SHFE closes above its 60-day average for the first time in the rebound. China's social inventory erases last week's build at 933kt.沪铝本轮反弹首次收于 60 日均线上方;中国社会库存回落至 93.3 万吨,抹去上周累库。

1 · Market Performance

Confirmed: on August 6 SHFE reclaimed MA60 and held it — the first close above the 60-day in this rebound

• SHFE AL2609 (August 6): open 23,785, range 23,740–23,905, close 23,835, +70 (+0.29%) against the previous settlement price.
• Caliber note: the +70 is measured against the previous SETTLEMENT, not the previous close. Against the August 5 close of 23,745, the gain is +90. Both are carried; neither is adopted as sole truth.
• Moving averages: MA5 23,740, MA10 23,542, MA30 23,191.33, MA60 23,741.
• Position: the close is above all four. The margin over MA60 is 94.00 yuan, and the intraday high of 23,905 sat 164 yuan above it.
• This is the first close above the 60-day in this entire rebound. August 5 was a pierce and a surrender; August 6 was a pierce and a hold.
• The offsetting fact must be given alongside it: MA60 fell from 23,759.17 to 23,741, a decline of 18.17 in one session, faster than the 13.75 of the session before. Roughly a fifth of the 94-yuan margin was donated by the average rather than earned by the price.
• MACD: DIF 93.4473 above DEA −3.5285, red histogram 193.9515. Note that DEA is now within 3.53 of zero.
• The stated core trading range was RAISED from 23,500–24,000 to 23,500–24,100. Raising a core range is the cleanest available admission that the prior range no longer contains the market.
• Volume and open interest: no August 6 caliber appears in the sources consulted. The last confirmed print remains July 30 (267,105 lots, open interest 253,776, +2,341), now five sessions stale, and is not quoted as current data.

Confirmed: LME on August 6 — two calibers carried, and one of them internally inconsistent

• Caliber one (SMM / AlCircle): LME 3M open $3,245, range $3,233–3,256, close $3,253.00, +0.22%. MA5 $3,227.70, MA10 $3,199.45, MA30 $3,164.40, MA60 $3,349.41; MACD DIF −6.0545 above DEA −25.1982, red histogram 38.2874. Core range RAISED from $3,150–3,300 to $3,200–3,350.
• The internal inconsistency: a stated +0.22% against a $3,253.00 close implies a prior reference of about $3,245.86, which cannot be reconciled with the same source’s own August 5 close of $3,211.00 — a discrepancy of about $35. It is recorded, not resolved.
• Caliber two (TradingEconomics): August 6 at $3,269.45, +19.80 (+0.61%) against a previous close of $3,249.65; month +4.09%, year +25.32%; Q3 forecast $3,231.49, 12-month forecast $3,421.47.
• The two August 6 calibers differ by $16.45, about 0.5% — narrowed from $38.65 (about 1.2%) on August 5.
• LME sits $96.41 below MA60 ($3,349.41), about −2.88%, materially repaired from −4.3% but still beneath the line.

Interpretation: the two boards have now diverged in character

• Yesterday’s falsifiable claim was that MA60 was falling about 13.75 yuan per session and would therefore meet price in the next session even if price did nothing, so the rebound was about to be decided. The answer is: reclaimed and held. A line surrendered on Wednesday was kept on Thursday, and that is the most substantive technical state change of this rebound.
• Two qualifications belong with it, not one. First, about 18 of the 94-yuan margin came from the average’s own descent. Second, a single +70/+90 session is not trend confirmation — the confirmation is whether the FIRST retest of 23,741 holds.
• The two boards have diverged in character: SHFE is above MA60 and therefore in genuine medium-term repair; LME is still 2.88% below its own and therefore in a downtrend that is converging but unbroken. They were both below the line until yesterday; that divergence is itself new information.
• The most under-weighted fact in this section is that both core ranges were raised in the same session (SHFE’s ceiling +100 yuan, LME’s floor and ceiling each +$50). A raised range means the producing analysts have redefined what was resistance as the middle of the operating band.
• Support: SHFE’s first support is the level it just reclaimed — MA60 at 23,741 — which coincides almost exactly with MA5 (23,740) and the August 6 low (23,740). Three references stacked on one price make this the cleanest single verification level of the cycle; beneath it are MA10 (23,542) and the core-range floor at 23,500.
• Resistance: SHFE’s is the August 6 high of 23,905, then the raised core-range top at 24,100 and 24,150. LME’s is the August 6 high of $3,256 and the TE caliber of $3,269.45, above which MA60 ($3,349.41) and the raised core-range top ($3,350) are numerically almost identical — the hardest price band on the LME chart.

