US 10-Year Yield Hits 5% as Aluminium Prices Consolidate
The 10-year US Treasury yield breached 5.00%, a level unseen since 2023. This move pressured aluminium futures to hold steady near recent highs rather than break out.
The 10-year US Treasury yield rose above the 5.00% threshold on Monday. This marked the highest level for this benchmark since 2023. Global bond markets faced broad selling pressure due to inflation concerns and supply dynamics.
SHFE aluminium futures closed at RMB 23,990 per tonne. The price fell RMB 15 from the previous settlement. LME aluminium 3-month contracts closed at USD 3,252.50 per tonne, up 0.03%.
Yields and Technical Resistance
Rising yields increased the discount rate for non-yielding commodities. This factor limited upside potential for base metals. SHFE aluminium traded below its 5, 10, and 30-day moving averages. These levels formed immediate technical resistance for buyers.
The MACD indicator showed weakening bullish momentum on both exchanges. The DIF line remained below the DEA line. This configuration suggests that the short-term upward structure is facing significant headwinds.
Geopolitical and Inventory Factors
US President Trump stated he is open to negotiations with Iran. He claimed Iran is desperate to reach a deal on oil shipments. The IRGC Navy reported a supertanker struck a mine near the Strait of Hormuz.
These events added a geopolitical risk premium to energy and shipping costs. LME aluminium inventories stood at 245,000 tonnes. This remains an extremely low historical level for the global exchange.
China Liquidity and Demand
The People's Bank of China conducted a 500 billion RMB reverse repo operation. This amount matched the maturing bonds, ensuring neutral liquidity conditions. This was the second consecutive month of equal-amount rollover.
Aluminium ingot inventories in major Chinese consumption areas fell to 776,000 tonnes. This represented a drop of 20,000 tonnes during the week. The destocking trend continued amid the September peak season demand.
