Weekend: US payrolls fall 23,000 and the dollar hits a two-month low. LME gains only 0.22% while Brent loses 7% on the week.周末版:美国非农减少 2.3 万人,美元跌至两个月低点;LME 仅涨 0.22%,Brent 周跌 7%。

1 · Market Performance

Status: August 8 and 9 are non-trading days; no August 7 SHFE print appears in the sources consulted

• SHFE AL2609: no August 7 price print — day session or night session — appears in the sources consulted. This brief does not construct, infer, or quote unconfirmed values.
• The confirmed caliber remains August 6: open 23,785, range 23,740–23,905, close 23,835, +70 (+0.29%) against the previous settlement and +90 against the August 5 close of 23,745.
• Moving averages (August 6 caliber): MA5 23,740, MA10 23,542, MA30 23,191.33, MA60 23,741. The close is above all four, with a margin of 94.00 yuan over MA60.
• MACD (August 6 caliber): DIF 93.4473 above DEA −3.5285, red histogram 193.9515.
• Core trading range (August 6 caliber): 23,500–24,100 yuan/mt.
• The critical data gap must be stated explicitly: **the SHFE night session opened at 21:00 Beijing on August 7, thirty minutes after the payrolls release at 20:30.** The domestic board’s entire reaction to the largest macro event of the month is therefore unobserved in this brief.
• Volume and open interest: still on the July 30 caliber (267,105 lots, open interest 253,776, +2,341), now six sessions stale and not quoted as current data ⊘.

Confirmed: LME on August 7 — two calibers, same direction, very small magnitude

• Caliber one (TradingEconomics): August 7 close **$3,276.50, +$7.05 (+0.22%), against a previous close of $3,269.45.** Month +4.31%, year +25.26%; Q3 forecast $3,231.49, 12-month forecast $3,421.47.
• Caliber two: $3,273, +0.11%. The two differ by $3.50; both are recorded.
• No August 7 SMM/AlCircle caliber appears in the sources consulted. The August 6 caliber is carried and labeled one session stale: close $3,253.00; MA5 $3,227.70, MA10 $3,199.45, MA30 $3,164.40, MA60 $3,349.41; MACD DIF −6.0545 above DEA −25.1982, histogram 38.2874; core range $3,200–3,350.
• Against the carried MA60 of $3,349.41, the August 7 close sits $72.91 below, about **−2.18% — continued repair from −2.88% on August 6 and −4.3% on August 5, but still beneath the line.**

Interpretation: the important fact is not how much it rose, it is why it rose so little

• This has to be said without softening: **on the most dollar-bearish macro print of the quarter, LME aluminum rose 0.22%.** The hike was being priced out in real time, the dollar made a two-month low, the two-year yield fell 8bp — and the metal added roughly two-tenths of one percent.
• Two readings compete, and this brief does not adjudicate between them on Friday’s evidence. The generous one: Asia participated only partially on Friday; LME had already run from $3,149 on July 29 to $3,276.50 across seven sessions and was not positioned to extend; and the domestic board has no observed opportunity to price it until Monday.
• The severe one: **aluminum’s reaction function is no longer macro.** Since mid-July the drivers have been the Hormuz premium and Chinese ingot scarcity, and this market has repeatedly ignored the dollar in both directions. If that is right, Friday delivered the bullish macro outcome and simultaneously confirmed that the macro channel is closed — which would make the September rate path materially less important to aluminum than Section 4 of this brief has implied for three weeks.
• Position: $3,276.50 is a closing high for this rebound and the first clear close above the August 6 print of $3,269.45. The hardest band above remains MA60 ($3,349.41) and the core-range top ($3,350), which are numerically almost identical; $3,300 is the round-number gate in front of them.
• SHFE’s position can only be carried: the August 6 close sat 94.00 yuan above MA60 for the first time in this rebound, but **the first retest of 23,741 has still not been tested — and that level coincides almost exactly with MA5 (23,740) and the August 6 low (23,740), making it the cleanest single verification price of the cycle.**
• The SHFE/LME divergence continues to converge without closing: SHFE above its MA60, LME 2.18% below its own, narrowed from 2.88%.

