16th January 2025
Coal
API2 coal prices continued their recovery, gaining momentum intraday before easing slightly in the afternoon. The resilience in API2 swaps suggests a decoupling from European gas prices, which were down approximately 1.5% for the front month.
In contrast, the physical Newcastle coal market remains relatively weak, though buying interest in NEWC swaps drove gains relative to other indices. This highlights a divergence between physical and paper markets, with traders possibly positioning for stronger demand or supply concerns in the near term.
Brent
Oil prices dipped below $81 per barrel on Thursday as geopolitical tensions eased following a ceasefire agreement between Israel and Hamas. The deal, though not yet implemented, marks a potential end to 15 months of conflict. Markets also reacted to U.S. sanctions on Russian crude and speculation that President-elect Donald Trump might adjust these restrictions.
Countries like India and China are seeking additional supplies from Saudi Arabia to offset potential shortfalls caused by sanctions. Traders are also monitoring changes in U.S. policies, including tariffs on Canadian oil and strategies to boost domestic production, ahead of Trump’s inauguration.
Dutch TTF Gas
Natural gas prices fell to €46.28 per megawatt-hour at 16:45 GMT due to steady supply and forecasts of higher wind and solar output. However, colder-than-normal temperatures in northwest Europe and weak wind power generation until January 24 are expected to increase demand.
Gas storage levels are lower than last year (65% full compared to 77% in 2024). Meanwhile, the EU is considering sanctions targeting Russian LNG imports, although pipeline imports have significantly decreased. Analysts predict ongoing volatility in the TTF market due to geopolitical concerns.
Iron Ore
SGX TSI 62% iron ore futures climbed above $100 per ton, driven by optimism over Chinese stimulus measures and concerns about disrupted shipments from Australia due to a cyclone.
China’s Ministry of Commerce announced plans to boost consumption and stabilize foreign trade, while strong steel mill restocking ahead of the Lunar New Year supported demand. Shandong transaction prices for PB fines rose to 785–790 yuan/mt, with Tangshan prices reaching 810–815 yuan/mt. Despite this, future demand is expected to weaken, limiting further price increases.
Copper
Copper prices rose, with LME three-month copper trading at $9,245 per metric ton. Prices have been supported by Chinese restocking and a reduced production outlook in Chile, which now forecasts 5.54 million tons of copper production by 2034.
Shanghai copper inventories have dropped significantly, while refined copper imports in China hit a 13-month high in December. The Yangshan copper premium, indicating import demand, reached a 12-month high in January. Secondary copper raw material prices in China increased by 300 yuan/mt month-on-month, reflecting robust market activity.
