18th June 2025
*Coal*
Another volatile trading session in energy markets—albeit less extreme than earlier in the week—as developments in the Middle East continued to steer sentiment. European gas prices extended yesterday’s rally through the morning, providing upward momentum for both API2 and NEWC coal benchmarks. However, a sharp afternoon reversal in oil and gas prices weighed on sentiment, with API2 ending the day slightly lower and NEWC settling just modestly higher.
*Brent Crude*
Oil prices briefly touched a five-month high early Wednesday as tensions between Israel and Iran escalated, with reports suggesting the Trump administration may intervene to dismantle Iran’s nuclear capabilities. Brent has gained 10% since Israel’s surprise strike last week, and both nations continue to exchange aerial attacks. President Trump has called for Iran’s unconditional surrender, heightening geopolitical risks. Meanwhile, U.S. industry data points to a significant draw of over 10 million barrels in crude stocks last week—potentially the largest drop since last summer. Despite the rally, Brent crude for August settled at $75.16/bbl, down 1.74% on profit-taking.
*European LNG (Dutch TTF Gas)*
European gas prices climbed for a sixth consecutive session, hitting €40/MWh—the highest since early April—as geopolitical risks mount. Concerns about potential disruption to the Strait of Hormuz, through which 20% of global LNG flows, intensified after Qatar instructed some vessels to delay transits. While southbound traffic continues, several northbound tankers remain on standby, fuelling market jitters. A regional heatwave is also boosting demand for air conditioning, adding upward pressure. However, prices eased slightly by the afternoon, with Dutch TTF futures down 1.36% at €38.79/MWh.
*Iron Ore*
Iron ore futures slipped to near six-week lows at CNY 694/tonne as seasonal demand softness and production curbs at Chinese steel mills weighed on sentiment. Heavy rains in the south and extreme heat in the north disrupted construction and industrial activity, while May’s steel output fell 6.9%, reflecting Beijing’s push to address overcapacity. Global uncertainty—including stalled Fed rate cut expectations and Middle East conflict—also dampened risk appetite. Still, SGX July 62% Fe futures edged up 0.22% to $92.80/mt by late afternoon.
*Copper (LME)*
Copper prices remained steady, underpinned by critically low inventories and a tight physical market. LME stocks have plunged over 60% since March, keeping the market in backwardation and signalling robust short-term demand. Despite this, trading activity and open interest remain muted, with investors cautious amid ongoing geopolitical volatility. Attention is now turning to the LME’s planned warehouse opening in Hong Kong, which could reshape regional flows. LME 3-month copper traded at $9,677.50/mt at 16:02 BST, up 0.10%.
#Commodities #Oil #NaturalGas #IronOre #Copper #Geopolitics #Markets #EnergySecurity #MiddleEast #LNG #Trading #MacroInsights
