Coal
Newcastle coal futures remained below $142 per tonne in November, continuing to hover near their lowest levels since late September. This reflected abundant coal supply from China and increased availability of alternative energy sources. Recent data showed a 4.6% year-on-year rise in Chinese coal production in October, following the completion of safety inspections at major mines. In addition, heavy rainfall in Yunnan boosted hydroelectric power generation, reducing reliance on coal. Nevertheless, robust coal demand this year has kept prices 25% above their March lows, with Chinese thermal power generation up nearly 10% year-on-year in September. Coal imports surged 13% during the same period, reaching a record high of 47.6 million tonnes, underscoring strong demand despite economic uncertainties.
Natural Gas
European natural gas futures eased to below €47.5 per megawatt-hour, retreating from the recent one-year high of €48.7. The pullback was supported by improved LNG export capacity from the United States, offsetting risks of Russian supply disruptions. While gas flows from Russia through Ukraine remained stable this week despite contract disputes, low requests through Austria and Slovakia have persisted, keeping supply risks in focus. Further uncertainty surrounds the continuation of flows through Ukraine, which are due to end in December amid the ongoing Russia-Ukraine conflict.
Iron Ore prices for 62% iron content steadied around $102 per tonne after reaching a six-week low in mid-November. Optimism emerged over potential demand recovery in China, supported by a slight uptick in steel production, which reached 81.9 million tonnes in October. Exports also rose to 11.2 million tonnes during the month, the second highest on record, as mills sought international markets to balance domestic capacity. However, concerns about rising global protectionism and accusations of dumping by China have tempered optimism, posing challenges for the world’s top steel producer.
Copper futures fell below $4.10 per pound, extending losses as a stronger US dollar weighed on the market. The dollar’s strength was driven by expectations of inflationary pressures under the policies of US President-elect Donald Trump, which could limit the Federal Reserve’s scope for rate cuts. Additionally, concerns about insufficient stimulus measures in China added to the cautious outlook for copper demand. Investors are now awaiting the People’s Bank of China’s upcoming decision on medium-term lending facility rates. Meanwhile, copper inventories in China have declined, with supply now below August levels, despite smelter output reductions.
Lithium carbonate prices rose to CNY 79,000 per tonne, rebounding from October’s three-year low of CNY 71,000. The recovery was driven by supply constraints and stronger demand, supported by Chinese government subsidies for electric vehicles. These measures aim to incentivise the replacement of older vehicles, boosting demand from battery manufacturers. Despite historically high stock levels, fears of trade disruptions as Trump prepares to assume office have accelerated restocking activity. Supply has also tightened due to mine closures and cost-cutting in Australia and China, with cumulative curtailments reaching 190 tonnes since 2023.
