On January 28, 2026, SHFE aluminum prices experienced a sudden surge. As of 11:30 that day, the main SHFE aluminum contract was quoted at 25,345 yuan/mt, a sharp increase of 1,100 yuan from the previous day's settlement price, up 4.54%; SHFE aluminum open interest increased by approximately 68,000 lots in a single day, indicating significantly improved market trading activity. This unusual strength in SHFE aluminum prices was primarily driven by three factors:First, the escalation of the US-Iran geopolitical conflict significantly disrupted aluminum product trade; second, against the backdrop of position limits in the precious metals market, funds showed a trend of flowing into the base metals sector; third, expectations for production cuts at domestic alumina refineries recently increased, further boosting overall market sentiment.
The intensification of the US-Iran military conflict raised shipping risks in the Strait of Hormuz, posing risks to the production and export circulation of electrolytic aluminum in surrounding countries, thereby increasing risks in the global electrolytic aluminum trade system. On one hand, Middle East electrolytic aluminum production in 2025 was about 6.83 million mt, accounting for 9% of global production,geopolitical conflicts increased transportation channel risks for aluminum products from this region; on the other hand, the Strait of Hormuz carries 30% of global oil trade, and shipping risks not only fueled expectations for rising global energy costs, but also affected cross-regional transportation of raw materials like alumina and bauxite in the aluminum industry chain, further exacerbating supply-side uncertainties.
Simultaneously, strengthened position limit regulations in the precious metals market became a key driver for fund migration into the base metals sector. Recent intensive risk control and position limit measures targeting precious metals such as gold and silver triggered capital outflows from the precious metals market. SHFE aluminum, as a core base metal, became a significant target for fund allocation, injecting crucial momentum into the price increase.
Risk Warning: The current surge in SHFE aluminum prices is driven by events and fund flows, with market sentiment in a phase of excitement. Subsequent vigilance is needed against risks of sentiment cooling and price corrections triggered by multiple factors.
[Data Source Statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only and not constituting decision-making advice.]
Data Source: SMM
