan/mt, average profit +56.8% y/y.
• Built capacity about 46.29 Mt/yr (flat m/m), operating capacity about 45.31 Mt/yr; July output +1.6% y/y and +3.5% m/m; liquid aluminum ratio 78.3% (+1.1 pt), August forecast 78.5% (+0.2); ingot casting −15.1% y/y and −1.4% m/m.
• View At a 6,999 yuan/mt margin there is no incentive to cut output anywhere, so cost is not a constraint on domestic supply. In today’s divergence narrative the domestic supply side is the neutral-to-bearish party: it neither contracts nor expands out of control.

Data — alumina (carried)

• AO2609 down three straight sessions to 2,621 (low 2,618) with three straight sessions of position reduction; SMM alumina index 2,706.65 (−0.71) with all regional spot unchanged; SHFE warrants +4,289 w/w; national alumina inventory 7.028 Mt, +24 kt w/w; Guangxi ramping; EGA’s Al Taweelah refinery restarted.
• Four new domestic projects come online successively in 2026, adding 8.6 Mt of capacity and taking national total capacity to 118.92 Mt; the industry operating rate is around 81%, an unambiguous oversupply.

Data — downstream demand (carried)

• July aluminium processing PMI 42.2%, −4.4 pt m/m, with all seven sub-sectors contracting: foil 39.0 (production and new orders both 31.8), secondary alloy 37.6, construction extrusion 39.7, industrial extrusion 42.1, primary alloy 43.9, wire and cable 44.4 (production 36.4, −21.1 pt; export orders 23.2, −23.8 pt), plate/sheet/strip 44.8. SMM expects most sub-sectors to stay below 50 in August.
• PV is one of the few bright spots: module output rises from 38.5 GW in July to 39.3 GW in August, with frame demand underpinning steady operations.
• Leading downstream operating rate 60.2% (July 30 caliber), −0.9 pt m/m.
• Spot transaction sentiment: weak, wait-and-see; all six regions fell 130–140 on August 3 with no sign of concentrated downstream restocking.

Data — industry news (August 3)

• SMM visited Vietnam’s VPG Group, covering bauxite resource development, alumina project progress and Southeast Asian regional logistics; Vietnam is shifting from “investment destination” to “supply chain partner,” with its solar-related aluminum product export growth exceeding 20%.

6 · Primary Aluminum Spot Market

Data — the following is the latest August 3 caliber

• Overall: all six quoted regions fell 130–140 yuan together — the broadest single-day domestic spot pullback in this brief’s recent record.
• East China: Shanghai 23,500 (−130, range 23,490–23,510), Wuxi 23,470 (−130), Hangzhou 23,520 (−130). Basis is a 230-yuan discount to the current 23,730 board quote and an 85-yuan discount to the reconstructed 23,585 close (own computation).
• South China: Nanhai/Foshan 23,610 (−130, range 23,590–23,630), a 110-yuan spread over Shanghai, unchanged from the prior caliber. Foshan remains the only region whose withdrawals rose last week (30,400 mt), so rigid demand there is relatively the strongest.
• Central China: Zhongyuan 23,330 (−140, range 23,320–23,340), a 170-yuan discount to Shanghai and the weakest region nationally.
• Southwest: Chongqing 23,490 (−140).
• Secondary (July 31 carried): ADC12 national average 24,200 (0), all four major regions unchanged; A380 26,100, AlSi9Cu3 25,100, A356 24,100, A360 24,250, ZLD102 23,750, ZLD104 23,850, all unchanged; Japanese imports $3,040–3,100, general imports CIF $3,040–3,160, midpoints unchanged.

Data — sentiment indices (latest available is the July 29 SMM caliber, stale)

• East China: shipment willingness 3.16 (+0.08); purchasing willingness 3.00 (unchanged).
• Central China: shipment willingness 3.12 (+0.01); purchasing willingness 2.82 (−0.04).
• A July 28 caliber is also carried: East China shipment 3.13, purchasing 2.94; Central China shipment 3.1, purchasing 2.9.

View Shipment and purchasing willingness

• Shipment willingness: firm. Six regions falling 130–140 together is itself the result of holders selling into the price; with the board (23,730) well above spot (23,500) at a 230-yuan discount, the incentive both to deliver against the board and to sell down is strengthening.
• Purchasing willingness: weak, but today opens an observation point that needs verifying. Spot has already fallen 130 to 23,500 while LME rose over the same window — if downstream buyers genuinely want to restock on dips, August 4 should show it in spot transactions and withdrawals. Yesterday this brief argued that a fast board decline was the only near-term path to falsifying the low-flow balance; spot has now fallen ahead of the board, so that test window is open.
• Central China at 23,330, a 170-yuan discount to Shanghai, is the weakest national reading and is consistent with construction extrusion at 39.7 in July’s processing PMI (interpretation).

