17th January 2025
Coal
Coal prices continued their upward trajectory today, with strong buying interest driving gains across the market. The Newcastle (NEWC) swaps led the rally, supported by firm demand and positive sentiment.
European gas prices, which began the day weaker, reversed course and climbed steadily, with shorter-term contracts rising approximately 2%. This recovery in gas prices further bolstered the API2 coal swaps, which also ended higher.
In the physical market, Newcastle coal for February 2025 loading traded at levels slightly above those seen earlier this week, reflecting consistent interest from buyers and tight supply dynamics.
Brent Crude Oil
Brent crude futures fell below $81 per barrel on Friday, though they remained on track for a fourth consecutive weekly gain. Market sentiment was shaped by concerns over U.S. sanctions targeting Russian oil producers and tankers, heightening fears of supply disruptions. Investors are closely monitoring the impact of President-elect Donald Trump’s upcoming administration, as his Treasury nominee has indicated a stance towards tougher sanctions on Russia.
Expectations for a Gaza ceasefire, which may reduce disruptions from Yemen’s Houthi militia attacks on shipping in the Red Sea, also weighed on prices. Earlier in the day, oil found support from signs of easing U.S. inflation and stronger-than-expected economic growth in China, the world’s largest oil importer.
UBS analyst Giovanni Staunovo noted, “The oil market is in a bit of a wait-and-see mode, assessing potential supply disruptions following U.S. sanctions on Russia.”
Dutch Gas (TTF)
European natural gas prices dropped to €46 per megawatt-hour, reflecting stable supply conditions despite increased demand driven by colder weather forecasts for January 17–22. Lower wind and solar output predicted until January 24 also heightened gas requirements.
EU gas storage levels are 63% full, lower than last year’s 77%, though no immediate risk of shortages is anticipated. The EU is considering banning Russian LNG imports as part of potential new sanctions, even as Europe’s LNG imports from Russia hit record highs in 2024.
Despite falling prices, market sentiment remains cautious, with traders eyeing potential supply disruptions after the expiration of a Russia-Ukraine gas transit deal.
Iron Ore
Iron ore prices edged higher, with the most-traded I2505 contract on the Dalian Commodity Exchange closing at 797 yuan/mt, up 1.92%. Gains were driven by Chinese optimism following robust industrial data and positive macroeconomic indicators. Reports of a cyclone disrupting shipments from Australian mines added upward pressure on prices.
Despite the rally, analysts at Goldman Sachs expect it to be short-lived, as fundamentals remain weak due to falling Chinese steel demand, particularly in export-driven sectors that could face U.S. tariff challenges. Pre-holiday restocking by steel mills is nearing completion, suggesting limited upside for spot prices in the near term.
Copper
Copper prices reversed most of their previous gains, with LME three-month copper down 0.66%, closing at $9,173 per metric ton as of 16:00 GMT. Optimism remains bolstered by strong Chinese industrial output data, higher December copper imports, and restocking activities amid robust downstream demand.
Chile’s revised copper production forecast, down to 5.54 million tons by 2034 from the previous 6.34 million tons, added supply-side concerns. In China, futures closed at 76,390 yuan/mt, up 460 yuan/mt, while spot premiums fell slightly to 85 yuan/mt.
Copper traders are monitoring widening spreads between COMEX and LME contracts, which have reached historical highs, influencing U.S. market pricing trends.
