3rd December 2025
Markets midweek reflected a complex mix of geopolitical tension, shifting policy signals, and seasonal expectations. Key commodities showed divergent movements as traders balanced immediate supply risks with broader macroeconomic trends heading into year-end.
Coal
Coal prices remained volatile, with declines recorded across the major indices. NEWC posted the sharpest drop, and physical Newcastle offers continued to soften. European gas markets were comparatively steady, ending the day almost unchanged. Oil found firmer footing, with front-month Brent crude rising close to 1%, supported in part by escalating tensions between the US and Venezuela.
Brent Crude
Brent crude firmed on Wednesday as geopolitical risks regained prominence. Talks between the United States and Russia have yet to yield progress on ending the war in Ukraine and strikes on Russia-linked vessels continued to unsettle markets. Moscow signalled it may target ships belonging to countries supporting Ukraine if attacks on its fleet persist, heightening concerns over maritime crude flows. Tensions in Venezuela added further strain after President Donald Trump declared the country’s airspace “closed,” increasing the risk of supply disruption from a key producer. Sentiment was also buoyed by the American Petroleum Institute’s forecast of a 2.8-million-barrel draw in US crude inventories, suggesting firmer demand.
Iron Ore
Iron ore futures softened, with the DCE I2601 contract closing at 799.5 yuan, down 0.19% on the day. Trading remained cautious as mills bought only what they required, and traders largely sold at market levels. Limited availability of older-vintage PB fines supported spot prices, though 60.8% PB fines were unchanged from Tuesday. With planned production adjustments pointing to weaker demand ahead, the downward pressure is expected to build next week. Nonetheless, year-end policy expectations still lend some support, keeping prices within a narrow trading range for now.
Copper (LME)
London copper prices set fresh record highs today, supported by expectations of a Federal Reserve rate cut in December, tightening global supply, and a softer US dollar. The LME benchmark has risen more than 30% this year, while US futures have climbed even further amid speculation that the Trump administration may move ahead with tariffs on primary copper. Anticipation of future levies has already driven a surge of shipments into the United States, pulling material away from other regions. ANZ Research noted that several traders are seeking long-term US supply agreements with Chilean producers for 2026, at premiums exceeding $500 per tonne above LME prices. After initially signalling broad copper tariffs in February, Trump later said in July that duties would be limited to value-added products, though the administration continues to review whether to include commodity-grade copper. The uncertainty has prompted renewed stock-building at US ports and record premium announcements from producers supplying Europe and Asia, as buyers effectively compensate for the higher returns available in the US market.
With geopolitical pressures still unresolved and policy developments looming, volatility is likely to persist across energy and metals. Traders will continue to watch supply signals and political developments closely as the market positions itself for the final stretch of the year.