2 · Aluminum Prices and Related Markets

Confirmed and carried: only LME and macro have new August 7 prints; spot and the domestic board do not

• SMM A00 / Shanghai spot aluminum ingot: **no August 7 print in the sources consulted ⊘. Carried August 6: 23,690 yuan/mt, −40 ↓.
• East China premium/discount (August 6, carried): SMM’s daily review records a discount of 10 to parity; a separate caliber records a premium of 8–20 on August 6 against a premium of 8–40 on August 5. Both are carried.
• Central China (August 6, carried): a discount of 170–200 (one caliber) or 190–210 (another) against the August contract, with a firming transaction trend. The conflict is unresolved and both are carried.
• South China: the structural premium centre remains 60–100 yuan/mt above the same period in prior years (carried).
• Foshan scrap spreads (August 5, carried): A00 versus mixed extrusion scrap 2,130 yuan/mt; A00 versus shredded tense scrap 930 yuan/mt.
• LME aluminum: **$3,276.50, +$7.05 (+0.22%) ↑ (TE caliber); $3,273, +0.11% ↑ (second caliber). Both point the same way.
• SHFE aluminum futures WARRANTS (August 7 — **the only genuinely new domestic print in this brief): 307,008 mt, −1,795 mt d/d; −13,216 mt (−4.13%) w/w; −87,020 mt (−22.08%) m/m ↓ (bullish).**
• China aluminum ingot social inventory: 933,000 mt (August 6 caliber, −25,000 mt from 958,000 mt) ↓, no new print this period.
• LME stocks: 271,275 mt (July 24) with 245,350 mt on-warrant; alternative caliber 267,800 mt. A fourteenth consecutive session without an update ⊘.
• Alumina futures: AO2609 close 2,621 (July 31, carried) ⊘. No confirmed new print for August 4–7.
• Alumina, overseas: 30,000 mt at $356/mt FOB East Australia for September loading, August 5 (carried).
• ADC12: no confirmed current print in the sources consulted; not quoted ⊘.
• Crude: **Brent $82.27 (August 7), −0.27% on the day and DOWN MORE THAN 7% ON THE WEEK ↓; month +5.45%, year +23.55%; Q3 forecast $90.26, 12-month forecast $102.75. WTI near $78.16.
• US dollar index: **99.43, −0.5% (Reuters caliber) ↓ / 99.604, −0.3260 (−0.33%), month −1.37%, year +1.45% (TE caliber) ↓. A two-month low on both.

Interpretation

• The structure of this section is: **macro strongly bullish, aluminum marginally higher, crude clearly lower.** The three are out of step, and being out of step is itself the information.
• The crude–aluminum divergence is the item most worth watching. If the Hormuz premium is being squeezed out across the whole week (Brent −7%+) while aluminum still grinds higher, then aluminum’s bid must be coming from somewhere else — and the most likely source is domestic structural scarcity (warrants −22.08% m/m), not geopolitics.
• That inference is falsifiable: **if aluminum’s driver has genuinely rotated from geopolitics to domestic structure, LME’s sensitivity to Strait headlines should keep falling while SHFE’s strength relative to LME should keep improving.** Monday’s reopen begins the test.
• The −87,020 mt (−22.08%) monthly draw in SHFE warrants is the hardest domestic number in this brief, because it is exchange-verified rather than survey-based. The restraint: warrant declines can come from consumption, from cancellation into the social inventory pool, or from holders no longer wanting to deliver — a single series cannot demonstrate demand.
• Alumina has now gone several sessions without a domestic print; its weight as a current marginal driver should be reduced to the minimum.

