Lead Story
Copper near-term oversupply tempers rally as long-term demand remains intact
Copper prices cooled from recent highs as near-term surplus builds amid elevated inventories, though the long-run outlook remains supported by electrification and data-centre demand.
Copper has moved back from the roughly $13,000 per tonne level touched last month to about $12,700 this week, as visible stockpiles at major exchange hubs expand and pre-holiday activity in China falters ahead of the Lunar New Year. Analysts emphasise that while the long-run narrative remains constructive, the near term is being cushioned by oversupply. The balance of supply and demand is bifurcated: long-run demand tied to electrification and digital infrastructure remains intact, while near-term dynamics are increasingly driven by inventory levels, positioning in China, and tariff expectations.
Goldman Sachs researchers have flagged a near-term surplus as a principal driver of the current price action, while Saxo Bank notes that rising inventories and contango in London point to ample near-term supply. The dynamics are complicated by price signals from China after its Lunar New Year, and by policy risk in the form of potential U.S. tariffs on refined copper that could reshape flows once clarity emerges. Even with a softer near-term market, several observers expect the post-holiday demand rebound in China to reassert price pressure to the upside later in the year if post-holiday demand recovers.
The copper complex is therefore likely to remain volatile through the spring, with the daily driver being exchange-hub stock levels, macro demand signals from China, and any tariff announcements that could alter the trajectory of flows to the United States. Traders will be watching LME and SHFE inventories closely, as well as any twists in China’s post-holiday demand and infrastructure restocking. The broader base metals complex could mirror copper’s pattern, with cyclical corrections giving way to renewed upside as long-run fundamentals reassert themselves.
Observers caution that a sustained recovery in copper will depend on post-holiday demand reacceleration in China, a stabilisation of inventories, and any policy signals that affect tariff risk. If inventories begin to draw down from current highs and Chinese input demand stabilises, copper could mount another leg higher. Until then, market participants will likely price in a mix of risk-off sentiment around near-term oversupply and the more durable growth story tied to electrification, data infrastructure, and renewable energy expansion.
In the meantime, base metals traders are braced for increased volatility as hedging and speculative positioning remain elevated. Watchers say the set-up favours data-driven trading and event-driven moves tied to tariff developments and Chinese demand signals after the Lunar New Year. The near-term price path remains contingent on how quickly inventories unwind and whether demand reasserts itself in the second quarter.
In This Edition
- The gender wage gap and what firms have to do with it: Cross-country firm-level wage dynamics explain a meaningful portion of the gap with near-term policy implications.
- Colombia natural gas crisis deepens as policy shifts cut supply and LPG imports surge: Energy security and cost pressures rise as policy shifts bite.
- The Last Stand for King Coal: US coal revival measures test energy balance against cheaper gas and renewables.
- The Missing Link in Americas Nuclear Space Strategy: Space propulsion bottlenecks and private funding surface in a high-energy race.
- YPF Chief Readies War Chest for Shale Push: Argentina plans a multi-year shale push with large capex and LNG financing.
- Anglo American posts $3.7B loss on fresh De Beers writedown: Diamond market weakness weighs on a diversified miner.
- Woodsmith to benefit from investment agreement with Mitsubishi: Investment backing could accelerate fertiliser mineralisation and regional jobs.
- Santos Agrees Terms for 10-Year Supply of Gas to Whyalla Steel Plant: Gas substitution could slash emissions in domestic steel making.
- USA Crude Oil Stocks Drop 9MM Barrels WoW: Weekly draw supports pricing, with attention on next EIA status.
Stories
The gender wage gap and what firms have to do with it
Cross-country evidence shows firms explain a meaningful share of the gender wage gap, with variation by country and age.
A cross-country study using harmonised employer-employee data from the United States and ten European nations finds that firms account for between 10 and 30 per cent of the gender wage gap across roughly 2010 to 2019. In the United States, Hungary and Germany, firm pay-premium gaps explain at least 30 per cent of the overall wage gap, while in Denmark, Sweden and Finland the share is closer to 15 per cent. The results reinforce the view that firm-level dynamics-beyond individual productivity or occupational choices-shape gender pay disparities.
The analysis disentangles two primary channels: a pay-setting channel, where women are paid less than similarly skilled men within the same firm, and a sorting channel, where women are more likely to be employed by firms that pay lower wages overall. In most countries, the sorting channel dominates, suggesting that the gender gap partly reflects the kinds of firms women work for rather than only how firms set pay for men versus women. The study also notes that the gap in firm-level pay premiums grows with age, a pattern consistent with evolving childcare responsibilities and career paths.