2 · Aluminum Prices and Related Markets

Confirmed: the board rose and spot fell — leadership changed hands for a second straight session

• SMM A00 / Shanghai spot aluminum ingot: 23,690 yuan/mt, −40 ↓.
• Board versus spot: the board +70 (settlement) or +90 (close), spot −40. The spot-to-board spread widened by roughly 110–130 yuan in one session.
• East China premium/discount: SMM’s August 6 spot review records quotes at a discount of 10 to parity; a separate caliber records main transactions at a premium of 8–30 through to a discount of 8–10 against the August contract. Both are carried.
• Central China: a discount of 190–210 against the August contract with a firming trend, widened from 170–200.
• South China: the structural premium centre has risen 60–100 yuan/mt versus the same period in prior years.
• LME aluminum: $3,253.00 (+0.22%, SMM caliber) ↑ / $3,269.45 (+0.61%, TradingEconomics caliber) ↑. Both calibers point the same way today.
• China aluminum ingot social inventory: 933,000 mt, down 25,000 mt from the 958,000 mt carried since August 3 ↓ (bullish).
• LME stocks: 271,275 mt (July 24) with 245,350 mt on-warrant, alongside the 267,800 mt alternative caliber (“lowest this century”). A thirteenth consecutive session without an update.
• Alumina futures: AO2609 close 2,621 (July 31, carried). No confirmed new print for August 4–6.
• Alumina, overseas: 30,000 mt transacted at $356/mt FOB East Australia for September loading on August 5.
• ADC12: a 24,050 yuan/mt caliber exists but its date is uncertain; it is not quoted as a current print ⊘.
• Crude: Brent $83.46 (August 7), +0.97 (+1.18%) ↑; month +6.98%, year +25.34%; Q3 forecast $90.26. WTI back above $78 after gaining almost 3% in the prior session.
• US dollar index: 99.972 (August 7), +0.0150 (+0.02%) ↑; month −1.01%, year +1.83%; Q3 forecast 99.614. Edged up off the seven-week low but remains in that area.

Interpretation

• The core fact in this section is divergence, not the rally. August 5: spot +230, board +20. August 6: board +70/+90, spot −40. Leadership has changed hands twice in two sessions.
• The correct reading is neither “physical confirmed the board” nor “the board dragged physical” — it is that neither side is leading, and the two are alternating around a centre that is rising on its own. Single-session attribution carries very little information in that structure and should be weighted down.
• What is actually carrying the move is inventory: 933,000 mt against 958,000 mt. Last week’s +5,000 mt build — the first accumulation of the cycle — was erased at five times its own size. See Section 3.
• Crude and the dollar both rose today and point in opposite directions for aluminum: crude’s gain is the direct expression of the Strait premium being restored (supportive of aluminum’s scarcity pricing), while the dollar’s bounce off a seven-week low is a mild valuation-side headwind (bearish). That is today’s internal macro hedge, and it runs exactly opposite to yesterday’s, which was crude bearish and dollar bullish.
• Alumina still carries no domestic print; the only new data point is the $356/mt FOB East Australia trade, which does not revise the domestic cost curve and is not a current marginal driver.