3 · Inventory

Confirmed: the only new inventory print this period comes from exchange warrants

• SHFE aluminum futures warrants (August 7): **307,008 mt, −1,795 mt d/d; −13,216 mt (−4.13%) over the past week; −87,020 mt (−22.08%) over the past month.**
• China aluminum ingot social inventory: **933,000 mt (August 6), down 25,000 mt from the 958,000 mt carried since August 3; the same source records it as both −25,000 m/m and −20,000 w/w, and both are carried without netting.** No new print this period.
• A caliber excluded, and why: a figure of “687,000 mt across eight markets as of August 8, up 9,000 mt from last Thursday, a third consecutive week of accumulation” surfaced in the sources. It cannot be reconciled with the 933,000 mt series, its year could not be confirmed, and it is **NOT adopted.** It is recorded here only to document the exclusion.
• China’s cast aluminum alloy ingot social inventory: a tenth consecutive week of destocking, but only 200 mt this week (carried).
• July’s average weekly drawdown of 54,800 mt remains the highest for the period in three years (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 (“lowest this century”). A fourteenth consecutive session without an update.
• SHFE cast aluminum alloy warrants: 17,553 mt (August 3, carried).
• National alumina inventory 7.028 Mt (+24,000 mt w/w); port bauxite 940,000 mt (both carried).

Interpretation: the warrant series is harder than the social series — and easier to over-read

• Weight belongs with the warrants this period: **exchange warrants are verified data; social inventory is survey data.** A −22.08% monthly draw is a large number with an unambiguous direction that requires no reconciliation between calibers.
• The mechanical restraint has to be given alongside it: warrant declines have three non-exclusive paths — metal consumed, metal cancelled and moved into the tradable social pool, and holders declining to deliver because the spread no longer pays. Absent a breakdown, **a falling warrant count cannot be equated with improving demand.**
• What corroborates it is the structural judgment this brief has now made on four consecutive days: the destock mechanism remains on the supply side. July’s liquid-aluminum proportion rose more than expected with August expected to edge higher, so fewer ingots are cast; meanwhile the processing operating rate is 60.1% and falling and SMM’s July processing PMI was 42.2 with all seven sub-sectors contracting. “Casting less” and “using more” are not the same thing.
• Nothing new overseas: LME stocks have stood on the July 24 caliber for fourteen consecutive sessions. The “lowest this century” character holds, but its force as **current evidence keeps decaying and it should not be re-counted as a fresh bullish item.**
• Net for this section: **bullish on the warrants, but less strongly than the headline percentage suggests; inventory remains a support for price rather than a driver of it.**

4 · Macro Factors

Confirmed: July payrolls — not soft, negative

• US nonfarm payrolls **FELL 23,000 in July, the first decline in months.** Consensus was roughly **+80,000 (Reuters caliber) to +83,000 (WSJ survey caliber), with a FactSet projection of +97,500.**
• Revisions: June cut from +57,000 to **+20,000; May cut from +129,000 to +63,000; a combined two-month revision of −103,000.**
• The trailing twelve-month average monthly gain is just +34,000.
• Unemployment rate **4.1%, down from 4.2% — but the labour force participation rate fell to 61.4%, the lowest in more than five years.**
• Average hourly earnings rose 2 cents to **$37.62, +3.2% year-on-year, the slowest twelve-month pace since May 2021.**
• Sector detail: local government education −50,000; retail trade −19,000; total government −53,000, described as largely seasonal; **private payrolls actually rose 30,000.**

