18th September 2025
Commodities traded mixed today as markets reacted to the Federal Reserve’s rate cut and its implications for demand across energy and metals.
Coal
Newcastle swaps pushed higher again, with parts of the curve gaining close to $2. Strength in the physical Newcastle market underpinned sentiment and supported further upside. API2 swaps also found some support, tracking firmer gas prices, which lifted the front month by more than 1%.
Brent Crude
Brent crude was volatile today, bouncing between lows of $67.33/bll and highs of $68.41/bll, after the U.S. Federal Reserve cut its policy rate by 25 bps, citing labour market weakness. Policymakers signalled further cuts may follow before year-end, raising expectations that lower borrowing costs could spur economic activity and fuel demand. JP Morgan data showed global oil consumption averaged 104.4 mbpd up to 17 September, up 0.52 mbpd year-on-year, with 2024 demand growth so far at 0.8 mbpd, slightly shy of forecasts.
_Spot Brent at 16h30 BST – $67.48/bll, down 0.68%_
European LNG
European gas futures rose more than 1% despite mild, windy weather and steady LNG arrivals. EU storage is 80.4%, below last year’s 93.2%, with Germany at 75.1%, France at 89.9% and Italy at 90.1%. Maintenance at Germany’s Emden terminal begins Thursday and may tighten supply briefly. Geopolitics remain a key driver: Russia’s Arctic LNG 2 continues shipments to China, while U.S. President Donald Trump warned of new sanctions on Russian energy if NATO allies follow suit. Meanwhile, Gazprom reported a 23% year-on-year increase in exports to Türkiye from January to July 2025, reaching 12.741 bcm, and signed a deal with CNPC to boost Power of Siberia deliveries to 44 bcm annually. Longer term, Russia aims to expand flows to China by an additional 58 bcm per year through Power of Siberia-2 and the Far East route.
_Dutch TTF Gas at 16h30 BST – €32.94/MWh – up 1.46%_
Iron Ore
Iron ore futures eased, with the most-traded I2601 contract closing at CNY800/mt, down 0.12%. The Fed’s rate cut removed short-term macro tailwinds, softening sentiment. Fundamentals, however, remained supportive: demand for the five major steel products continued to recover, rebar inventories began destocking, and restocking needs ahead of the holiday could lift raw material consumption. Despite pressure from higher inventories, steel demand recovery is providing a floor, and ore prices are expected to stabilise and rebound in the near term.
_Spot 62% Fe iron ore on SGX at 16h30 BST – $105.10/mt, down 0.28%_
Copper (LME)
LME copper slipped as traders repriced borrowing costs after the Fed’s decision. The 25 bps cut to 4.00–4.25% marked the lowest policy rate in nearly three years, with officials signalling more cuts could follow in October and December. FedWatch now places the probability of another 25 bps cut in October at 87.7%. Profit-taking saw bulls exit positions after copper’s rally above $10,000/t, while LME inventories increased. In China, copper cathode supply remains tight as domestic smelters undergo maintenance, though higher imports may partly offset the deficit. African production cuts are expected to weigh on October supply.
LME 3-month copper at 16h30 BST – $9939/mt, down 0.57%
With the Fed signalling a path of continued easing, commodities remain anchored by shifting macro sentiment, supply dynamics, and geopolitics. Markets now look ahead to October for the next potential policy move and its impact on energy and metals demand.