3 · Inventory

Confirmed: last week’s build was erased, and at five times its own size

• SMM China aluminum ingot social inventory: 933,000 mt. The same source records it as both “down 25,000 mt month-on-month” and “down 20,000 mt week-on-week.”
• Arithmetic check: against the 958,000 mt carried since August 3 the difference is −25,000 mt. Both figures are recorded in parallel and are not netted.
• Why it matters: last week’s print was +5,000 mt, the first build of the cycle, and this brief made it the central pillar of the bearish column for three consecutive sessions. This week’s −25,000 mt is five times its size.
• SMM is explicit alongside it: the pace of destocking has SLOWED as the price centre moved up.
• China’s cast aluminum alloy ingot social inventory destocked for a tenth consecutive week, but the pace slowed sharply to a drop of just 200 mt.
• July’s average weekly drawdown of 54,800 mt remains the highest for that period in three years (SMM caliber, carried).
• SMM outlook (carried): social inventory could fall below 800,000 mt in H2 2026.
• LME: 271,275 mt (July 24), on-warrant 245,350 mt; alternative caliber 267,800 mt. A thirteenth consecutive session without an update.
• SHFE cast aluminum alloy warrants (August 3, carried): 17,553 mt, −118 mt.
• National alumina inventory 7.028 Mt (+24,000 mt w/w); port bauxite 940,000 mt (both carried).

Interpretation: what was erased is not the trend, it is one of this brief’s own judgments

• A correction belongs at the top of this section: for three consecutive sessions this brief called last week’s +5,000 mt build “the turn of the cycle.” This week’s evidence does not support that label. A +5,000 mt build that is covered by −25,000 mt the following week is better classified as noise inside an intact destocking trend.
• The offsetting restraint is equally important: SMM’s own framing is that destocking has SLOWED, not accelerated. 933,000 mt is a marked improvement on last week, but the pace is still short of July’s 54,800 mt weekly average. The cast alloy series says it more plainly — a tenth week of destocking, but only 200 mt of it, which is close to a standstill.
• The accurate conclusion is therefore in three parts: **the trend has not turned (bullish); the slope has flattened (neutral-to-bearish); and single-week moves in a weekly series should not be assigned trend meaning (a methodological correction).**
• The mechanism of the drawdown remains on the supply side, not demand: July’s liquid-aluminum proportion rose more than expected and August is expected to edge up further, which means fewer ingots are being cast. That is the real reason ingot inventory is falling and it is not the same thing as improving consumption. Consistent with this, the downstream processing operating rate has fallen to 60.1% (Section 5).
• Nothing new overseas: LME stocks have now stood on the July 24 caliber for thirteen consecutive sessions. Their “lowest this century” character holds, but their force as current evidence continues to decay and they should not be re-counted as a fresh bullish item each day.

4 · Macro Factors

Confirmed: August 6 geopolitics — the deal advanced and the terms retreated in the same session

• Bloomberg, August 6: **“Iran Says Deal With Oman on Hormuz Ships Agreed in Principle.”**
• But Iranian Deputy Foreign Minister Kazem Gharibabadi cautioned that the agreement **would not mean the full reopening of the sea lane.**
• Tehran insists that **the United States is not a party to its deal with Oman.**
• An Iranian parliamentary committee is reviewing a preliminary bill that would **bar US, Israeli and other “hostile” vessels from transiting the Strait, with fines of up to 20% of a ship’s cargo value for violations, and restrictions extending to “countries and individuals that have caused damage to Iran” until that harm is “compensated.”** The legislation remains under expert review, with specialists invited to submit recommendations before the draft is finalised; it is reported as a separate track from the Iran–Oman negotiations.
• The United States **rejected any “impediments” to navigation.**
• Two explosions were heard on Qeshm Island on Thursday night. IRGC-affiliated Tasnim reported they were caused by Iranian operations against “hostile targets” at the entrance to the Strait.
• Tehran’s stated position is unchanged: **the Strait would only be fully reopened once the US maritime blockade is lifted.**

Confirmed: the energy market’s immediate adjudication

• Brent: $83.46 (August 7), +0.97 (+1.18%); month +6.98%, year +25.34%.
• WTI: back above $78 after gaining almost 3% in the prior session.
• For comparison: on August 5, WTI was near $75 and down 11% across three sessions. A material part of the deal pricing has already been taken back.