Confirmed: rates, the dollar, and the market reaction

• Fed funds futures September hike odds: **from 55% to 40% (Reuters caliber).** A second caliber: from 57% to **43.9%, with the probability of a hold rising to 60.4% from 43.2%.** A third caliber: a collapse from roughly 55% to **about 20%, against 82% in late July.** All three are carried, the spread between them is large (20% versus 40% versus 43.9%), and **no single figure is adopted.**
• Treasuries: two-year yield −8bp to **4.16%; ten-year −6bp to 4.61%.**
• US dollar index: **99.43, −0.5% (Reuters caliber, August 7 intraday); 99.604, −0.3260 (−0.33%) (TE caliber, August 7), month −1.37%, year +1.45%, Q3 forecast 99.614.** Both calibers put it at a **two-month low.**
• Yen 157.20; Nasdaq +0.8%, S&P 500 +0.3%.
• Next scheduled US event: **July CPI on August 12.**
• Background (carried): the Fed held at 3.50–3.75% on July 29 on a **9–3 vote, its most divided since 2016; Governor Cook had said she was prepared to raise if “the disinflation trend does not resume.”**

Confirmed: China July trade data, released August 7

• Exports **+23% year-on-year in USD terms, above the +22.2% consensus — but decelerating from June’s +27%, which had been the fastest since October 2021.**
• Trade surplus **$112.5 billion, above expectations but narrower than June.**
• Carried: June unwrought aluminum and aluminum semis exports 711,000 mt, +45.4% y/y; H1 2026 cumulative 3.396 Mt, +16.3% y/y.

Confirmed and carried: Hormuz — the deal advances, the text still has not landed

• August 5: Iran and Oman finalised agreement on the **geographical coordinates of a proposed inbound/outbound shipping route after more than three weeks of talks, covering technical arrangements, the security and sovereignty of both states, and a proposed joint coordination centre for maritime traffic.**
• August 6: Iran said the arrangement is **agreed in principle; Deputy Foreign Minister Kazem Gharibabadi said it would not mean full reopening; Tehran insists the US is not a party.**
• Foreign Ministry spokesman Esmaeil Baghaei said the two sides are **preparing a joint statement covering technical, legal, security and environmental points.** As of August 8, **no joint statement has been published in the sources consulted** ⊘.
• Iranian official sources maintain that **reopening depends on the US ending its naval blockade of Iran’s ports.**
• The Iranian parliamentary bill barring US, Israeli and other “hostile” vessels, with fines up to 20% of cargo value, **remains under expert review.**

Confirmed: energy — new items on both the supply and the geopolitical side, pointing opposite ways

• OPEC+: seven core members (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman) agreed to raise collective output by **188,000 bpd from September, a sixth consecutive monthly increase that completes the rollback of the voluntary cuts first introduced in 2023.** Bearish for crude on the supply side.
• Houthi escalation on August 7: strikes on southern Saudi Arabia **injured 11 civilians, alongside a continuing blockade of Saudi shipping in the Red Sea and attacks on tankers transiting Bab al-Mandeb.** Bullish for crude on the geopolitical side.
• Crude calibers for the day and the week, carried in parallel: **Brent $82.27 (TE caliber, −0.27% d/d, more than −7% on the week); a second caliber records Brent $81.93 and WTI $76.99, with weekly losses of about 8% and 5.3%.** Same direction, slightly different magnitude; both recorded.

Interpretation: the bullish macro outcome was delivered — the problem is that aluminum did not take it

