London Commodity News
Market Snapshot (16:30 GMT)
- Brent Crude: $98.13/bbl, up 3.36% —supported, with geopolitical risk premium still embedded
- Coal (API2 April): $103.00/mt —trading activity elevated, with physical supply channels facing logistical pressure
- Coal (API4 April): $104.50/mt —supported by tighter South African export optionality
- Iron Ore (SGX 62% Fe): $106.75/mt, down 0.14% — firm, supported by strong demand and tighter inventories
- Copper (LME 3M): $13,258/mt, up 0.12% — slightly softer on the day, but underpinned by resilient demand
- Lead (LME 3M): $1,952/mt, down 0.66% — weaker, as subdued battery-sector demand continues to weigh
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What Matters Today
- Markets remain finely balanced, with sentiment continuing to pivot on developments in U.S.–Iran negotiations
- Energy remains the key driver, with oil and coal reacting to supply risk, logistics and inventory shifts
- Bulk commodities are holding firm, supported by resilient demand and rising cost pressure
- Base metals are mixed, with copper supported by underlying demand while lead remains soft
Coal
Thermal coal markets saw a sharp increase in paper activity during March, with ICE futures and options volumes reaching 79.2 million tonnes, up 17% month-on-month and the highest level since March 2022. European API2 contracts accounted for more than 70% of total volume, highlighting both the importance of the Atlantic market and the rise in hedging and speculative participation amid elevated volatility.
In the physical market, ARA inventories continued to recover, rising by 170,000 tonnes to 2.7 million tonnes in the week to 12 April. This marks a further rebound from decade lows, with gains led by Rotterdam’s EMO terminal, although partly offset by declines at Amsterdam’s HES and Vlissingen’s Ovet. Despite this improvement, low Rhine river levels continue to constrain inland barge movements, limiting the pace at which stocks can be redistributed into the broader European market.
In South Africa, rising diesel costs linked to the geopolitical backdrop are adding pressure to logistics chains. Although total exports remain above year-ago levels, shipments from smaller non-RBCT ports have fallen by nearly 23% to 2.38 million tonnes. This reinforces RBCT’s dominant role in export flows and reduces flexibility in alternative channels, a factor that could tighten prompt availability if logistical pressures persist.
Coal Curves
- API2: Remains the core paper benchmark, with strong participation reflecting elevated hedging interest
- API4: Supported by tighter export optionality from South Africa and pressure on alternative port flows
- Spread: Continues to reflect freight, origin competitiveness and logistical constraints across the Atlantic and Indian Ocean basins
Trade Insight
- Coal is increasingly trading as a logistics and cost story, not simply a demand story
- Rising derivatives volumes suggest participants are actively positioning for continued volatility
- Tightness in alternative South African export channels may keep RBCT-linked material relatively supported
- Across energy and bulk, transport constraints remain as important as outright supply
Market Focus: Brent Crude
Oil markets remain supported, though upside continues to be capped by uncertainty over the direction of U.S.–Iran negotiations. Comments suggesting the conflict may be nearing an end have improved risk appetite, but the blockade of Iranian ports remains in place and tanker movements through the Strait of Hormuz are still well below normal.
The market remains highly sensitive to supply disruption risk. The Strait continues to operate at reduced capacity despite its significance for roughly one-fifth of global oil and LNG flows. Additional support is coming from declining U.S. fuel inventories and firm export demand, both of which reinforce the perception of an already tight market. European gas has also remained firm due to lower storage levels and weaker pipeline flows, adding broader support across the energy complex.
That said, sentiment remains fragile. Conflicting headlines around negotiations, coupled with continued military activity, are preventing the market from fully unwinding the geopolitical premium. In the near term, oil is likely to remain volatile and headline-driven, with price direction tied closely to both diplomatic developments and evidence of any normalisation in physical shipping flows.
Additional Markets
Iron Ore
Iron ore moved higher, supported by robust demand, firmer futures and tighter inventories. While physical trading remains cautious, blast furnace utilisation and hot metal output continue to provide a strong consumption base. The absence of any significant inventory release following the easing of certain trade restrictions has also removed a key bearish overhang. Rising energy costs and concerns around diesel availability are adding a further layer of support, leaving the market with a firm near-term bias.
Copper
Copper eased slightly but remains well supported overall. Sentiment has stabilised on expectations of extended ceasefire negotiations, while Chinese demand indicators continue to improve. Fabricators have stepped up purchases following earlier price declines, and both inventory drawdowns in China and firmer import premiums suggest underlying demand remains healthy. Although the market is still vulnerable to geopolitical volatility, the broader balance remains constructive.
Lead
Lead prices moved lower as weak demand continues to dominate the market. Buying interest from the battery sector remains subdued, reflecting seasonal softness, while stable primary production has kept supply comfortable. Reduced output from secondary producers has not been sufficient to materially tighten conditions. For now, the market remains soft, with any recovery likely dependent on either stronger end-user demand or a more supportive macro backdrop.
Market Regime
Headline-driven energy / Firm bulk / Constructive copper / Soft lead
Closing View
Commodity markets remain in a holding pattern, with sentiment shaped less by pure fundamentals and more by the interaction between geopolitics, logistics and demand resilience. Energy continues to set the tone, while bulk commodities are drawing support from strong consumption and rising operating costs. Metals are more mixed, with copper holding a constructive bias and lead lagging on weak end-use demand.
Until there is greater clarity on U.S.–Iran negotiations and the outlook for regional supply flows, markets are likely to remain reactive. In this environment, price direction will continue to depend not just on outright supply and demand, but on the credibility of headlines and the durability of physical trade routes.
