London Commodity News
Market Snapshot (16:30 GMT)
- Brent Crude: $95.40/bbl, up 5.55% — rebounding on renewed geopolitical tension and supply risk
- Coal (API2 April): $102.00/mt — softer into the close after early strength alongside energy
- Coal (API4 April): $104.50/mt — relatively supported, though directional bias weakening
- Iron Ore (SGX 62% Fe): $107.00/mt, down 0.23% — stable, supported by demand and tight inventories
- Copper (LME 3M): $13,290/mt, down 0.43% — mixed, with demand support offset by macro uncertainty
- Chrome Concentrate (40/42%, CIF China): $317/mt — subdued, with weak demand and high inventories
What Matters Today
- Markets opened the week on a more cautious footing, as renewed Middle East tensions reversed last week’s optimism
- Energy has reasserted itself as the primary driver, with oil rebounding sharply on supply disruption risk
- Bulk commodities remain supported by resilient demand, though increasingly sensitive to macro signals
- Metals are mixed, with cost pressures rising alongside geopolitical uncertainty
Coal
Coal markets tracked the broader energy complex, with early gains reversing into the close as volatility returned. Strength in oil—driven by renewed concerns over disruption through key shipping routes—initially supported coal prices, before weaker sentiment into the afternoon saw indices finish marginally lower. Newcastle prices led the downside among benchmarks.
European gas traded more steadily, easing during the session but still closing higher on the day, reflecting a more balanced supply outlook relative to oil.
Overall, coal continues to demonstrate relative resilience, with price moves less pronounced than in oil and gas. The market remains supported by stable demand and ongoing logistical constraints, though short-term direction is increasingly dictated by developments in the energy complex.
Coal Curves
- API2: Slightly weaker into the close despite early support from oil
- API4: Holding relatively firm, supported by constrained export flows
- Spread: Continues to reflect freight dynamics and regional supply tightness
Trade Insight
- Energy volatility is once again dictating direction, with coal following oil but with muted downside
- The intraday reversal highlights a market driven by headline risk rather than structural shifts
- Cost pressures—particularly fuel and sulphur—are increasingly feeding into production economics across metals
- Logistics and shipping disruption remain the key transmission mechanism across commodities
Market Focus: Brent Crude
Oil markets rebounded sharply, with Brent moving back above $95/bbl as geopolitical tensions between the United States and Iran escalated over the weekend.
The seizure of an Iranian-flagged vessel, alongside renewed hostilities in the Gulf of Oman, has undermined confidence in the previously announced ceasefire. Iran’s decision to again restrict passage through the Strait of Hormuz—after only recently declaring it fully open—has reintroduced a significant geopolitical risk premium.
With negotiations now uncertain and both sides signalling the potential for further escalation, the market is increasingly pricing in the risk of prolonged disruption to global oil flows.
While diplomatic discussions are still expected in the coming days, sentiment has shifted decisively. Oil is likely to remain highly volatile, with prices reacting rapidly to both geopolitical developments and any changes in shipping activity through key routes.
Additional Markets
Iron Ore
Iron ore edged higher in early trading before stabilising, supported by firm demand and relatively tight inventories. Strong steel production continues to limit stock build-up, providing a supportive backdrop. However, the market remains sensitive to broader macro developments, with volatility expected to persist despite constructive fundamentals.
Copper
Copper traded mixed, with stronger pricing in Shanghai offset by softer performance in London. Continued inventory drawdowns and firm import premiums point to resilient Chinese demand. However, geopolitical uncertainty continues to weigh on sentiment, leaving the market balanced between supportive fundamentals and macro risk.
Chrome
Chrome markets remain subdued, with weak demand and elevated inventories continuing to pressure prices. Ferrochrome producers remain cautious, with limited spot activity. While cost-side support persists, it has not translated into stronger demand, leaving the market with a slight downward bias.
Sulphur
Sulphur markets are tightening, driven by disruptions to Middle Eastern supply. Restrictions on flows through the Strait of Hormuz, combined with export limitations from key producers, have pushed prices higher.
This is feeding into rising production costs across the metals complex, particularly for copper and nickel, where sulphuric acid is a critical input. The impact is already evident in tighter margins, with further pressure likely if supply constraints persist.
Market Regime
Renewed risk premium / Volatile energy / Supported bulk / Cost-driven metals
Closing View
The re-escalation of tensions has quickly reversed last week’s improvement in sentiment, highlighting the fragility of current market conditions. Energy markets have once again taken the lead, with oil volatility feeding through into coal and the broader commodity complex.
While underlying demand fundamentals remain supportive, particularly in bulk commodities, markets are increasingly shaped by geopolitical risk and supply chain uncertainty. Until there is greater clarity on negotiations and the stability of key trade routes, commodities are likely to remain volatile and highly responsive to headlines.
