20th May 2025
*Coal*
It was a strong day across the energy complex, with European gas prices jumping 5% and API2 coal gaining over $3/mt on the prompt. Newcastle coal matched API2’s strength, though the rally appeared to be driven more by genuine hedging activity than by simply tracking European benchmarks. Momentum across the board reflected a renewed bid tone, with markets responding to tightening supply dynamics and shifting risk sentiment.
Brent Crude
Brent crude futures hovered around $65/bbl on Tuesday as traders weighed geopolitical tensions and macroeconomic signals. Comments from Iran’s Deputy Foreign Minister dampened optimism over US-Iran nuclear talks, warning that negotiations would “lead nowhere” if Washington insists on a total halt to uranium enrichment. Meanwhile, a call between US President Trump and Russian President Putin concluded without concrete progress on a Ukraine ceasefire, raising doubts about the US’s future mediation role. A sovereign credit downgrade for the US by Moody’s added pressure, darkening the outlook for demand in the world’s largest oil consumer. In China, slower industrial output and retail sales further clouded the demand picture. July Brent was last down 0.53% at $65.19/bbl at 15:44 BST.
Dutch TTF Gas
European natural gas prices gained sharply, with Dutch TTF futures last up nearly 5% at €36.82/MWh. Hopes for a breakthrough in Ukraine peace negotiations faded after a two-hour call between Presidents Trump and Putin ended without agreement on a ceasefire. The possibility of resumed Russian gas flows to Europe now looks less likely, clashing with the EU’s strategy to eliminate Russian fossil fuel reliance by 2027. Compounding supply concerns, Norway’s Kollsnes gas plant began early maintenance, with further flow reductions scheduled through May 22. On the global LNG front, recent cargoes originally bound for Asia are being diverted, but emerging demand from Southeast Asia—namely Thailand, Vietnam, and the Philippines—may absorb excess supply, tightening the market going forward.
Iron Ore
Iron ore futures rose modestly on Tuesday, supported by firm steel mill demand despite uninspiring macro data from China. DCE’s most-traded I2509 contract closed up 0.28% at CNY 725, after rebounding from early losses. Chinese crude steel output dipped 7% in April from March, but output remains high overall. Traders were selectively active, while stronger steel sales encouraged restocking among mills. Sentiment was tempered by slower-than-expected Chinese factory and retail growth and persistent weakness in the housing market. Still, steel trading volumes improved, and mills raised offer prices. SGX TSI 62% Fe July futures were last up 0.31% to $98.65/mt.
Copper
LME copper prices fell on Tuesday amid rising concerns over a potential supply glut and deteriorating demand signals. The three-month LME contract dropped 0.66% to $9,509/mt by 14:44 BST. Weaker-than-expected Chinese economic data weighed heavily, with industrial output and retail sales both slowing in April, and property investment falling 10.3% year-on-year. Copper sentiment was also dampened by a surge in US domestic inventories and ongoing uncertainty around Washington’s trade policy. A US investigation into potential tariffs on copper imports prompted foreign traders to unwind long positions on CME futures, narrowing the spread between US and LME contracts. The flow of metal into the US ahead of potential duties pressured prices further. Meanwhile, Yangshan copper premiums declined slightly, suggesting cautious import demand from China.