Policy implications point to a twin approach: continue and extend family policies such as paternity leave and affordable public childcare, while introducing firm-level reforms. Pay transparency, strengthened unions, and competition-driven labour markets can help reduce within-firm and between-firm pay disparities. The authors emphasise that the findings should inform policy design, showing that both family-friendly policies and firm reforms are needed to close the wage divide.
The piece notes caveats: the decomposition relies on administrative data patterns and harmonised methods, which improves comparability but may still omit some country-specific institutional nuances. It also highlights that higher firm rents in high-productivity environments can amplify gender gaps through unequal rent-sharing. The authors warn that persistent gaps in bargaining power and labour-market imperfections can sustain disparities even where formal equality policies exist. The overall takeaway is that policy should look beyond the family-work balance to the wage-setting dynamics inside firms.
Colombia natural gas crisis deepens as policy shifts cut supply and LPG imports surge
Colombia’s natural gas output fell sharply in late 2025 as policy shifts curb exploration and LPG imports rise to compensate, raising energy risks and import bills.
December 2025 saw Colombia’s proven natural gas production slip to around 693 million cubic feet per day, a fall of 9 per cent from November and 23 per cent from a year earlier. The decline is linked to Petro administration policies designed to curb exploration and to promote LPG imports as a substitute. Analysts warn that the slide increases energy insecurity, raises electricity costs, and raises the nation’s import bill for gas and LPG at a time when hydroelectric generation remains vulnerable to hydrological variability.
The trajectory matters beyond one commodity: natural gas underpins gas-fired power plants and domestic heating, while Colombia’s hydropower base has been intermittently stressed by water variability. The shift away from domestic gas supply toward LPG imports heightens price sensitivity and exposure to international feedstock dynamics. Government data and industry commentary point to declining exploration and investment in the sector as a key factor in the supply gap.
Industry observers note that the Sirius gas project, planned to come online in 2030, is not expected to close the gap quickly enough to avert continued import reliance. LPG import trajectories into 2026 are a critical watch, as higher LPG costs feed into broader energy bills and power prices. The debate now focuses on how quickly new domestic sources can be brought online and whether policy incentives will align with a faster turnaround in gas supply.
Market implications are already visible in electricity pricing signals and in broader energy-market sentiment. The government’s aim to reweight Colombia’s energy mix toward gas-fired generation interacts with structural declines in domestic gas reserves and ageing infrastructure. If the Sirius project proceeds on schedule, it could offer a partial shield by 2030, but the interim cost pressures and grid stability remain a concern for households and industry.
Watchers say the immediate questions hinge on gas production growth from Sirius and whether LPG imports can be stabilised or reduced. The evolving balance between domestic exploration policy and import dependency will shape electricity prices, industrial costs, and Colombia’s broader energy-security outlook through 2026 and beyond.
The Last Stand for King Coal
US policy moves to revive coal face constraints from cheaper natural gas and renewables, with a large public land offer and funding aimed at restarting or refitting plants.
The US administration has moved to reassert a coal-centric energy stance, opening more than 13 million acres of public land for coal projects and committing $625 million in funding to restart or refit coal-fired plants. Royalty rates for new leases have been slashed to 7 per cent, part of a broader energy-dominance agenda. These steps occur amid a broader energy mix where cheaper natural gas and expanding renewables increasingly compete with coal on price and emissions performance.
Policymakers argue that reviving coal capacity could bolster energy security and support domestic energy workers. Critics warn that the revival would be unlikely to restore coal to its former prominence given the rapid cost declines in gas and renewables, and continuing climate commitments. The tension reflects a broader policy debate about balancing grid reliability, cost, and decarbonisation.
Industry observers are watching for concrete outcomes: new coal project approvals, restarts of existing plants, and any shifts in royalty or permitting policy that could adjust the economics of coal versus natural gas. While a full revival remains uncertain, the policy tilt underscores the political salience of coal as a strategic resource and a potential swing factor in regional power markets.
Beyond energy economics, the move risks drawing political and regulatory scrutiny as climate policy intersects with the practicalities of power generation. The degree to which coal can regain competitiveness against gas and renewables will hinge on cost trajectories, fuel mix, and the speed with which new capacity can come online. The unfolding dynamic will shape the United States’ energy security posture and the competitive balance in power generation for the foreseeable future.
The Missing Link in Americas Nuclear Space Strategy
Space-based nuclear propulsion faces infrastructure bottlenecks even as NASA eyes tests and lunar outposts; private funding accelerates demonstrations of nuclear energy in space.
A cross-sector space race is developing around high-energy propulsion and power sources, with NASA planning a test by 2028 and a lunar outpost by 2030. Private ventures such as Zeno Power are raising capital to push nuclear energy solutions toward demonstration in 2026 and commercial deployment by 2027. The bottleneck, however, is the lack of testing facilities and cross-sector collaboration needed to move from concept to flight-ready technology.
