📅 2026-10-09 · Cast Aluminum Alloy · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-10-08 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

SHFE.AD In-Depth Analysis Report | Bears in Control, Downside Target 23000 | 2026-10-09

SHFE.AD (cast aluminum alloy) currently shows a clear bearish bias. Core logic: the night session weakened significantly, breaking below key support; the top 20 seats' net short positions continued to rise, indicating institutional willingness to short; and the 5-day decline widened to -1.65%, confirming downward short-term momentum. Although the 20-day decline remains relatively mild, price has broken below the lower edge of the 20-day channel and is approaching pivot S1, with technicals and positioning resonating toward further downside risk. Invalidation conditions: price regains a firm hold above 23523 (R1), or the night session reclaims the 23230 level on increased volume.

I. Bottom Line & Directional Bias

SHFE.AD (Cast Aluminum Alloy) currently shows a clear bearish bias. The core logic: the night session weakened significantly, breaking below key support; net short positions among the top 20 seats continued to rise, indicating institutional willingness to sell; and the 5-day decline widened to -1.65%, confirming downward short-term momentum. Although the 20-day decline is relatively mild, price has broken below the lower bound of the 20-day channel and is approaching pivot S1, with technicals and positioning resonating toward further downside risk. Invalidation conditions: price re-establishes firmly above 23523 (R1), or the night session recaptures the 23230 level on rising volume.

Three core reasons:

First, technical breakdown. The previous trading day's settlement price of 23435 [2026-10-08] fell 1.53% versus the prior day, and the night session probed further down to 23000, a 1.86% decline versus settlement. Price has broken below the 20-day channel lower bound of 23145, and the current night session low of 23000 is near pivot S1 at 23068.33; an effective break would open up downside space. ATR14 is 297.5, indicating current volatility is sufficient to sustain the trend.

Second, positioning is short-dominated. The top 20 seats hold a net short of 331 lots, with a daily increase of 168 net short lots, showing institutional funds adding shorts during the decline rather than pure long liquidation. Total main-contract open interest is 12297 lots, up 4834 lots versus the prior day, with net shorts increasing, confirming active short building or insufficient short covering; market sentiment is bearish.

Third, no clear macro or supply-demand tailwinds. Current macro data such as DXY 102.11 and the 10Y UST yield at 5.23% remain elevated, but no significant aluminum-positive catalyst has emerged. On supply and demand, inventory and warehouse warrant data show no significant destocking, and processing margins have not improved materially, leaving a lack of fundamental factors to support a price rebound.

Directional invalidation: if price re-establishes firmly above 23523 (R1), or the night session recaptures the 23230 level on rising volume, the bearish thesis fails and the stance shifts to neutral/watch.

II. Price Action & Technicals

SHFE.AD (Cast Aluminum Alloy) shows clear bearish technical characteristics. The previous trading day's settlement price of 23435 [2026-10-08] fell 1.53% versus the prior day; the 5-day change is -1.65% and the 20-day change is -0.87%. The night session (10-08 21:05 to 10-09 01:00) opened at 23150, high 23175, low 23000, close 23000, down -0.99% versus the day session close and -1.86% versus settlement. Price has broken below the 20-day channel lower bound of 23145, and the current night session low of 23000 is near pivot S1 at 23068.33; an effective break would open up downside space.

ATR14 is 297.5 (1.28%, full intraday range) and RV20 is 11.7%, showing volatility at a relatively high level with strong trend persistence. The 20-day channel range is 23145–23935; the current price sits near the lower bound, at the 10.8% position. Pivot P is 23361.67, R1 23523.33, S1 23068.33. The current night session price of 23000 is already below S1; if the close confirms the break, the technical picture turns further bearish.

On the weekly chart, the last completed weekly candle (2026-09-28 to 2026-09-30) closed at 23520, with a weekly change of -0.95%. This week (starting 2026-10-08, 1 trading day) is not yet closed and is tentatively marked at 23230 (-1.23%); do not draw weekly conclusions from this. The last 5 settlement days show price stepping down from 23745 on 09-24 to 23230 on 10-08, a choppy downtrend.

Key technical levels: if price breaks below 23000, the next target is 22700 (about 1 ATR); if it rebounds above 23523 (R1), the bearish thesis fails. The current night session low of 23000 is key support; losing it would accelerate the decline.

III. Supply-Demand Balance & Fundamental Drivers

SHFE.AD (Cast Aluminum Alloy) fundamentals show no significant positive catalysts. Inventory and warehouse warrant data show no significant destocking, and processing margins have not improved materially, leaving a lack of fundamental factors to support a price rebound. Current macro data such as DXY 102.11 and the 10Y UST yield at 5.23% remain elevated, but no significant aluminum-positive catalyst has emerged. On supply and demand, inventory and warehouse warrant data show no significant destocking, and processing margins have not improved materially, leaving a lack of fundamental factors to support a price rebound.

On macro transmission, the dollar index DXY 102.11 and the 10Y UST yield at 5.23% are elevated and may weigh on commodity prices. However, market focus remains on China supply-demand and inventory changes. The next 7-day calendar shows CPI and PPI data on 10-14 may affect the black, nonferrous, and chemicals sectors, but there is currently no direct aluminum-positive catalyst.

On supply-demand balance, inventory and warehouse warrant data show no significant destocking, and processing margins have not improved materially, leaving a lack of fundamental factors to support a price rebound. Current market sentiment is bearish, institutional funds keep adding shorts, technicals have broken down, and with no significant fundamental tailwinds, downside risk is elevated.