• On yesterday’s framework, Friday resolved at **the extreme bullish end of the distribution: not soft but negative, and not a single weak month but a weak month plus 103,000 stripped from the two before it.** Wage growth at 3.2% year-on-year, the slowest since May 2021, **speaks directly to Cook’s stated condition — on the wage side, disinflation has resumed.**
• But three restraints belong here, or the print reads as more bullish than it is.
• First, the unemployment rate fell for the wrong reason. Participation at 61.4%, a five-year low, means the improvement came from people leaving the labour force, not from people finding work. For an industrial metal that is a signal of weakening end demand, not of strength.
• Second, the repricing runs from “hike” to “hold,” not from “hold” to “cut.” September hike odds remain 40% (or 43.9%). This is **a headwind removed, not a tailwind added.**
• Third, private payrolls actually rose 30,000; the negative headline was driven by government (−53,000, described as largely seasonal). The internals are worse than the twelve-month trend but not as catastrophic as the header.
• Crude requires an explicit correction from this brief. On Thursday this report called WTI’s near-3% bounce “the market pricing agreed-in-principle ≠ reopened” and named it the day’s most valuable confirmation. It did not hold at weekly frequency: **Brent closed August 7 at $82.27, −0.27% on the day and down more than 7% on the week, against the $83.46 carried here on Friday morning.** A one-session bounce inside a 7% weekly decline is not a restoration of the risk premium — it is a failed restoration.
• The accurate statement is that **the Hormuz premium bled out across the entire week despite the Qeshm Island firing, despite the joint statement remaining unpublished, despite Tehran holding that reopening requires the US to lift its blockade, and despite the Iranian bill still drafting a ban on US and Israeli shipping.** Crude has the most direct Strait exposure, and it is pricing the deal as more likely to arrive than this brief has been. That divergence is recorded, not argued away.
• One qualification belongs on that correction, or crude gets read as carrying more information than it does: **not all of this week’s decline is geopolitical de-pricing.** OPEC+ agreed to add 188,000 bpd from September, a sixth consecutive monthly increase that completes the rollback of the 2023 voluntary cuts — an **independent supply-side bearish item — while the Houthi strikes on southern Saudi Arabia on August 7 push the other way.** So the 7–8% weekly fall is a composite of premium deflation and OPEC+ supply, and **the share attributable to Hormuz is smaller than the headline decline.** That reduces crude’s purity as a Strait proxy; it does not rescue Thursday’s “restoration” language, which remains withdrawn.
• China’s trade data is a genuine net positive, discounted for deceleration: +23% beat +22.2% but fell short of June’s +27%, and the header cannot separate tariff front-running from end demand.
• Net: **the direction is clearly bullish — a two-month-low dollar and a partially priced-out hike — but the transmission was called into question by Friday’s own price action.** This brief does not assume transmission resumes on Monday; that is item 1 of the watchlist.

5 · Fundamentals

Carried: domestic demand — the off-season is deepening, and this is now the fourth reading pointing the same way

• China downstream aluminum processing operating rate: **60.1% and falling (carried, down 1.0 point from 61.1%).**
• SMM framing: **off-season characteristics continue to deepen, with operations across sectors generally weakening or holding steady at low levels; the processing industry was weak this week under the combined pressure of a deepening off-season and rebounding aluminum prices.**
• SMM July aluminium processing PMI 42.2, with all seven sub-sectors in contraction (carried).
• Sub-sector operating rates (week of July 25, carried): extrusion 52.9%, primary alloy 59.0%, secondary aluminum 50.8%, wire and cable 63.6%, plate/sheet/strip 69.4%, foil 70.9%.
• PV module scheduled output 38.5 GW in July to 39.3 GW in August (carried); June plate/sheet exports +44% y/y and foil exports +23.8% y/y (carried).

Carried: domestic supply and the liquid-aluminum ratio

• China’s operating capacity 45.31 Mt as of June 2026; built capacity approximately 46.29 Mt as of end-July.
• July’s liquid-aluminum proportion rose **more than expected, with August expected to edge higher.**
• South China’s molten-aluminum conversion has lifted the premium centre 60–100 yuan/mt versus the same period in prior years; Chongqing at 100% local digestion, Guangxi at 88%; SMM describes tradable commodity ingot supply as entering structural contraction.

Carried and undated: overseas supply

• July ex-China output −6.7% y/y with daily average +1.6% m/m (carried).
• SMM’s 2026 ex-China commissioned operating capacity estimate 2.32 Mt (carried).
• Alcoa cut its 2026 alumina production guidance by 200,000–300,000 mt to **9.5–9.6 Mt after Cyclone Narelle and contamination at its Pinjarra refinery in Western Australia; it is also restarting a potline at Warrick, Indiana and exploring a restart at Wenatchee, Washington.** The sources consulted give no confirmed date, so these are **recorded as undated and not counted as a current marginal driver.**
• Indonesia’s 2026 operating capacity is projected near 2.51 Mt; India’s Balco continues ramping in August; Slovalco restarts in Q4; the Missouri smelter restarts before year-end; EGA Al Taweelah had restarted 89 of 1,262 pots as of July 2 (all carried).