Experts highlight infrastructure gaps as a critical constraint: dedicated testing facilities, regulatory pathways, and cross-disciplinary engineering capabilities are essential to translate space propulsion concepts into practical deployment. The push from private capital adds momentum but depends on alignment with NASA’s test schedules and funding streams, as well as the broader regulatory environment governing nuclear materials and safety.
Zeno Power’s $50 million Series B demonstrates investor confidence in battery-scale nuclear demonstrations, but the path to full-scale demonstrations and commercial deployment remains complex. Success would offer durable, high-energy capability for space operations, enabling longer missions and heavier payloads, but it will require a coordinated programme across aerospace, energy, and regulatory sectors.
The space industry is watching infrastructure development closely, including facilities to test reactors, propulsion systems, and energy storage hybrids. The potential payoff-robust, high-energy space operations-depends on cross-sector collaboration, regulatory clarity, and the timely sequencing of tests and deployments. The coming years will reveal whether the Missing Link can be bridged from theory to practice.
YPF Chief Readies War Chest for Shale Push
YPF outlines a US$3.5 billion upstream plan for Vaca Muerta in 2026, backed by incentives and LNG financing to reach 200,000 barrels per day.
YPF says it will keep upstream capital expenditure around US$3.5 billion in 2026 to push shale development at Vaca Muerta, targeting 200,000 barrels per day. The plan is aided by Marco Milei’s expansion of the RIGI incentive scheme and a joint LNG project with Eni and ADNOC, with financing around US$14 billion. The move signals intent to anchor Argentina’s energy balance and attract international shale players to the country’s large unconventional resource base.
The strategic ambition rests on a mix of policy support, capital, and project delivery. Milei’s economic framework and the expansion of incentives are designed to encourage higher drilling activity and efficiency gains. The LNG project is a critical complement, potentially unlocking export capacity and broader energy-industry participation.
Risks include macro volatility, currency and inflation pressures, and the challenge of securing long-term financing for large, capital-intensive energy plays. The February 27 earnings call will be important for confirming strategy execution, including updates on RIGI expansions and LNG financing progress. The broader implication is that Argentina could emerge as a more consequential player in regional shale development if these plans translate into sustained production growth and investment inflows.
Watchers will also be monitoring how Vaca Muerta yields translate into regional supply chains, export routes, and cooperation with international partners. The degree of collaboration and the pace of development will shape Argentina’s broader energy trajectory and its role in regional energy security.
Anglo American posts $3.7B loss on fresh De Beers writedown
Diamond-market weakness hits a diversified miner even as other segments show resilience amid restructuring and sales talks.
Anglo American reported a substantial quarterly loss, reflecting a fresh De Beers writedown of about $2.3 billion and a resulting pre-tax impairment that cut De Beers’ carrying value. The company, however, still delivered a positive underlying earnings figure for continuing operations and signalled ongoing discussions about De Beers’ future, including potential sale arrangements. The writedown underscores the pressure on the diamond market, contrasting with stronger performances in copper and iron ore for the group.
The group's trading update indicates a portfolio reshaping that has focused attention on copper and iron ore assets, with strategic moves reflecting attempts to lock in value while exploring options for non-core assets. De Beers remains at the centre of market expectations, with Botswana stakeholders signalling renewed interest in stake changes, while Angola has explored a broader portfolio alignment.
The results highlight the fragility of the diamond cycle amid weak demand and high inventories, even as the parent company maintains some earnings power. Market watchers will be watching for final binding bids for De Beers and any developments around Woodsmith, which could influence Anglo’s fertiliser strategy and commodity mix. The outlook for 2026 hinges on how the group navigates this portfolio transition alongside ongoing copper and iron ore resilience.
Woodsmith to benefit from investment agreement with Mitsubishi
Anglo American and Mitsubishi sign an investment partnership to support Woodsmith, creating jobs and accelerating POLY4 development.
Anglo American and Mitsubishi announced an investment agreement to back Woodsmith, with around $300 million in annual investment and potential Mitsubishi equity around 25 per cent. Woodsmith employs more than 1,000 people, with 76 per cent drawn from the local area. The arrangement could accelerate POLY4 (a fertiliser mineral product) commercialisation and set the scene for further syndication of Woodsmith assets.
The deal aligns with Anglo’s broader strategy to monetise and advance select assets while leveraging strategic international partnerships. The local employment impact and regional industrial development are highlighted as key benefits. Investors will want to see the board’s final investment decision in 2028 and any subsequent feasibility updates, including capital expenditure trajectories and potential expansion scenarios.
