Commodity markets rose over the past week, but the strongest moves reflected supply risks and geopolitics rather than a convincing increase in Chinese demand. Oil rebounded sharply as hopes faded for a reopening of the Strait of Hormuz, while the prices of China’s steelmaking raw materials were supported by coal shortages and potential disruption to Australian iron ore exports. Gold also extended its recovery as softer US economic data reduced expectations for further Federal Reserve rate increases.
Brent crude settled at $88.98 a barrel on ICE on August 12, up $5.43, or 6.5%, from $83.55 on August 7. The rise came as negotiations over reopening the Strait of Hormuz remained deadlocked and attacks on shipping reinforced concerns about prolonged Middle Eastern supply disruption. The rally nevertheless faces a demand constraint: both OPEC and the International Energy Agency cut their 2026 consumption forecasts this week, while China’s crude imports fell 24.3% in July as high prices discouraged purchases. As the world’s largest crude importer, China’s ability to reduce buying when prices spike is an important brake on the global market.
China’s steelmaking industry told a more domestic story. The most-traded coking coal contract on the Dalian Commodity Exchange reached 1,343.5 RMB (US$199) per tonne on August 12, up 76 RMB, or 6.0%, from 1,267.5 RMB (US$188) on August 7. Safety inspections and low mine operating rates have tightened domestic coal supply, lifting input costs despite still-soft steel demand. Dalian iron ore rose much less, to 721.5 RMB (US$107) per tonne from 716.5 RMB (US$106), a gain of just 5 RMB, or 0.7%. Prices found support from the coal rally and concerns about industrial action at Australia’s Port Hedland, but weak Chinese construction and falling steel output limited the advance. Because China buys roughly three-quarters of globally traded seaborne iron ore, even modest shifts in Chinese demand quickly affect Australian and Brazilian exporters.
Gold also strengthened. Spot gold rose to $4,406.64 an ounce on August 12 from $4,336.02 on August 7, an increase of $70.62, or 1.6%, as weaker US employment and inflation data reduced expectations for another Fed rate increase.
Taken together, the week’s moves suggest China’s commodity demand remains uneven: supply disruptions are supporting prices even as domestic construction and industrial demand stay subdued. The next test will be whether firmer raw-material prices can survive weak steel consumption and China’s growing resistance to expensive imported oil.