Confirmed: dollar, rates, and tonight’s data

• US dollar index 99.972 (August 7), +0.0150 (+0.02%); month −1.01%, year +1.83%; Q3 forecast 99.614. It edged up off the seven-week low but remains in that area, with the narrative citing Middle East developments weighed against caution before the jobs report.
• Fed Governor Cook indicated preparedness for rate increases if the “disinflation trend does not resume.”
• The Fed held at 3.50–3.75% on July 29 on a 9–3 vote, described as its most divided since 2016.
• July nonfarm payrolls: **released August 7 at 08:30 ET (20:30 Beijing); consensus roughly +80,000 to +83,000 with a FactSet projection of +97,500, after +57,000; unemployment expected at 4.2%.**
• CME FedWatch: no August 6 caliber appears in the sources consulted. The August 4 caliber (61.9% for a 25bp hike) and the July 28 caliber (54.4% for a September cut) are carried in parallel and point in opposite directions; no rate figure is adopted.

Interpretation: today’s most important structural judgment

• On the logic this brief has applied for three sessions, “agreed in principle” should have been the largest single bearish event of the cycle. Every term that accompanied it in the same session points the other way, so the event’s net direction has to be reclassified.
• It is worth stating plainly: **the market discounted a reopening.** What has been agreed in principle is a bilateral traffic-management arrangement between two coastal states — one of which states explicitly that it does not constitute a reopening, from which the principal counterparty is absent by that same party’s insistence, and alongside which that state’s own legislature is drafting a statutory ban on that counterparty’s shipping. These are not the same instrument.
• The inference follows directly: **an agreement whose own signatory says it does not reopen the waterway cannot deliver the supply normalisation that June’s roughly 11% give-back was paid for.** The June 17 framework moved LME from $3,854 to $3,418 only because the market believed the lane would actually open.
• Crude’s adjudication is today’s most valuable confirmation. WTI gave up 11% across three sessions to price the deal, then took back nearly 3% in one session and reclaimed $78. Oil has the most direct exposure to the Strait and the least aluminum-specific noise; its recovery is the market pricing “agreed in principle ≠ reopened.”
• The two physical preconditions this brief has tracked — mine clearing actually beginning and the US naval blockade actually lifting — **remain unmet, and Thursday night added a third adverse fact by putting live fire back at the Strait’s entrance.**
• The dollar: mildly bearish for aluminum today. At 99.972 it has bounced off the seven-week low, and yesterday’s framing of it as “the cleanest bullish item” no longer holds.
• Net: the macro mix moves from yesterday’s “geopolitical bearishness deepening, dollar bullishness strengthening” to **“the bearish geopolitical outcome has been falsified in its expected form, the dollar’s bullish contribution has been withdrawn, and crude’s recovery confirms that scarcity pricing has not been released.” The direction turns from bearish to bullish — but the reason is not a new bullish item; it is that a bearish item already counted failed to arrive in the form in which it was counted.
• Tonight’s payrolls is the only scheduled event and outweighs the entire aluminum-specific calendar. With Cook already on record and the July decision a 9–3 split, a strong print is the clean bearish risk and a weak print the clean bullish one.

5 · Fundamentals

Confirmed: domestic demand — the first new operating-rate print in two weeks, and it is lower

• China’s aluminum processing (downstream) operating rate: **60.1% and declining.** Down 1.0 percentage point from the 61.1% week-of-July-25 caliber carried for two weeks.
• Framing: downstream purchasing sentiment remains soft, with off-season demand weakness evident.

Confirmed: domestic supply and the liquid-aluminum ratio

• China’s operating capacity was 45.31 Mt as of June 2026; existing built capacity was approximately **46.29 Mt as of end-July.**
• July’s increase in the liquid-aluminum proportion **exceeded expectations, and August is expected to edge up further.**
• A structural shift in South China pricing: molten-aluminum conversion has lifted the South China premium centre by 60–100 yuan/mt versus the same period in prior years; Chongqing runs at 100% local molten-aluminum digestion and Guangxi at 88%; SMM describes tradable commodity ingot supply as entering structural contraction.

