2nd June 2025
*Coal*
Coal prices rebounded today after last week’s late weakness. API2 led gains, buoyed by a 2% rise in short-dated European gas prices, which added bullish sentiment. API4 and NEWC also firmed in line with API2, despite the physical Newcastle market appearing slightly better offered.
*Brent Crude*
Oil prices rose sharply early Monday, with August Brent futures up 3.28% at $64.84 (15h50 BST), despite OPEC+ approving only a 411,000 bpd hike for July—falling short of market rumours suggesting a larger increase. The group continues to phase out 2.2 million bpd of voluntary cuts into an already oversupplied market. Saudi Arabia and Russia appear focused on reclaiming market share from U.S. producers while penalising quota violators like Kazakhstan.
Geopolitical tensions also supported prices. Ukraine launched drone attacks on four Russian military airports, destroying over 40 warplanes, while Russia retaliated with airstrikes. Both sides are set to meet in Istanbul for peace talks later today.
*European LNG*
European gas futures climbed 4% to €35.12/MWh on Monday, supported by tight supply and geopolitical risks. Maintenance in Norway has cut flows by 14 mcm/day, with further outages expected to reach up to 100 mcm/day. Ukraine’s strikes deep inside Russia ahead of the Istanbul talks dim hopes for resumed Russian supply. Meanwhile, Europe’s storage is just 48.3% full, and warmer weather has done little to offset concerns. Rising Middle East demand is also diverting LNG cargoes away from Europe.
*Iron Ore*
Iron ore edged up to CNY 710/tonne after rebounding from eight-month lows, helped by a U.S. court blocking President Trump’s reciprocal tariffs, supporting global manufacturing sentiment. However, prices are still down 10% YTD due to weak Chinese demand. Beijing may ban pre-sale of unfinished homes, tightening liquidity for property developers and hurting steel demand. Baosteel expects mainland output to drop by 50 million tonnes this year. Despite PBoC rate cuts and increased bond sales, market sentiment remains fragile. SGX TSI 62% Fe futures slipped 0.58% to $93.95/mt.
*Copper (LME)*
Copper surged nearly 6% Monday as a weaker dollar and tariff concerns spurred buying. COMEX July copper rose 5.8% to $4.949/lb ($10,887/tonne) after President Trump announced plans to double steel and aluminium tariffs from June 4. The EU condemned the move, warning it jeopardises trade negotiations. Copper may be next, with a U.S. probe underway into copper imports. COMEX prices now trade at a 10% premium to LME copper, reflecting potential U.S. duties. LME 3 month copper rose 01.36% to $9,622/tonne (16:28 BST). China’s markets were closed for the Dragon Boat Festival. The dollar weakened as traders assessed the inflation and growth risks posed by the expanding tariff strategy. Meanwhile, China’s factory activity contracted in May for a second month, raising expectations for fresh stimulus.
