15th January 2025
*Coal*
API2 coal futures saw volatile trading, falling over $2 intraday before recovering slightly by the close, despite DES ARA physical markets trading lower. Newcastle (NEWC) swaps also declined, even as physical Newcastle February 2025 cargoes traded higher.
The Chinese Coal Transportation and Distribution Association announced plans to increase output by 1.5% to 4.82 billion tonnes by 2025, citing expanded mining capacity to address risks from carbon limits and mine shutdowns. This comes as utilities grapple with record coal inventories, up 12% in the two months ending October. Demand remains under pressure from high rainfall in key Chinese manufacturing hubs, favouring hydroelectric power over coal.
*Brent*
Brent crude reached a 20-week high at $81.44/bbl, gaining 9.87% over four weeks and 3.73% year-on-year. Prices were buoyed by U.S. sanctions targeting Russian oil producers and tankers, potentially disrupting supply. However, API data showing a 2.6 million-barrel draw in U.S. crude stocks fell short of the 3.5 million-barrel expectation, moderating gains.
Ole Hansen of Saxo Bank noted, “Tankers carrying Russian crude face challenges unloading globally, creating short-term tightness.” Market uncertainty persists as traders assess the sanctions’ impact. Brent futures edged up 1% to $80.50/bbl on expectations of U.S. Federal Reserve rate cuts that could stimulate oil demand.
*Dutch TTF Gas*
European natural gas futures fluctuated amid reports of potential EU sanctions phasing out Russian LNG. Dutch TTF gas closed at €47.035, up 0.19% as of 16:15 GMT. Cold weather forecasts for north-west Europe, combined with low wind power generation until January 24, are expected to boost gas demand.
Despite diversification efforts, Europe’s reliance on LNG remains significant, with colder temperatures accelerating withdrawals and increasing competition with Asia for supply.
Further Reading if you are interested to learn more about the European gas markets transition away from dependence on Russian LNG supply LNG Market in Flux: Europe and Asia Compete for Supply | OilPrice.com
*Iron Ore*
Iron ore hit a two-week high at $99.99/mt, supported by optimism over Chinese stimulus measures. Annual Chinese imports reached a record 1.24 billion tonnes in 2024, while steel exports hit 110.7 million tonnes, the highest since 2015.
China’s I2505 futures rose 0.71%, closing at 782.5 yuan/mt. PB fines traded at 780–785 yuan/mt in Shandong and 800–805 yuan/mt in Tangshan. With minimal inventory pressure and improving steel mill profits, iron ore prices are expected to remain strong in the short term.
*Copper*
Copper prices fluctuated, with LME copper dipping below $9,100/mt during the Asian session before rebounding to $9,160/mt by 16:45 GMT as the dollar slowed. SHFE copper closed at 75,430 yuan/mt, driven by cautious trading ahead of U.S. inflation data.
Increased smelter activity and strong Chinese imports of 559,000 tonnes of unwrought copper in December, the highest in 13 months, supported the market. Chinese copper futures (I2505) rose, with mainstream transaction prices stable in Shandong and Tangshan.
