22nd August 2025
Markets traded cautiously today across commodities as sentiment remained divided between geopolitics, economic data, and upcoming policy signals. Energy contracts found mixed direction, while metals and bulk commodities continued to grapple with the balance between supply and demand fundamentals.
*Coal*
Coal prices continued to fall again today with the API2 swaps down most and these by around $1.50 across the curve. European gas prices were less volatile than yesterday but did continue to see support, ending the day around .5% higher. Both physical DES ARA and Newcastle markets saw slightly better offers also helping the swaps weaken.
*Brent Crude*
Brent crude was rangebound today as conflicting forces kept prices steady. Hopes of a peace deal between Russia and Ukraine faded further after Moscow launched fresh air strikes and Kyiv reported hitting both a Russian oil refinery and the Unecha oil pumping station. A larger-than-expected drawdown in U.S. crude stockpiles—down 6 million barrels last week—provided some support, pointing to strong demand. However, weak economic data from Germany, showing a 0.3% contraction in the second quarter, partially offset the bullish impulse, raising concerns about oil demand in Europe.
Spot Brent at 16h57 BST – $67.72/bll, up 0.09%
*European LNG*
European natural gas prices firmed as peace prospects between Russia and Ukraine dimmed, keeping geopolitical risk elevated ahead of the winter heating season. Benchmark futures edged higher today and are set to gain around 8% this week after earlier declines on hopes of a deal. The market also faces supply-side pressure from upcoming maintenance in Norway, a critical gas supplier, which will tighten near-term flows. Traders noted that higher European prices may be needed to secure LNG cargoes and prevent diversions to Asia. Storage across the bloc remains just under 75%, well below the 90% levels seen this time last year, leaving Europe more vulnerable as colder months approach.
Spot Dutch TTF Gas at 17h00 BST – €33.34/MWh, up 0.25%
*Iron Ore*
Iron ore prices softened as supply remains resilient while demand from steel mills shows signs of weakening. On the Dalian Commodity Exchange, the most active January contract slipped 0.8% to CNY769.5/ton. North China steel producers are gradually implementing environmental restrictions, including blast furnace shutdowns, trimming hot metal output slightly. However, these measures are limited in scope and duration, leaving overall supply conditions relatively robust. Market participants expect iron ore to remain under pressure, though not facing a steep decline, with weather conditions in northern regions likely to play an important role in steel production in the week ahead.
Spot TSI 62% iron ore fines on SGX at 17h00 BST – $101.80/mt, up 0.59%
*Copper (LME)*
Copper extended its rally into a third session on Friday, supported by firm Chinese demand and anticipation of monetary policy guidance from the U.S. Federal Reserve’s Jackson Hole symposium. The Yangshan copper premium, a key gauge of Chinese appetite for imports, has climbed 13% since mid-August to $51/ton, underscoring steady consumption. While refined copper remains exempt from U.S. tariffs, providing relief to global demand, gains were capped by a stronger dollar as several Fed officials pushed back against expectations of a September rate cut. Traders remain focused on Fed Chair Powell’s speech for further clarity on the U.S. rate outlook.
LME 3-month copper at 16h52 BST – $9794.50/mt, up 0.73%
Commodity markets remain sensitive to shifting geopolitical headlines and macroeconomic indicators. With Jackson Hole in focus for monetary cues and supply risks persisting across energy and metals, volatility is expected to stay elevated into the new week.
