European steelmakers and mining stocks climbed sharply on Wednesday after reports that the United States and Iran had agreed to a two-week ceasefire, a development that alleviated immediate concerns over energy supply and helped push metals prices higher.
Shares of Salzgitter, ArcelorMittal, Aperam, Thyssenkrupp, Acerinox, Outokumpu and SSAB were all trading higher by between 7.5% and 16.5% at 07:35 ET (11:35 GMT).
Steel producers in Europe are particularly exposed to energy costs, a factor that has pressured the sector as fighting intensified in the Middle East. The reported truce triggered a sharp drop in oil prices on Wednesday amid expectations that flows through the Strait of Hormuz - which had faced disruption accounting for as much as 20% of global supply - could begin to return toward normal. The prospect of reduced supply disruption provided immediate relief to industries with heavy energy usage.
Mining stocks tracked the broader move higher. On London’s FTSE 100, copper miner Antofagasta jumped 12.4% and Anglo American rose 10.1%, with precious metals specialist Fresnillo up 10.6%. Endeavour Mining added 6.7% and Rio Tinto increased 4.7%, while Glencore was little changed. On the FTSE 250, RHI Magnesita, Hochschild Mining, Pan African Resources and Atalaya Mining each climbed more than 7%.
Precious and base metal prices rallied in step with equities. Spot gold moved above $4,800 an ounce after trading below $4,650 in the previous session. Silver gained more than 5.5%, rising to above $77 an ounce - its strongest level in three weeks - while copper also advanced.
U.S. President Donald Trump and Iran’s foreign minister said a ceasefire had been agreed, and Israel also agreed to hold fire. While the arrangement is limited to two weeks and falls well short of a lasting political resolution, markets treated the pause as an immediate pressure valve. Oil prices fell sharply on hopes that shipments through the Strait of Hormuz could begin to normalise, helping remove some of the risk premium that had accrued in commodities markets in recent weeks.
Even a partial restoration of shipments through the waterway would mark a notable change in near-term energy supply dynamics, market participants said, and this shift underpinned the relief rally across energy-intensive sectors and commodity-facing stocks.
Summary
A two-week ceasefire agreement involving the United States and Iran, with Israel agreeing to hold fire, eased fears of continued energy supply disruption. The development led to a sharp fall in oil prices and a broad rally in European steelmakers and mining stocks, while precious metals and copper also advanced.
Key points
- European steel stocks rose sharply, with several names up between 7.5% and 16.5% at 07:35 ET (11:35 GMT).
- Mining firms on London’s FTSE 100 and FTSE 250 posted notable gains, led by Antofagasta, Anglo American and Fresnillo.
- Oil prices fell on expectations that Strait of Hormuz flows - previously disrupted by as much as 20% of global supply - could begin to normalise, benefiting energy-intensive industries.
Risks and uncertainties
- The ceasefire covers a two-week period and is not a lasting settlement, so energy supply and commodity-price risks could re-emerge after the truce ends.
- While oil prices fell sharply on the expected easing of Strait of Hormuz disruptions, the degree to which shipments are restored remains uncertain and could continue to affect energy-intensive sectors such as steel.
- Commodity markets had a significant risk premium prior to the truce; if the pause fails to lead to sustained normalisation, that premium could return, impacting metals and mining equities.