05th February 2025
*Coal*
There was continued weakness in coal prices this morning, with recent bearish momentum still in play. However, prices recovered throughout the day, supported by a rebound in European gas prices during the afternoon. This lifted API2 swaps slightly higher, while front-month gas ended the day around 3% up. Meanwhile, physical Newcastle markets remained soft, keeping shorter-dated NEWC swaps under relative pressure.
*Brent*
The EIA reported a larger-than-expected build in U.S. crude inventories, putting significant pressure on oil benchmarks. Both WTI and Brent dropped over 1% following the report, which showed U.S. crude stocks surged by 8.7 million barrels for the week ending January 31st. Brent crude initially traded at $75.12 per barrel after the release but fell further to $74.57 by 16h30 GMT, marking a decline of over 2%.
*Dutch TTF Gas*
European natural gas prices rebounded after falling more than 3% in the previous session, as traders assessed the impact of China’s retaliatory tariffs on U.S. LNG imports. The move is expected to redirect more U.S. gas to Europe, easing concerns over tightening inventories. European gas storage levels have now fallen below 53%. Dutch TTF gas futures were up 2.14% at €53.44 as of 16h40 GMT.
*Iron Ore*
Iron ore (62% Fe) surged above $105 per tonne, its highest level in over a month, driven by supply disruptions and strong demand expectations. Cyclones in Australia forced Rio Tinto to clear ships from ports, exacerbating shipping delays after previous rail disruptions. Meanwhile, hopes of increased Chinese construction activity post-Lunar New Year were reinforced by Beijing’s commitment to fiscal stimulus and robust credit data. China’s steel exports hit a record 9.7 million tonnes in December, up 26% year-on-year.
In the Chinese market, the Dalian Commodity Exchange saw iron ore futures fall 0.99% to close at 801 yuan/mt. Traders were active post-holiday, with numerous steel mill inquiries, but actual transactions remained sluggish. PB fines traded at 790–795 yuan/mt in Shandong and around 815 yuan/mt in Tangshan, both stable compared to pre-holiday prices.
*Copper*
Copper rose to its highest price in over a week, supported by a weaker U.S. dollar. The LME 3-month contract was up 0.87%, trading at $9,241.50 as of 16h45 GMT. In China, smelter treatment charges remained uncertain, reflecting unpredictable short-term demand. Meanwhile, Beijing’s fiscal stimulus plans and rising credit demand lifted expectations for stronger industrial activity, further supporting copper prices.
