Commodity markets remained focused on supply security and logistics disruptions as geopolitical tensions surrounding the Strait of Hormuz continued to influence energy, freight and industrial metals markets. While volatility across oil markets moderated, traders increasingly shifted attention toward underlying physical balances, demand resilience and evolving supply risks across key commodity sectors.
Prices at 16h30 BST
API2 (May): $108.00/mt
API4 (May): $115.50/mt
Brent Crude: $105.12/bll down 0.48%
SGX Iron Ore 62Fe: $111.10/mt down 0.18%
LME 3-Month Copper: $13,946/mt down 1.46%
Coal
Energy markets experienced another comparatively stable session, although European gas and oil prices moved in opposite directions. Front month TTF gas gained around 1.5%, while Brent crude eased by just under 1%. Coal markets remained under selling pressure amid relatively thin liquidity due to public holidays across much of Europe, with API2 contracts leading declines and falling by around $1 across the curve.
South Africa’s thermal coal exports rose nearly 10% year-on-year in March to 7.19mn t, according to customs data compiled by Global Trade Tracker, as the onset of the US-Iran conflict and associated gas shortages encouraged buyers to secure additional coal volumes for energy security purposes. Argus’ NAR 6,000 kcal/kg assessment averaged $110.07/t in March, up sharply from February’s $98.69/t average. Pakistan notably increased its reliance on South African coal following severe disruptions to Qatari LNG supply, despite elevated freight costs.
At the Amsterdam-Rotterdam-Antwerp (ARA) hub, coal inventories edged higher to 3.22mn t in the week to 10 May, supported by steady Colombian arrivals and softer German coal burn. However, persistently low Rhine river levels continued to constrain barge loading capacity for inland utilities. Stocks at Rotterdam’s EMO terminal remained flat at 2.1mn t.
Meanwhile, South African rail operator Transnet signed access agreements with 11 private-sector operators across key freight corridors. The programme is expected to add an initial 24mn t/yr of freight capacity, with a longer-term target of 52mn t/yr over the next five years. Commodities covered include thermal coal, manganese and fuel products.
Brent Crude
Brent crude futures traded broadly unchanged around $105/bl as markets monitored developments in the Middle East alongside ongoing discussions between US President Donald Trump and Chinese President Xi Jinping.
Reports from Iran indicated that approximately 30 vessels had recently transited the Strait of Hormuz, while Tehran has reportedly allowed limited movement for some Chinese ships. At the same time, US Secretary of State Marco Rubio urged China to use its influence to help facilitate a broader reopening of the waterway.
Despite tentative signs of easing transit restrictions, the International Energy Agency warned that crude and fuel shipments through Hormuz fell by nearly 6mn bpd during the first quarter and stated that global oil markets could remain materially undersupplied until at least October, even if the conflict were resolved next month.
Adding further support to prices, Saudi Arabia informed OPEC that its oil production had declined to its lowest level since 1990.
Iron Ore
Iron ore futures displayed a weak-then-strong trading pattern, with the most-traded DCE September contract (I2609) closing broadly flat at 817 yuan/mt. Portside spot prices declined by 2–5 yuan/mt, while overall trading sentiment remained subdued.
Traders continued offering in line with market conditions, while steel mills largely maintained hand-to-mouth procurement strategies. Analysts noted that although broader capital inflows into ferrous markets have provided support, underlying iron ore fundamentals remain less supportive at current price levels. Seasonal demand weakness is also expected to weigh on sentiment in the coming weeks.
Copper
Copper retreated from recent record highs as elevated prices began to weigh more visibly on downstream demand in China, while markets also monitored the ongoing summit between Chinese President Xi Jinping and US President Donald Trump.
LME copper fell as much as 1.9%, ending an eight-session rally that had been driven by tightening global supply conditions, mine disruptions and strong long-term demand expectations linked to artificial intelligence infrastructure and electrification. Analysts noted that while structural bullish drivers remain intact, current price levels are increasingly constraining short-term physical demand.
Chinese fabricators reported softer orders for copper rod and copper tube products, particularly as SHFE prices remained above 106,000 yuan/mt. Rising prices, combined with uncertainty linked to the effective closure of the Strait of Hormuz, have contributed to weaker purchasing activity across several downstream sectors.
At the same time, market participants continue to monitor Beijing’s crackdown on fraudulent invoicing activity, which has reduced liquidity in spot metals trading and slowed imports into China.
Despite the short-term pullback, broader supply concerns remain supportive. US COMEX copper prices continued to trade at record highs amid growing expectations of potential tariffs on critical metal imports, while global supply chains remain under pressure from sulphuric acid shortages, tight concentrate availability and ongoing mining disruptions. Demand linked to AI infrastructure, grid expansion and clean energy investment continues to underpin longer-term expectations for structural copper deficits.
Commodity markets continue to transition away from purely cyclical pricing dynamics toward a more structurally constrained environment driven by supply security, logistics disruption and long-term industrial demand growth. While geopolitical developments remain a major source of volatility, tightening physical balances and evolving strategic demand trends continue to provide underlying support across several key commodity markets.
