3rd June 2025
*Coal*
Coal prices were mixed today, with API2 showing initial strength while NEWC swaps remained subdued. European gas prices gained around 3% on the shorter-dated contracts, though this had limited influence on coal swaps. Meanwhile, physical Newcastle saw a modest uptick in buying interest, providing some support to the broader market tone.
*Brent Crude*
Brent crude extended gains to $65.72 per barrel on Tuesday amid rising geopolitical tensions and supply disruptions. Peace talks between Russia and Ukraine failed to deliver progress following escalated hostilities, keeping markets on edge. Iran signaled it may reject a proposed US nuclear deal, citing concerns over uranium enrichment terms, raising the prospect of prolonged sanctions. Meanwhile, a wildfire in Alberta temporarily halted some Canadian oil and gas output, adding to global supply concerns. OPEC+ held its July output hike steady at 411,000 bpd, easing fears of a larger increase. August Brent was up 1.69% at 15h57 BST.
*European LNG*
European natural gas futures climbed above €35/MWh, buoyed by tightening supply despite easing demand. Maintenance in Norway has cut flows by 14 mcm/day since Friday, and further outages could reach 100 mcm/day in the coming weeks. Ukraine’s renewed strikes into Russia before peace talks in Istanbul also dampened hopes of Russian supply returning. Storage levels remain low at 48.3%, and some LNG cargoes are being redirected to the Middle East to meet growing summer demand. Dutch TTF Gas rose 1.86% to €35.56/MWh by 16h00 BST.
*Iron Ore*
Iron ore futures dropped after the Chinese holiday, with the DCE September contract falling 1.14% to CNY 695.5/ton. Trade sentiment was cautious, and transaction volumes sluggish. In Shandong and Tangshan, PB fines fell by 5–10 yuan/mt to ranges of CNY 726–745/mt. The market remains pressured by weaker property sales and ongoing oversupply concerns. ANZ analysts highlighted investors’ caution over lacklustre demand recovery in China. Meanwhile, SGX 62% Fe futures for July ticked up 0.85% to $95.20/mt, offering limited support.
*Copper (LME)*
London copper prices were little changed on Tuesday, as a weaker dollar and declining inventories offset concerns over potential new US tariffs. Three-month copper on the LME edged up 0.17% to $9,630/mt by 16h00 BST. The dollar index fell to its lowest since late April, making dollar-priced commodities more attractive to non-US buyers.
Market sentiment remains cautious following President Trump’s announcement to double tariffs on aluminium and steel to 50% starting Wednesday, raising speculation that copper could be next. According to ANZ Research, US trade officials are reviewing the impact of copper imports, with a decision expected in the coming weeks.
In the US, COMEX copper futures dropped over 2% to $4.70/lb, reversing previous gains. The decline was driven by weak Chinese economic data—particularly a surprise contraction in May manufacturing activity, now at its lowest in over two years. The slowdown in China, the world’s top copper consumer, has intensified concerns over global demand, especially as new export orders decline amid ongoing trade tensions.
