Commodity markets remained highly reactive to developments in the Middle East as shifting headlines around negotiations, military activity and shipping disruptions continued to drive intraday volatility. While energy markets remain focused on the evolving geopolitical picture, industrial metals continue balancing macroeconomic uncertainty against increasingly constrained physical supply conditions.
Prices at 16h30 BST
API2 (May): $113.25/mt up $0.25/mt
API2 (June): 130.25/mt up $1.25/mt
API4 (May): $117.35/mt up $0.05/mt
API4 (June): $117.50/mt down $0.75/mt
Brent Crude: $93.16/bll up 0.99%
SGX Iron Ore 62Fe: $105.00/mt down 3.49%
LME 3-Month Copper: $13,665/mt up 0.99%
Coal
Energy markets remained highly volatile and headline-driven, with oil and gas prices continuing to move sharply throughout the session as participants reacted to developments surrounding the US-Iran conflict.
European gas and oil prices strengthened early and continued rising through much of the day, with front-month TTF gaining around 5% intraday and Brent crude rising close to 3% at its peak. The strength across the broader energy complex also provided support to coal markets, with swaps moving firmer through the morning session.
However, sentiment shifted during the afternoon after reports emerged suggesting that an extension to the US-Iran ceasefire and additional negotiations aimed at broader de-escalation were being actively considered. The headlines triggered a sharp reversal across energy markets, with Brent crude ultimately closing around 1% lower while European gas retained more modest gains of approximately 1%.
Coal markets also eased alongside the softer energy sentiment, although API2 contracts remained modestly firmer overall while other coal indices closed weaker on the day.
Brent Crude
Crude oil markets remained highly volatile on Thursday as participants continued navigating conflicting geopolitical headlines and rapidly changing expectations around the Middle East conflict.
Oil prices initially rose around 2% after reports emerged that the United States had carried out additional overnight strikes against Iranian military infrastructure, increasing concerns that tensions may once again be escalating despite ongoing negotiations between Washington and Tehran.
The rebound followed a sharp sell-off during the previous session, where both major crude benchmarks fell more than 5% amid optimism that negotiations could ultimately lead to a broader agreement and a reopening of the Strait of Hormuz.
President Donald Trump stated he remained “not satisfied” with current negotiations, while the White House dismissed reports suggesting Iran and Oman could jointly oversee shipping through Hormuz under a proposed agreement.
According to reports citing US officials, recent military strikes targeted locations considered threats to both maritime traffic and American military assets operating near the Strait.
Despite renewed tensions, crude remains on track for a second consecutive weekly decline as markets continue pricing the possibility that at least an interim agreement could still emerge. However, significant obstacles remain, particularly around Iran’s nuclear programme and the future control of shipping through Hormuz.
Iron Ore
Iron ore futures remained weak and volatile during trading, with the most-traded September contract on the Dalian exchange closing marginally lower at 780.5 yuan/mt.
Market participants continued to point toward relatively supportive underlying fundamentals despite softer price action. Analysts noted that stronger Chinese import demand during FY2025 has continued to offset weaker domestic steel production, while reduced scrap usage within Chinese steelmaking continues supporting iron ore consumption.
Although broader ferrous market sentiment remains cautious, underlying demand conditions continue to provide support and limit downside pressure for prices.
Copper
Copper prices edged modestly higher after fresh Chinese policy support measures helped offset renewed concerns surrounding Middle East tensions.
Three-month LME copper recovered from earlier weakness, rising 0.4% after recently falling to its lowest level since late May. Support came after reports suggested China’s central bank had instructed domestic banks to increase lending activity, reinforcing expectations that policymakers remain focused on supporting economic activity.
However, investor sentiment remained cautious after renewed US military strikes against Iranian targets reduced confidence that negotiations could produce a near-term resolution. Market participants continue balancing two competing forces: weaker macroeconomic sentiment and slower industrial activity on one side, versus tightening physical supply conditions on the other.
Concerns over sulphuric acid availability remain a key theme for copper markets, with shortages continuing to threaten mine production and refining activity globally.
Meanwhile, tariff expectations continue influencing global trade flows. COMEX copper maintained a substantial premium over LME prices as traders continued shipping material into the United States ahead of a potential decision regarding refined copper import tariffs later this year. A stronger US Dollar also added modest pressure, making dollar-denominated commodities more expensive for international buyers.
Commodity markets continue to trade within an environment dominated by geopolitical uncertainty, tightening physical balances and evolving trade flows. While near-term price direction remains heavily influenced by developments surrounding the Middle East, structural supply constraints across energy and metals markets continue providing an important underlying source of support.
