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The accelerating resumption of tanker transits through the Strait of Hormuz following the US-Iran interim peace agreement is unwinding a substantial geopolitical risk premium and driving the largest weekly crude price decline in over a month.
With markets pricing an 80% probability of a December Fed rate hike and 63% odds of a September move, monetary policy expectations have overtaken geopolitical risk as the dominant force shaping commodity prices across energy, metals, and agricultural markets.
The US-Iran interim peace agreement, which reopens the Strait of Hormuz and lifts sanctions on Iranian oil exports, represents the most significant geopolitical shift in global energy markets in years, with immediate and cascading effects across multiple asset classes.
Saudi Arabia's resumption of tanker loadings at the Ras Tanura terminal — one of the world's largest crude oil export facilities — signals the Kingdom's intent to rapidly recover lost export market share following the Strait of Hormuz reopening.
Chinese crude steel output fell 2.7% year-on-year to 84.35 million tons in May, and mill profitability has deteriorated to approximately 51%, reflecting the deep and persistent demand deficit created by the property sector's prolonged contraction.
Copper futures are testing the critical $6 per pound support level amid a trifecta of headwinds — a surging dollar, intensifying Fed rate hike expectations, and a softening Chinese industrial demand backdrop.
Silver dropped below $57 an ounce Friday, on course for a punishing 14% weekly decline as Federal Reserve rate hike expectations and a firmer dollar overwhelmed residual support from geopolitical risk.
Copper futures traded below $6 per pound Friday, remaining close to seven-week lows as a broadly stronger US dollar and Federal Reserve rate hike expectations dampened sentiment across industrial metals markets.
Steel rebar futures fell below CNY 3,060 per ton Friday, hitting a four-month low, as mill profitability dropped to approximately 51% — down 4.8 percentage points week-on-week — following coke price spikes triggered by a fatal Shanxi coal mine accident.
Lumber prices eased to around $624 per thousand board feet after briefly touching near an eight-month high on June 22, driven by anxiety over escalating Canadian softwood import costs and tightening supply conditions.
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