The Commodities Feed: Potential Trump-Putin meeting weighs on oil

ICE Brent settled almost 0.7% lower yesterday with hopes that Presidents Trump and Putin may meet soon, possibly as soon as next week. It’s still unclear if Ukrainian President Volodymyr Zelenskyy will take part. This is important because it could affect the secondary tariffs on India, depending on how discussions go. However, it is important to note that President Trump’s deadline for a Russia-Ukraine peace deal expires today, leaving open the risk that the US will still tighten sanctions against Moscow.

Meanwhile, there are media reports that Indian state refiners are taking a step back from buying Russian crude oil amid the tariff uncertainty. Refiners are waiting for some guidance from the government before resuming their purchases. As we have mentioned previously, Indian exports to the US dwarf the savings that India receives from buying discounted Russian crude oil. Therefore, we believe that India will likely switch to alternative crude supply in order to avoid these additional tariffs. This should lead to increased demand for other grades from the Middle East, continuing to provide support to Dubai relative to Brent.

The latest trade data from China shows that crude oil imports in July averaged 11.2m b/d, up 11.5% year on year, but down a little more than 8% month on month. Imports in June were strong as independent refiners restocked. This leaves cumulative imports so far this year at 11.3m b/d over the first seven months of the year, up 3.2% YoY.

China’s central bank continues to add gold to its reserves. In July, the People’s Bank of China increased its gold reserves for the ninth straight month. Gold held by the central bank increased by 60,000 troy ounces to 73.96 million troy ounces last month. Gold is one of the strongest-performing major commodities, up by more than a quarter this year amid Trump’s aggressive trade policy, conflicts in the Middle East and Ukraine, and central bank buying.

Preliminary China’s Customs data showed strong domestic demand for industrial metals. Imports of unwrought copper rose 9.1% YoY (+4.3% MoM) to 480kt in July. However, cumulative copper imports are still down 2.7% YoY to 3.1mt in the first seven months of the year. Uncertainty over US tariffs on copper imports shifted supply from China to the US in the first half of the year. This trend may reverse in the second half, as Trump drops plans for a 50% tariff on refined copper. Meanwhile, copper concentrate imports increased 18% YoY (+8.9% MoM) to 2.6mt last month, as strong domestic refined output boosted demand for raw materials. On a year-to-date basis, imports of copper concentrate rose 7.7% YoY to 17.3mt.

In ferrous metals, iron ore imports rose 1.8% YoY to 104.6mt in July. However, cumulative iron ore imports are still down 2.4% YoY to 697.2mt in the first seven months of the year.

On the export side, China’s shipments of unwrought aluminium and aluminium products fell by 8.1% YoY to 542.1kt, while exports of steel products surged 25.6% YoY to 9.8mt last month. This is despite mounting trade barriers from countries concerned about a surge in Chinese shipments.

Arabica coffee futures extended their rally, with prices settling 1.5% higher yesterday. This followed falling shipments from top producer Brazil. Brazilian Trade Ministry data shows that green coffee exports in July fell 20% YoY, largely due to farmers holding back supplies in anticipation of higher prices amid uncertainty over potential US tariffs on Brazilian coffee. Looking at inventories, official data shows that total coffee stocks at ICE monitored warehouses declined for a ninth consecutive day to 751.04k bags, the lowest since May 2024.

China Customs data shows that China’s soybean imports rose 18.5% YoY to 11.7mt in July, although down 4.8% MoM. The increase in imports was largely driven by strong Brazilian flows. This leaves cumulative soybean imports at 61.04mt, up 4.6% YoY.