Carried: overseas supply (no update)

• July ex-China output −6.7% y/y, daily average +1.6% m/m.
• SMM’s 2026 ex-China commissioned operating capacity estimate 2.32 Mt (raised 67.8% from 1.38 Mt).
• Indonesia’s 2026 operating capacity about 2.51 Mt; India’s Balco continues ramping in August; Slovalco restarts in Q4; a Missouri smelter restarts by year-end; Alcoa cut its output guidance on Australian refinery issues; EGA Al Taweelah 89 of 1,262 pots restarted as of July 2.

Carried: downstream sub-sectors and alumina (two weeks stale)

• Sub-sector operating rates (week of July 25): extrusion 52.9%, primary alloy 59.0%, secondary aluminum 50.8%, wire and cable 63.6%, plate/sheet/strip 69.4%, foil 70.9%.
• June plate/sheet exports +44% y/y and foil exports +23.8% y/y; PV module scheduled output rising from 38.5 GW in July to 39.3 GW in August, with PV frame demand underpinning steady operations.
• China July manufacturing PMI: both NBS and Caixin at 49.2.
• Alumina: AO2609 close 2,621 (July 31); industry average full cost about 2,530 yuan/mt; SMM’s expected band 2,600–2,650 with a possible temporary break below 2,600 in August; nearly 3 Mt of new capacity planned in South China; port bauxite 940,000 mt; bauxite $70–75/mt; national alumina inventory 7.028 Mt.

Interpretation

• Today’s two new fundamental prints point in opposite directions and must be read together. The bearish one is the operating rate falling to 60.1%. The bullish one is the liquid-aluminum proportion rising more than expected. Together they explain Section 3: **the drawdown comes from fewer ingots being cast, not from more ingots being consumed.**
• The mechanism matters because its durability differs. A demand-led destock fluctuates with consumption; a liquid-aluminum-led destock is a structural change in the industry, and with electrolytic capacity already near its ceiling (45.31 Mt operating against roughly 46.29 Mt built) it runs one way. The 60–100 yuan lift in the South China premium centre, with Chongqing at 100% and Guangxi at 88% local conversion, is the same mechanism showing up in price.
• But a one-way mechanism is not a one-way price. A shrinking pool of tradable ingot supports **the basis and regional spreads more than it supports the outright price.** August 6 is direct evidence: on the same day inventory fell sharply, spot fell 40 yuan.
• Overseas supply carries no new print and its direction is unchanged: the increment is certain but slow (July still −6.7% y/y with the daily average +1.6% m/m). That caliber is over a week stale and should be weighted down.
• Alumina has no new domestic print; the $356/mt FOB East Australia trade is the only new data point and does not revise the domestic cost curve this session.

6 · Primary Aluminum Spot Market

Confirmed: SMM spot daily review, August 6 — price down, structure not loosened

• SMM’s framing: spot aluminum prices ticked downward, yet the spot market showed resilience — **tight arrivals combined with a destocking trend that remains unchanged.**
• Holders: **most suppliers regained confidence in holding prices stable and selling slowly; only a few liquidating as needed adjusted slightly lower, with limited low-priced dumping.**
• Quotes: **a discount of 10 to parity, keeping circulating pressure controllable.**
• Downstream: demand stayed mediocre, with enterprises purchasing as needed and limited willingness to take on more at current price levels.
• Traders: **improved enthusiasm to enter the market and buy at discounts.**

Confirmed: regional premiums and sentiment indices (caliber conflicts, all carried)

• East China: SMM’s August 6 review gives a discount of 10 to parity; a separate caliber gives main transactions at a **premium of 8–30 through to a discount of 8–10 against the August contract.**
• Central China: a **discount of 190–210 against the August contract with a firming trend, widened from 170–200.**
• Central China sentiment (August 6 caliber): **selling sentiment index 3.20 (unchanged d/d), purchasing sentiment index 2.91 (+0.06 d/d).**
• Caliber conflict: this Central China caliber is inconsistent with the August 5 Central China print carried yesterday (shipment 2.99, procurement 2.94). Both are recorded; neither is adjudicated.
• East China sentiment: no August 6 caliber appears in the sources consulted. The August 5 print (shipment 3.10, procurement 2.86) is carried and labeled stale.

