27th February 2025
Coal
Despite the surge in gas prices, API2 coal swaps ended the day largely unchanged, highlighting the ongoing weakness in coal fundamentals, which have remained disconnected from gas market dynamics for some time. Meanwhile, Newcastle swaps, which had seen strong buying earlier in the week, retreated as Asia-Pacific physical coal prices continued to decline.
Brent Crude
Crude oil prices climbed today as President Trump revoked Chevron’s license to operate in Venezuela, effectively removing over 25% of the country’s crude exports from global markets. This benefits OPEC+ should they opt to raise production but adds pressure on U.S. refiners facing higher procurement costs. However, upside momentum was limited by ongoing Russia-Ukraine peace negotiations, which could increase crude and gas flows to Europe. Additionally, EIA data showed a surprise build in U.S. fuel inventories, with gasoline and distillate stocks rising while crude stockpiles fell unexpectedly. At 15h14 GMT, Brent was up 1.5% to $73.67, while WTI gained 2.25% to $70.16.
Dutch TTF Gas
European natural gas prices rebounded over 7.5% today but remain more than 6% lower for the week after a sharp 13% drop in the past two sessions. The recovery comes as concerns mount over a potential U.S.-EU trade dispute, which could drive up LNG costs, especially with the U.S. being Europe’s primary supplier. Trump has threatened 25% tariffs on EU imports, including automobiles, starting April 2. Despite today’s rally, gas prices remain 25% below February’s peak of €59, with mild weather, easing EU storage mandates, and U.S.-led Ukraine peace talks keeping the market under pressure. At 15h36 GMT, Dutch TTF gas was trading at €44.49, up 7.39%.
Iron Ore
Iron ore futures continued to soften, with the most-traded DCE I2505 contract closing at 805 yuan/mt, down 0.8%. Market sentiment remained moderate as traders followed broader trends, while steel mills made cautious, selective purchases. PB fines in Shandong traded at 803-808 yuan/mt, down 0-5 yuan/mt, while Tangshan prices settled at 815 yuan/mt, down 5 yuan/mt from yesterday’s high. With industrial data support and anticipation ahead of the Two Sessions, sentiment remained cautious, and prices are expected to fluctuate within a range. At the Singapore Exchange, 62% Fe TSI iron ore futures traded at $105.60, down 0.14% in the PM session.
Copper
Copper prices edged higher as President Trump ordered an investigation into potential new tariffs on copper imports, aiming to curb China’s growing influence in the global copper market. The U.S. currently imports about 45% of its copper needs, making the probe a potential game-changer. Analysts see additional upward pressure on copper prices, supported by strong demand from electrification trends and constrained supply due to years of underinvestment in mining. At 15h36 GMT, LME 3-month copper was down 0.76% to $9,388/tonne, while COMEX copper futures inched up 0.26% to $4.59/lb.