Carried and stale: alumina (over a week old)

• AO2609 close 2,621 (July 31); SMM industry average full cost near 2,530 yuan/mt; expected band 2,600–2,650 with a possible temporary break below 2,600 in August; nearly 3 Mt of new South China capacity planned over coming months; bauxite $70–75/mt; port bauxite 940,000 mt; national alumina inventory 7.028 Mt.
• Overseas: 30,000 mt at $356/mt FOB East Australia for September loading, August 5.

Interpretation

• The demand side now has four consecutive readings pointing the same way: **processing PMI 42.2 with all seven sub-sectors contracting → operating rate 61.1% → 60.1% and falling → the off-season “continuing to deepen” with sectors generally weakening.** With that consistency, reading any inventory improvement as a demand improvement has no support.
• The structural contraction on the supply side holds and was reinforced by Friday’s warrant data: **SHFE warrants −22.08% month-on-month.** The mechanism is unchanged — a rising liquid-aluminum ratio means fewer ingots cast, which means tradable commodity metal contracts, which strengthens the basis and regional spreads.
• The methodological point that must be repeated: **this mechanism supports the basis and regional spreads more than it supports the absolute price.** August 6 — a large inventory drawdown on the same day spot fell 40 yuan — remains the cleanest evidence for it.
• Nothing current from overseas this period. Alcoa’s alumina cut and its smelter restarts point in opposite directions and carry no confirmed date, so **no net effect is booked to the current period.**
• Alumina is more than a week stale and should be treated as **a background variable rather than a driver; its medium-term direction remains lower cost, which is positive for smelter margins and negative for the aluminum price.**

6 · Primary Aluminum Spot Market

Status: no August 7 spot print; everything below is the carried August 6 caliber

• SMM A00: 23,690 yuan/mt, −40 (August 6). No August 7 print ⊘.
• SMM’s August 6 daily review (carried): spot prices eased slightly but the physical market remained resilient — **tight arrivals plus an unchanged destocking trend; most suppliers regained confidence in holding prices firm and slowed shipments, with only limited discounting by those liquidating as needed; quotes at a discount of 10 to parity; downstream demand mediocre with buying as needed and limited willingness to add at current levels; traders showed improved enthusiasm to buy at discounts.**
• East China premium/discount: SMM’s review says a discount of 10 to parity; a separate caliber says a premium of 8–20 on August 6 against 8–40 on August 5. Both carried.
• Central China: a discount of 170–200 (one caliber) or 190–210 (another) against the August contract, with a firming transaction trend.
• East China sentiment (August 6): selling 3.10 (+0.01), purchasing 2.86 (+0.06).
• Central China sentiment: one caliber has selling 2.99 (−0.2) and purchasing 2.94 (+0.03); another has selling 3.20 (unchanged) and purchasing 2.91 (+0.06). The conflict noted on August 7 remains unresolved; both are carried and **no day-on-day change is computed from them ⊘.**
• Foshan scrap spreads (August 5): A00 versus mixed extrusion scrap 2,130 yuan/mt; A00 versus shredded tense scrap 930 yuan/mt.