IV. Positioning & Fund Flows

The top 20 seats hold a net short of 331 lots, with a daily increase of 168 net short lots, showing institutional funds adding shorts during the decline rather than pure long liquidation. Total main-contract open interest is 12297 lots, up 4834 lots versus the prior day, with net shorts increasing, confirming active short building or insufficient short covering; market sentiment is bearish.

On COT weekly change versus price divergence, the price decline accompanied by rising net shorts indicates short dominance. On implied versus realized volatility, ATR14 is 297.5 and RV20 is 11.7%; volatility is at a relatively high level with strong trend persistence.

On fund flows, the increase in net shorts among the top 20 seats shows strong institutional willingness to sell. Total main-contract open interest rose, but net shorts increased, indicating active short building or insufficient short covering. Current market sentiment is bearish, institutional funds keep adding shorts, technicals have broken down, and with no significant fundamental tailwinds, downside risk is elevated.

V. Cross-Asset & Onshore-Offshore Value

On cross-asset relative value, the gold/silver ratio is 69.95, 1Y percentile 80.16%, 3Y percentile 26.72%; copper/gold ratio 1.58, 1Y percentile 96.83%, 3Y percentile 56.61%; oil/gold ratio 0.022, 1Y percentile 92.06%, 3Y percentile 47.88%. The gold/silver ratio sits at a high 1Y percentile, showing gold outperforming silver; the copper/gold ratio at a very high 1Y percentile, showing copper outperforming gold; the oil/gold ratio at a high 1Y percentile, showing crude outperforming gold.

On onshore-offshore relative value, the China instrument SHFE.AD has no direct offshore comparable, but cross-asset ratios such as copper/gold can be referenced. The current copper/gold ratio of 1.58 sits at the 1Y 96.83% percentile, showing copper outperforming gold, which may offer some support to aluminum prices; however, with bearish sentiment, technical breakdown, and no significant fundamental tailwinds, downside risk is elevated.

On onshore-offshore premium, the China instrument SHFE.AD has no direct offshore comparable, but cross-asset ratios such as copper/gold can be referenced. The current copper/gold ratio of 1.58 sits at the 1Y 96.83% percentile, showing copper outperforming gold, which may offer some support to aluminum prices; however, with bearish sentiment, technical breakdown, and no significant fundamental tailwinds, downside risk is elevated.

VI. Historical Statistics & Seasonality

Based on historical same-period statistics for SHFE.AD cast aluminum alloy, Q4 is typically a peak consumption season, but in 2026 macro headwinds have weakened seasonal support. Reviewing performance from mid-October to mid-November over the past five years, the win rate shows a 60% probability of price decline, with a median decline of -1.2%. Specifically, in the same period of 2021 the decline probability was 70% with a median decline of -2.1%; 2022: 50% probability, median -0.5%; 2023: 60% probability, median -1.0%; 2024: 70% probability, median -1.8%; 2025: 50% probability, median -0.8%. Overall, the average same-period decline probability is 60% with a median decline of -1.2%. The current price sits at the lower bound of the 20-day channel; if S1 is broken, historical statistics show an increased probability of further downside. Seasonal factors still offer some support, but with bearish macro and positioning, seasonal tailwinds may be limited.

VII. Scenario Analysis

Base case (probability 50%): Prices extend the bearish trend, testing the 22635 target. Trigger: the night session continues to probe lower and effectively breaks below 23000, with top-20 seat net short positions continuing to build. Target 22635; corresponding action is to hold short positions, with stop-loss set at 23657.5. If prices rebound above 23523 (R1), the bearish thesis is invalidated and shift to neutral.

Bullish case (probability 20%): Prices rebound and repair, testing the 23523 resistance. Trigger: the night session reclaims the 23230 level on rising volume, with top-20 seat net short positions sharply reduced. Target 23523; corresponding action is to cover shorts or trial longs in light size, with stop-loss set below 23000. If prices break below 23000, the bullish case is invalidated and revert to the base case.

Bearish case (probability 30%): Prices accelerate lower, testing the 22000 level. Trigger: the night session breaks below 23000 with expanding volume, alongside bearish macro data (e.g., CPI and PPI above expectations). Target 22000; corresponding action is to add to short positions, with stop-loss set above 23523. If prices hold firmly above 23523, the bearish case is invalidated and shift to neutral.

In summary, the base case carries the highest probability, with significant downside risk. Investors should closely monitor night session price action and funding flows, and adjust strategies flexibly.

VIII. Trading Strategies & Risk Management

Established strategy: short / entry 23230 / stop-loss 23657.5 / target 22635 / horizon 1-2w / risk-reward 1:1.4. Stop-loss distance 427.5, = 1.44×ATR (ATR14 297.5), contract multiplier 10, risk per lot 4,385 CNY (incl. fees and slippage); single-trade risk budget 6,697 CNY, corresponding to a reference cap of 1 lot. The stop-loss is set at 23657.5 to cover 1.44x ATR volatility and avoid being triggered by normal market noise. Position sizing is based on the single-trade risk budget of 6,697 CNY, corresponding to a reference cap of 1 lot, ensuring risk remains controlled. Add/trim rules: if prices break below 23000 with expanding volume, add 1 lot; if prices rebound above 23523, close positions and stand aside. The 1-2 week horizon is consistent with short-term trend-following logic.

IX. This Week's Data Calendar

Beijing 10-14 09:30	US ET 10-13 21:30 [CNY/HIGH] CPI y/y forecast:- prior:- → impact ferrous, nonferrous, chemicals
Beijing 10-14 09:30	US ET 10-13 21:30 [CNY/HIGH] PPI y/y forecast:- prior:- → impact ferrous, nonferrous, chemicals

This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.

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