This partnership also raises questions about the pace of Woodsmith’s commercialisation, market uptake for POLY4, and any regulatory or supply-chain hurdles. If the project progresses smoothly, it could demonstrate a scalable model for integrating high-value fertiliser minerals with established mining operations and export routes.
Santos Agrees Terms for 10-Year Supply of Gas to Whyalla Steel Plant
A binding term sheet for natural gas supply to Whyalla Steelworks supports decarbonisation via direct reduced iron and gas substitution.
Santos has signed a binding term sheet to supply 20 petajoules per year of natural gas for a decade to Whyalla Steelworks to enable direct reduced iron. The move promises substantial emissions reductions-approximately 50 per cent compared with coal-fired operations-by replacing carbon-intensive inputs with gas in domestic steelmaking. The deal signals a concrete decarbonisation pathway for Australia’s steel supply chain and aligns with regional energy-transition ambitions.
Gas deliveries are anticipated to begin in 2030, with ongoing investments in magnetite expansion and carbon capture and storage (CCS) integration to further cut emissions and improve process economics. The contract could also influence gas flows and planning for related industrial projects in the region, with potential knock-on effects for LNG infrastructure and cross-border energy trade.
Monitoring developments around gas supply volumes, CCS integration progress, and magnetite expansion milestones will be essential. If the plant moves ahead on schedule, it may reinforce a broader shift in domestic steel production toward lower-emission processes and could affect wholesale energy-market dynamics in the region.
Narratives and Fault Lines
- Growth versus policy risk: The energy transition is accelerating in some places even as policy choices, from childcare to tax incentives and energy subsidies, shape the underlying economics for industry players.
- The geography of energy security: Regional stories show how country-specific policy, resource endowments, and infrastructure shape resilience, access to cheaper fuels, and decarbonisation pathways.
- Corporate portfolio rebalancing: Large miners are juggling structural write-downs, asset sales, and new partnerships, creating a mosaic of opportunities and risks for shareholders and host communities.
- Space and energy convergence: Investments in high-energy propulsion and space-scale energy systems reveal a broader strategic push to secure future energy access and strategic advantage, albeit with substantial development risk.
Hidden Risks and Early Warnings
- Tariff and policy surprises: Shifts in tariff regimes for refined copper and other energy inputs could abruptly alter demand and trade flows, affecting prices.
- Grid reliability and transitional costs: Expanding renewables and gas-based complexes raise questions about grid stability, capacity, and the economics of new infrastructure.
- Financing discipline: Large capex plans in energy, mining, and space sectors depend on stable macro conditions; any funding shortfalls could stall projects.
- Commodity price volatility: Near-term oversupply in copper juxtaposed with long-run demand signals creates a dichotomy that could spur swift repricing if inventories tighten or demand deteriorates.
- Regulatory approvals: Large-scale projects in mining and energy require multi-jurisdictional permits; delays can erode expected timelines and returns.
Possible Escalation Paths
- Tariff clarity triggers copper price moves: A clear tariff timetable on refined copper could trigger a renewed price rally or a churn in flows, visible in hub inventories and price spreads.
- LNG project financing milestones set the tone for regional gas supply: Delays or accelerations in YPF's LNG financing could alter expectations for Argentina’s shale and gas balance.
- De Beers sale developments shape diamond markets: Binding bids or strategic partner selections could destabilise or stabilise diamond pricing and mining capital discipline.
- Woodsmith progress drives fertiliser market: A faster Woodsmith phase could accelerate POLY4 deployment and drive regional fertiliser supply chains.
- Whyalla's steel transition informs domestic decarbonisation: Start of gas deliveries and CCS integration milestones could guide regional emissions trajectories and industrial policy.
Unanswered Questions To Watch
- Will post-holiday copper demand recover in China and support a new price leg?
- How quickly will Chinese demand signals stabilise after the Lunar New Year?
- Are tariff announcements on refined copper imminent and what would be the timing?
- How will LPG imports evolve in Colombia if policy continues to suppress exploration?
- Can coal revival measures outpace cheaper gas and renewables in the US under a long horizon?
- Will De Beers strategic options yield a binding sale or continued restructuring?
- How quickly can Woodsmith's POLY4 commercialisation scale and attract further funding?
- Will YPF’s shale push attract partner interest and what are the financing milestones?
- When will Santos commence gas deliveries to Whyalla and how will CCS progress?
- How will US crude stock movements interact with ongoing price dynamics?
- What are the regulatory hurdles for the first nuclear space programmes in the Americas?
- Could Europe’s LNG realignment tighten or loosen under new policy regimes?
This briefing is published live on the Newsdesk hub at /newsdesk_commodities on the lab host.