12th March 2026
Prices at 17h30 GMT
Thermal Coal: March API2 $122.50/mt & API4 $111.00/mt
Brent Crude: $99.43/bll – Up 8.22%
SGX Iron Ore 62%Fe: $106.15/mt – Down 0.93%
LME 3-Month Copper: $12,970/mt – Down 0.58%
Commodity markets remained highly volatile as the conflict in the Middle East continued to disrupt energy flows and influence sentiment across the broader commodities complex. Energy markets led the moves, while industrial metals reacted more cautiously to a mix of macroeconomic pressures and supply-side developments.
Coal
Coal markets continued to track volatility across the broader energy complex. Oil prices opened higher following reports of additional tanker attacks in the Persian Gulf and finished the session around 8% stronger. European gas prices initially moved higher alongside oil but eased through the afternoon to close only marginally up.
Coal prices followed a similar intraday pattern, opening firmer before softening later in the session. Despite the afternoon pullback, Newcastle (NEWC) swaps remained materially stronger by the close, leaving parts of the forward curve notably higher.
Market volatility has also prompted structural changes in derivatives trading. The Intercontinental Exchange (ICE) raised margin requirements across all thermal coal contracts, with API2 Rotterdam futures margins increasing by roughly 31–42% in response to heightened price swings and increased trading activity following the outbreak of the US–Iran conflict. Liquidity in the API2 futures market has surged, with February volumes reaching a four-year high as financial markets moved in step with rising physical prices. The Argus NAR 6,000 kcal/kg CIF ARA benchmark also climbed to a one-year high during the month.
On the supply side, South African coal production fell to 16.33 million tonnes in December, down 5.7% year-on-year after heavy rainfall disrupted open-cast mining operations and logistics. Both export and domestic sales also weakened amid softer industrial demand from key importing markets.
Logistical challenges are also emerging in the Indonesian market. Traders report increasing difficulty securing vessels as bunker fuel costs rise sharply due to the Middle East conflict. Some shipowners have reportedly defaulted on charter agreements after failing to bunker in time or reach scheduled loading ports, adding further friction to the seaborne coal trade.
Brent Crude
Oil prices surged again on Thursday as the conflict in the Gulf intensified, with attacks on multiple cargo vessels and energy infrastructure adding to concerns over a historic disruption to global supply. Iran has reportedly targeted several commercial ships in the Persian Gulf in recent days, while Oman was forced to evacuate vessels from its main export terminal and Iraqi tanker operations were temporarily suspended following attacks offshore.
The International Energy Agency warned that the crisis has created the largest supply disruption in the history of the oil market. Production across Gulf producers has reportedly fallen by more than 10 million barrels per day due to the effective closure of the Strait of Hormuz, a key artery through which roughly one-fifth of global oil supply normally flows.
Although the IEA has announced the release of 400 million barrels from strategic reserves — the largest coordinated release on record — the measure has done little to calm markets. Traders increasingly fear that a prolonged disruption could tighten global supply significantly and push prices higher despite emergency stock releases.
The market is also grappling with broader economic implications. Rising energy prices have lifted inflation expectations and raised concerns about potential stagflationary pressures if the conflict persists. Oil market volatility has surged to its highest level in nearly six years, reflecting the extraordinary uncertainty surrounding supply flows and geopolitical developments.
Iron Ore
Iron ore futures strengthened during the session, with the most-active Dalian contract (I2605) closing 1.34% higher at 795.5 RMB per tonne. Spot prices also rose by 5–10 RMB compared with the previous day, although overall trading activity remained limited as steel mills maintained a cautious procurement strategy.
Port inventories at key Chinese terminals rose slightly during the week, reaching 118.99 million tonnes. However, there has been noticeable destocking of higher-grade products such as Carajás fines and PB lumps, indicating growing demand for higher-quality ores.
Market sentiment has also been influenced by increasing discussion around structural shortages of certain iron ore grades. As these concerns begin to translate into trading behaviour, iron ore prices are likely to remain relatively well supported in the near term despite subdued spot liquidity.
Copper
Copper prices extended their decline as a stronger US dollar and rising energy prices weighed on investor sentiment. Oil’s continued rally has revived inflation concerns, leading markets to reassess expectations for monetary policy and potentially delaying interest rate cuts by the US Federal Reserve.
Trade tensions also added to uncertainty after the Trump administration launched new investigations into several major trading partners, including China and the European Union, following recent tariff-related legal developments.
Despite the macro headwinds, some physical demand support emerged from China, where fabricators engaged in opportunistic dip-buying, particularly from the construction and renewable energy sectors. This helped limit downside pressure even as broader financial conditions weighed on prices.
Commodity markets remain heavily influenced by the evolving situation in the Middle East. Energy markets continue to dictate broader sentiment, with oil price volatility spilling over into freight costs, inflation expectations and industrial commodity demand. Until there is greater clarity around the stability of Gulf supply routes, markets are likely to remain highly sensitive to geopolitical developments.
