*Coal*
The coal market continued its downward trend, with prices across major indices showing declines, reflecting subdued sentiment.
*Brent*
Brent crude oil futures climbed to $80.76 per barrel, the highest since October, amid concerns over impending US sanctions on Russian oil supplies. These measures, targeting vessels, firms, and executives, could disrupt supply chains and strain maritime insurance markets. Indian refiners are reportedly preparing for potential impacts, heightening fears of tighter global supplies.
*TTF Gas*
European natural gas futures fell over 12% this week to €44/MWh, the lowest since mid-December, despite cold weather. Forecasts of milder temperatures and stable storage levels at 70% (down from 83% last year) offset concerns. Norway’s Kollsnes plant maintenance continues until January 11, while earlier price spikes above €50/MWh were driven by halted Russian flows and fears of rapid storage depletion.
*Iron Ore*
Iron ore futures edged higher Friday, supported by China’s stimulus measures, but logged a weekly decline due to seasonally weak demand. The most-traded May iron ore on DCE rose 0.4% to 753.5 yuan ($102.76), while Singapore’s February contract steadied at $97.05/ton. Blast furnace capacity utilisation fell for the eighth week to 84.24%. Prices saw a modest rebound with improved sentiment and demand, but fundamentals remain weak, limiting potential gains.
*Copper*
Copper futures rose 0.2% to $9,086 per tonne on Friday, marking their strongest weekly performance since May last year. The rally was buoyed by optimism that China, the world’s largest copper consumer, will ramp up monetary and fiscal stimulus to support economic growth. Expectations of robust demand from electric vehicles and renewable energy technologies further bolstered prices. However, investor sentiment remained cautious amid rising global trade tensions and fears of a manufacturing slowdown, as incoming US President Donald Trump’s tariff policies loomed.
The market continues to feel the effects of a rare short squeeze in May 2024, triggered by ultra-low COMEX copper inventories. The squeeze pushed the LME-COMEX price spread above $1,000/mt, prompting traders to ship copper to US warehouses, gradually replenishing stocks. By January 2025, speculative activity and tariff-related uncertainties widened the COMEX premium over LME to $600/mt, despite weak fundamentals and record inventories. As traders leveraged inter-market arbitrage strategies, the price spread is expected to narrow further, while logistical constraints and limited deliverable sources in China continue to restrict opportunities for arbitrage.
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