Interpretation

• The information structure here is the exact inverse of yesterday’s. August 5 was price up, basis flipping to premium, three regions destocking — four items improving together. August 6 is price −40, quotes back to a discount of 10-to-parity and Central China’s discount widening — but **holders firm, arrivals tight, and traders buying at discounts all still lean strong.**
• The accurate judgment is therefore not that spot weakened but that **spot moved from actively rising to passively holding.** The distinction is who is doing the work: an active rise is driven by buyers, a passive hold by sellers refusing to cut. August 6 is the second.
• Traders’ improved willingness to buy at discounts is the only forward-looking item in this section. It means a widening discount gets absorbed by trading demand, which limits how far the basis can fall — but it also says the marginal buyer right now is a trader, not an end user.
• Central China’s marginal deterioration has now run two consecutive sessions, with the discount widening from 170–200 to 190–210. Yesterday’s watchlist item 6 — whether that spreads to East China — is not yet confirmed but is not falsified either: East China’s quotes moved from a premium of 8–40 to a discount of 10-to-parity, the same direction.
• A methodological note belongs here: the Central China sentiment indices carry a caliber conflict (August 5’s 2.99/2.94 against August 6’s 3.20/2.91). When the gap between two calibers exceeds the daily move being measured, **no day-on-day change should be computed from them.** This brief records the values and derives no trend from them.

7 · Key Price Drivers

Bullish factors (9)

• Social inventory erased last week’s build at five times its size: 933,000 mt against 958,000 mt, −25,000 mt — the “first accumulation of the cycle” is falsified as noise.
• SHFE reclaimed and held MA60: a 23,835 close sits 94.00 yuan above 23,741, the first close above the line in this rebound, with the intraday high 164 yuan above it.
• Both core ranges were raised in the same session: SHFE to 23,500–24,100 and LME to $3,200–3,350.
• “Agreed in principle” was disavowed as a reopening by its own signatory: Deputy Foreign Minister Gharibabadi said it does not mean full reopening, and Tehran insists the US is not a party.
• Iran’s draft bill would bar US, Israeli and “hostile” vessels with fines up to 20% of cargo value — if enacted, the exact opposite direction from a reopening.
• Live fire returned to the Strait’s entrance: two explosions on Qeshm Island Thursday night, described by Iran as strikes on “hostile targets.”
• Crude took back the deal pricing: WTI back above $78 (nearly +3% in a session), Brent $83.46 (+1.18%) — a material part of the three-session 11% decline has been recovered.
• The liquid-aluminum proportion rose above expectation in July with a further increase expected in August, and tradable commodity ingot supply is entering structural contraction: the South China premium centre is up 60–100 yuan, with Chongqing at 100% and Guangxi at 88% local conversion.
• Overseas deliverable stock remains extremely scarce: LME 271,275 mt (July 24, on-warrant 245,350 mt), with the 267,800 mt caliber the lowest this century.

Bearish factors (7)

• Spot did not follow the board: SMM A00 −40 to 23,690 against the board’s +70/+90, widening the spread by roughly 110–130 yuan in one session.
• The newest demand print is lower: the aluminum processing operating rate fell to 60.1% and is declining, down 1.0 point from 61.1% — the destock is not demand-led.
• Destocking has slowed (SMM’s own framing); the cast aluminum alloy series destocked for a tenth week but by only 200 mt, close to a standstill.
• Central China’s discount widened for a second session, from 170–200 to 190–210; East China’s quotes fell back from a premium to a discount of 10-to-parity.
• The dollar bounced off its seven-week low to 99.972 (+0.02%) — yesterday’s “cleanest bullish item” has been withdrawn.
• Tonight’s payrolls is a clean two-way risk skewed bearish: consensus +80,000 to +83,000 (FactSet +97,500) against a prior of +57,000, with Cook already on record as prepared to hike if disinflation does not resume and the July 29 decision a 9–3 split.
• Domestic capacity remains at a high plateau: 45.31 Mt operating (June) and roughly 46.29 Mt built (end-July); manufacturing PMIs 49.2 on both calibers; the 2.32 Mt ex-China commissioning pipeline is unchanged.