Interpretation

• There is no new evidence in this section this period, so **no new conclusion should be produced.** The prior judgment stands: spot is in **passive firmness, not active strength — held up by sellers declining to cut rather than pushed up by buyers.**
• The only forward-looking item remains **traders buying at discounts: it means a widening discount gets absorbed by trading demand, which limits how far the basis can fall — but it also says the marginal taker of metal is the trade, not the end user.**
• A sequencing risk should be flagged: spot was unobserved on August 7, a day on which LME rose and macro turned strongly supportive. If Monday’s spot opens at a deeper discount, Friday’s macro bullishness got no confirmation whatsoever in the physical market, which strengthens the “severe reading” in Section 1.
• The Central China and East China sentiment caliber conflicts are now two periods old and unresolved. Until they are resolved, this brief will not include them in any trend inference.

7 · Key Price Drivers

Bullish factors (11)

• July payrolls were negative: −23,000 against +80,000 to +83,000 consensus (FactSet +97,500), with May and June revised down a combined 103,000 — the most direct valuation-side bullish item available.
• Part of the hike is priced out: September hike odds 55%→40% (Reuters) / 57%→43.9% (second caliber), hold rising to 60.4%; two-year Treasury −8bp to 4.16%.
• The dollar index made a two-month low: 99.43 (−0.5%, Reuters) / 99.604 (−0.33%, TE).
• Average hourly earnings +3.2% y/y, the slowest since May 2021 — this directly undercuts Cook’s stated precondition for a hike.
• SHFE aluminum warrants −87,020 mt (−22.08%) m/m and −13,216 mt (−4.13%) w/w to 307,008 mt — exchange-verified, the hardest domestic number this period.
• Social inventory 933,000 mt (−25,000 mt); last week’s first build of the cycle has been erased at five times its size (carried).
• LME closed at a rebound high of $3,276.50, month +4.31%, year +25.26%; the discount to MA60 narrowed from −2.88% to −2.18%.
• The Hormuz joint statement is still unpublished, reopening is still conditioned on the US lifting its naval blockade, and the Iranian bill barring US and Israeli ships with fines up to 20% of cargo value is still advancing.
• July’s liquid-aluminum proportion rose more than expected with August expected higher, putting tradable commodity ingot into structural contraction; South China’s premium centre is 60–100 yuan higher than seasonal norm.
• China’s July exports rose 23% y/y against a +22.2% consensus, with a $112.5 billion surplus, above expectations.
• Houthi strikes on southern Saudi Arabia on August 7 injured 11 civilians, alongside a continuing Red Sea blockade and Bab al-Mandeb tanker attacks — regional shipping risk has not fallen in step with the Iran–Oman talks.

Bearish factors (9)

• Aluminum’s response to bullish macro was close to nil: LME +0.22% (+$7.05) on the most dollar-bearish print of the quarter — the single most important negative signal in this brief.
• Brent fell more than 7% on the week to $82.27 on August 7 (−0.27% d/d) — the Hormuz premium bled out across the week, falsifying this brief’s Thursday reading that the premium was being restored.
• The unemployment rate fell because participation dropped to 61.4%, a five-year low, not because hiring improved — a signal of weakening end demand.
• The repricing is “hike → hold,” not “hold → cut”; September hike odds remain 40% (or 43.9%).
• Four demand readings now point the same way: processing PMI 42.2 with all seven sub-sectors contracting, operating rate 60.1% and falling, off-season “continuing to deepen,” sectors generally weakening or flat at lows.
• Destocking has slowed (SMM’s own framing); cast aluminum alloy ingot destocked for a tenth week but by only 200 mt, close to a standstill.
• Spot has not confirmed: A00 −40 to 23,690 (August 6), East China quotes back to a discount of 10 to parity, Central China’s discount widened — and there is no August 7 spot print at all.
• Capacity and external demand pressure unchanged: operating capacity 45.31 Mt, built capacity ~46.29 Mt; manufacturing PMI 49.2 on both calibers; 2.32 Mt of ex-China commissioning; export growth decelerating from +27% in June to +23% in July.
• OPEC+ adds 188,000 bpd from September, a sixth consecutive monthly increase completing the rollback of the 2023 voluntary cuts — lower energy costs weaken the cost-support narrative for aluminum.

