21st January 2025
*Coal*
The recent rally in coal prices continued unabated, with gains seen across indices, led by API2 contracts. European natural gas prices climbed sharply in the afternoon, with the front-month contract surging over 4% and nearing the €50 threshold again. Stronger bids in the DES ARA market further reinforced bullish sentiment for coal.
*Brent*
Oil prices weakened early on Tuesday as U.S. President Donald Trump declared a national energy emergency on his first day back in office. He postponed to February 1 the imposition of a 25% tariff on Canadian oil imports, which account for 60% of U.S. oil imports.
West Texas Intermediate crude for February delivery fell $1.98 to $75.90 per barrel, while March Brent crude declined $1.31 to $78.84 per barrel.
Despite the decline, Trump signed several executive orders to bolster the U.S. oil industry, including plans to increase production in Alaska, refill the Strategic Petroleum Reserve, and cut subsidies for electric vehicles.
Brent crude futures hovered around $79 as markets processed these policies. The planned tariffs on Canadian and Mexican imports tempered investor optimism, although specific measures targeting China, the world’s top oil importer, were deferred, keeping traders on edge. Meanwhile, geopolitical risks eased after a ceasefire and prisoner exchange deal between Israel and Hamas, adding to the downward pressure on prices.
*Dutch TTF Gas*
European natural gas prices rose above €49 per megawatt-hour as traders reacted to Trump’s early executive actions and increased seasonal demand. Notable measures included lifting the moratorium on U.S. LNG export permits, paving the way for more supply to Europe and Asia. Trump also urged the EU to buy more American energy to avert potential tariffs.
Meanwhile, Russian natural gas flows to Europe through Ukraine stopped after failed negotiations between the two governments. Although the IEA reported no immediate risks to EU gas supply security, the reliance on LNG imports is expected to rise by over 15% this year, tightening global market dynamics. EU gas storage currently sits at 60% capacity.
*Iron Ore*
Iron ore prices gained momentum, with benchmark February futures on the Singapore Exchange trading at $101.45 per ton as of 15:00 GMT. Average hot metal production among 247 Chinese steelmakers rose by 1,100 tonnes per day from the previous week, reflecting growing demand.
Chinese markets responded positively to Trump’s decision to delay tariffs at his inauguration, though caution remains about future U.S.-China trade relations.
The most-traded I2505 contract on the Dalian Commodity Exchange closed at 804.5 yuan per metric ton, up 0.56%. PB fines transactions in Shandong and Tangshan rose 5 yuan per metric ton compared to yesterday’s prices. Moderate restocking needs among steel mills and reduced blast furnace maintenance have supported demand. Improved steel export tariff policies further boosted sentiment, driving prices higher.
*Copper*
Copper prices advanced after reports from The Wall Street Journal indicated Trump would delay imposing tariffs on his first day in office. This provided a brief reprieve for commodity markets, which have been concerned about economic fallout from such measures. The three-month LME copper contract rose 0.1% to $9,281 by 17:15 GMT.