8 · One-Sentence Market View

9 · Watchlist for Today’s Day and Night Sessions

1. July payrolls at 20:30 Beijing — tonight’s only scheduled event and heavier than the entire aluminum-specific calendar: consensus roughly +80,000 to +83,000 with a FactSet projection of +97,500, prior +57,000, unemployment expected at 4.2%. The backdrop is the Fed’s July 29 hold at 3.50–3.75% on a 9–3 vote, its most divided since 2016, and Governor Cook already on record as prepared to raise if the “disinflation trend does not resume.” Watch two mutually exclusive outcomes: a strong print reinforces hike pricing, lifts the dollar and pressures aluminum’s valuation leg; a weak print pushes the dollar back below its seven-week low. Also watch whether the September Fed direction converges (a 61.9% hike caliber against a 54.4% cut caliber).
2. SHFE’s first retest of 23,741 — the genuine technical confirmation point: MA60 (23,741), MA5 (23,740) and the August 6 low (23,740) are stacked on one price. Watch two mutually exclusive outcomes: a retest into that band that closes above it upgrades “reclaimed MA60” from a one-session event into structural confirmation, with the August 6 high of 23,905 and the raised core-range top of 24,100 above; a close beneath it reclassifies August 6 as a false break, with MA10 (23,542) and 23,500 as the verification levels below.
3. The progress of Iran’s parliamentary bill — today’s largest new variable: it would bar US, Israeli and other “hostile” vessels and fine violations up to 20% of cargo value, and it remains under expert review. Watch three falsifiable markers: whether it goes to a floor vote; whether the open-ended “countries that have caused damage to Iran” scope survives; and whether it is formally merged with the Iran–Oman bilateral track. If enacted, it runs in the exact opposite direction from a reopening and is the most concrete potential increment on the bullish side.
4. Whether the joint statement text is published, and whether “full reopening” appears in it: August 6 delivered “agreed in principle,” not a signature, and the Deputy Foreign Minister has already said it does not mean full reopening. Watch whether the final text contains any language on full opening of the lane, whether it contains any US commitment, and whether August 5’s “zero fees for the interim” and “mines cleared from the median lane within 30 days” survive.
5. Whether live-fire incidents at the Strait’s entrance continue, and how far crude recovers: two explosions on Qeshm Island Thursday night, described by Iran as strikes on “hostile targets.” Watch whether Brent holds $83 and WTI holds $78 — oil has the most direct Strait exposure and the least aluminum-specific noise, so the extent of its recovery is the best available proxy for whether scarcity pricing has been released.
6. Whether spot returns to actively rising rather than merely passively holding: August 6 delivered price −40 and quotes back to a discount of 10-to-parity, but with holders firm, arrivals tight and traders buying at discounts. Watch whether A00 reclaims 23,730 and whether East China quotes return to a premium. A second consecutive session of spot falling while the board rises should reclassify this leg as board-driven.
7. Whether Central China’s weakness transmits to East China: its discount widened from 170–200 to 190–210 and has now deteriorated for two sessions, while East China moved from a premium of 8–40 to a discount of 10-to-parity on the same day. Watch whether both discounts keep widening together — if they do, Section 3’s inventory improvement is not being confirmed in the physical market.
8. The LME stocks update and LME’s distance to $3,349.41: stocks have stood on the July 24 caliber of 271,275 mt for thirteen consecutive sessions and their force as current evidence keeps decaying. On price, MA60 ($3,349.41) and the raised core-range top ($3,350) are numerically almost identical, forming an unusually hard band; with SHFE now above its MA60 and LME still 2.88% below its own, whether that divergence converges is the most direct read on relative domestic versus overseas strength.