21st February 2025
*Brent Crude*
Brent crude is on track for a 1.5% weekly gain, driven by Russian supply disruptions and improving US and Chinese demand. A Ukrainian drone strike reduced Caspian Pipeline Consortium flows by 30%-40%, though record production from Kazakhstan helped offset losses. In the US, crude inventories rose, but gasoline and distillate stocks declined due to seasonal refinery maintenance. Meanwhile, geopolitical tensions eased after Ukraine signalled a willingness to negotiate, and US Treasury Secretary Bessent suggested Russia could receive sanctions relief if talks progress. Global oil demand averaged 103.4 million bpd as of February 19th. Brent crude last traded at $75.15, down 1.75% at 15h32 GMT.
*Dutch TTF Natural Gas*
With European gas storage at 43%, meeting the EU’s 90% target by November is becoming increasingly difficult. In response, Germany, France, and Italy are pushing to ease storage mandates to stabilize prices and reduce short-term supply pressure. Warmer weather and increased LNG imports have slowed withdrawals, but supply remains tight, with major LNG infrastructure expansion not expected until 2026. Meanwhile, uncertainty over Russian gas flows continues, while diplomatic efforts to resolve the Ukraine conflict remain uncertain. Dutch Gas TTF futures are down 1.4% at €46.76 as of 15h45 GMT.
*Iron Ore*
Iron ore futures continued to climb, with the most-traded contract closing at 838.5 yuan/mt, up 1.51% on the day. Traders were active sellers, while steel mills selectively locked in profits, indicating moderate buying interest. In Shandong, PB fines traded at 830-835 yuan/mt, up 1-5 yuan/mt, while in Tangshan, prices remained stable at 840-845 yuan/mt. Market optimism persists ahead of China’s Two Sessions, but with iron ore prices already elevated, further gains may face resistance. TSI 62% Fe iron ore futures on SGX were last at $108.15 for the March contract.
*Copper*
Base metals ended the week higher, supported by trade war concerns and a weaker US dollar. Copper rose 0.7% on the week, while aluminium gained 2.3%. North American copper production was 5% below 2024 guidance, with 2025 forecasts also trailing consensus, reflecting cautious miner outlooks and operational challenges, according to RBC Capital Markets. Improving US-China relations offer constructive support for metals, reinforcing positive sentiment. Meanwhile, China has imposed restrictions on copper smelting due to overcapacity, leading to higher copper imports and declining inventories, though smelters face profitability challenges. LME 3-month copper is down 0.10% at $9,543 as of 16h00 GMT.
*Lithium Carbonate*
Lithium carbonate prices declined toward CNY 76,000 per tonne after hovering near a one-month high of CNY 77,900. Although EV sales in China picked up as new government incentives took effect, high battery inventories have limited demand for fresh supply contracts. Lithium miners continue production to maintain market share and business relationships, preventing a deeper price correction.