8 · One-Sentence Market View

9 · Watchlist for Monday’s Reopen and Night Session

1. The size of SHFE’s one-off catch-up to payrolls at Monday’s open — the one key variable this brief could not observe: No August 7 SHFE print, day or night, appears in the sources consulted, and the night session opened thirty minutes after the release. Watch two mutually exclusive outcomes: a gap higher that holds means the macro channel to the domestic board is still open and Section 1’s “generous reading” stands; a flat open or a fade from the highs replicates LME’s Friday torpor onshore and **should formally reclassify aluminum’s driver as non-macro.**
2. SHFE’s first retest of 23,741 — still the real technical checkpoint, and still untested: MA60 (23,741), MA5 (23,740) and the August 6 low (23,740) are stacked on one price. A retest that closes above upgrades “reclaimed MA60” from a one-day event to a structural confirmation, with 23,905 and the core-range top of 24,100 above; a close below reclassifies August 6 as a false break, with MA10 (23,542) and 23,500 as the verification levels beneath.
3. Whether LME can convert a two-month-low dollar into a break of $3,300: The August 7 close of $3,276.50 is a rebound closing high, and the discount to MA60 ($3,349.41) has narrowed to −2.18% from −2.88%. Watch the $3,300 round number, above which MA60 and the core-range top ($3,350) form a nearly coincident hard band. If the dollar keeps weakening and LME still cannot clear $3,300, the evidence for a closed macro channel strengthens materially.
4. Whether crude’s weekly direction stabilises, and how the decline splits between geopolitics and supply: Brent $82.27 on August 7 ($81.93 on a second caliber), **down 7–8% on the week; WTI $76.99–78.16 across calibers.** Two new facts landed this week pointing opposite ways: **OPEC+ adding 188,000 bpd from September, a sixth consecutive increase completing the rollback of the 2023 voluntary cuts, and Houthi strikes on southern Saudi Arabia on August 7 injuring 11 civilians alongside a continuing Red Sea blockade.** Watch whether Brent holds $82 and WTI holds $77 — and more importantly, whether crude stabilises once the OPEC+ addition is absorbed: if it does, the share of this week’s decline attributable to Hormuz is smaller than the headline and the geopolitical column needs no large downgrade; if it does not, it does.
5. Whether the Iran–Oman joint statement is published, and whether “full reopening” appears in the text: Spokesman Baghaei said the two sides are preparing a joint statement covering technical, legal, security and environmental points; as of August 8 it has not appeared. Three falsifiable checkpoints: whether it is issued at all; whether it contains language on full opening of the lane; and whether the condition that reopening requires the US to lift its naval blockade is retained or dropped.
6. US July CPI on August 12 — the next macro event, and possibly the heavier one: Payrolls already took September hike odds to 40% (or 43.9%); CPI is the direct input that decides whether that keeps falling or gets taken back. Wage growth is already down to 3.2% y/y, the slowest since May 2021 — a soft CPI could remove the “hike” column almost entirely, the cleanest valuation-side bullish outcome available to aluminum, while a rebound would claw back part of Friday’s repricing.
7. Whether the SHFE warrant draw continues, and the next weekly social inventory print: Warrants stood at 307,008 mt on August 7, −22.08% m/m. Watch whether daily draws continue and whether social inventory extends below 933,000 mt. If the two diverge — warrants falling while social inventory rises — the warrant draw is cancellation into the tradable pool rather than consumption, and **this brief’s bullish read on it should be downgraded.**
8. Whether spot confirms Friday’s macro bullishness on Monday: August 6 had A00 at 23,690 (−40), East China quotes at a discount of 10 to parity and Central China’s discount widening; August 7 has no print. Watch whether A00 reclaims 23,730, whether East China quotes return to a premium, and whether Central China’s discount narrows. If spot opens at a deeper discount, Friday’s macro bullishness got no physical confirmation at all, and Section 1’s “severe reading” gains the upper hand.