7 · Key Price Drivers

Bullish

• The Hormuz clause degraded within 24 hours, removing yesterday’s central bearish premise: Iran’s foreign ministry stated plainly on August 3 that no negotiations with the United States currently exist; what exists is a discussion with Oman over a “temporary” middle route; Araghchi insists on “neither the northern route nor the southern route”; Trump called Iran’s leaders “unbelievably duplicitous.”
• The physical gate has not opened, and it is now quantified: the middle passage has reportedly been mined and requires clearing; the Strait remains largely closed with minimal transponder traffic; war-risk insurance has gone from 0.25% to 3–10% of hull value, taking a single transit from $250,000 to more than $7 million; EGA is still trucking inland from Sohar and Fujairah and states that pre-crisis shipment volumes depend on the Strait reopening.
• LME cleared the four-times-failed $3,200 cap on a closing basis: $3,225.80, +0.98%, month +3.68%, year +25.78% — and it did so on a day Brent fell 4.6%, which is the ex-China market’s explicit rejection of the reopening trade.
• Ex-China stocks at the lowest on record: LME 271,275 mt (July 24, lowest since January 1998), on-warrant 245,350 mt (lowest since April 2025, with most of the remainder reported to be Russian metal); an alternative caliber of 267,800 mt is described as the lowest this century; the total is less than one day of global consumption.
• Ex-China regional premiums at extremes: US Midwest broke $2,000 in January and has traded above $2,400, with all-in US delivered cost regularly above $5,500/t; Japan’s CIF premium rose 127% q/q in early 2026.
• China’s destock continues: 953 kt (July 30), −35% from the May high, a larger magnitude than 2024’s 26% or 2025’s 30%.

Bearish

• Today’s most important new bearish input: US July ISM manufacturing at 55.6, the highest since May 2022. Up 2.3 points against a 54.0 consensus, with new orders at 56.7 in a seventh straight month of expansion. This supports a higher rate path and a stronger dollar directly.
• The dollar index rebounded and is back near 100: 99.9580 (August 4), about +0.5% from August 3’s 99.4474; +1.19% over 12 months.
• China’s demand contraction is confirmed on two calibers: RatingDog/Caixin July manufacturing PMI 49.2 (June 50.5, consensus 50.3), exactly matching the NBS 49.2; output contracting, a fresh fall in total sales, and a steeper decline in new export orders.
• All six Chinese spot regions fell 130–140: Shanghai 23,500, Foshan 23,610, Wuxi 23,470, Hangzhou 23,520, Chongqing 23,490, Central China 23,330, with Central China’s discount to Shanghai widening to 170.
• The structural demand evidence is unchanged: July processing PMI 42.2% with all seven sub-sectors contracting (wire and cable export orders 23.2, −23.8 pt); leading downstream operating rate 60.2%, −0.9 pt.
• The destock is passive and its slope is flattening: SMM characterizes it as “upstream lacking volume” and warns that “once shipments recover, the destocking slope may quickly flatten”; weekly withdrawals of 127,700 mt are down two weeks running (prior week 137,400 mt, June peak 170,000 mt).
• Overseas supply recovery has moved from expectation to measurement: July ex-China daily average output +1.6% m/m, the first monthly recovery since March; EGA ahead of schedule; simultaneous increments from Slovalco, Magnitude 7, Balco, Alcoa and Rio Tinto.
• Position itself is a constraint: $3,225.80 is close to the $3,250 ceiling of SMM’s week range, not the $3,100 floor; there is no cost-side support (per-tonne margin still 6,999 yuan); and alumina adds 8.6 Mt of new 2026 capacity against an industry operating rate of about 81%, an unambiguous surplus.

8 · One-Sentence Market View

9 · Watchlist for Today’s Day and Night Sessions

1. The first test of $3,200 as former-resistance-turned-support (the single top item): $3,225.80 is the first close above a level that failed four times, but a breakout is only validated on the retest. If price falls back below $3,200 and closes there, August 3’s gain should be read as a one-day emotional response to the mining report; if $3,200 holds, the breakout stands and $3,250 — SMM’s week ceiling — is next.
2. The fifth test of SHFE’s 23,725–23,760 window: the current 23,730 quote sits inside it. Watch for a close above 23,760 on rising volume; another failure makes it five, and the internal-external divergence widens further. Below, the reconstructed 23,585 coincides with MA5 (~23,588), then 23,500.
3. Physical evidence on Hormuz, not statements: only three falsifiable things matter today — whether mine-clearing operations are started or announced, whether war-risk insurance quotes retreat from the 3–10% band, and whether the count of transponder-running transits recovers. Any one of those improving is a genuine structural bearish input; an Iran-Oman route text without any of the three does not constitute a return of aluminum supply.
4. Whether the dollar index holds 100, and the aftershock of ISM: 99.9580 is already about +0.5% off August 3, driven by ISM at 55.6, the highest since May 2022. Further dollar strength through 100 would pressure the quality of LME’s breakout from the valuation side; watch also whether the September Fed direction conflict (hike at 76.9%/63%/55% against a 54.4% cut caliber) converges.
5. Whether Chinese spot stabilizes at 23,500, and which way the basis repairs: spot has fallen 130 ahead of the board and now sits at a 230-yuan discount to the 23,730 quote. This is the dip-restocking test flagged yesterday — if A00 stops falling, the discount narrows and withdrawals pick up on August 4, downstream buyers are genuinely there on dips; if spot keeps following the board down with the discount intact, weak domestic demand has entered a self-fulfilling price phase.
6. SMM’s weekly inventory print (the Monday August 3 caliber could not be obtained at the time of writing): watch whether 953 kt keeps falling and, more importantly, whether weekly withdrawals stop their two-week slide (127,700 mt, prior week 137,400 mt). Withdrawals stabilizing matters more than the headline stock falling further — the former is a demand signal, the latter is currently a supply signal.
7. How the alumina futures-spot divergence resolves: AO2609 has sat at 2,621 with a 2,618 low for four sessions without a new print, while the spot index at 2,706.65 has not moved, leaving a roughly 85-yuan gap. Watch whether spot catches down or futures rebound through 2,650; with 8.6 Mt of new 2026 capacity against an ~81% industry operating rate, the surplus direction is unchanged.