GLOBAL COPPER AND NICKEL SMELTING ACTIVITIES RISE IN APRIL
Copper up, Nickel down in China
05 May 2022 – SAVANT, the unique geo-spatial analytics product launched in October 2019 by Earth-i and Marex, covers global smelting activity for both Copper and Nickel.
Sign-up here for a demonstration of the SAVANT service.
April 2022 Copper observations include:
For all the talk of Covid lockdowns, activity in China held up well in April with the country level Dispersion Index spending most of the second half of the month above the 50.0 average. This was all the more remarkable for the concurrent rise in the country level Inactive Capacity Index to 12.7 from 8.7 in March, so that despite more operations being offline, those that continue to operate are showing high levels of productivity. Operating rates were generally good across the other regions, and although Europe & Africa registered an Activity Dispersion reading of only 39.6 this was in large part due to well sign-posted maintenance schedules at key sites, with a number of other plants due to come offline shortly. Meanwhile custom and captive smelting activity diverged over the month as while the negative arbitrage may have reduced incentives for Chinese stand-alone operators to smelt imported concentrates, underwhelming mine production in Chile does not appear to have transferred downstream to smelter output.
- Global Dispersion Index rose to 48.7, up from 47.9 in March
- The China Dispersion Index increased to 50.5 having reached as high as 56.3 on 23 April, despite the country level Inactive Capacity Index also rising, partly due to the continued outage of a major Shandong based smelter
- Smelting activity is seen in a narrow range across all of the major regions, although only South America and Asia & Oceania also registered Dispersion Indices above an average of 50.0, while Europe & Africa was weakest at 39.6
- The Activity Dispersion Index of Captive smelters jumped 7.8 points to 54.3 in April in contrast to Custom smelters, which fell back to 43.9 from 49 in March
April 2022 Nickel observations include:
Global smelting activity rose again in April despite a fall in activity in China, where a significant number of plants across the Eastern provinces of Shanghai, Jiangsu and Shandong, the Southern provinces of Guangxi and Guangdong and others in Inner Mongolia have all shown periods of recent inactivity over April and into early May. Conversely in Indonesia only a small number of NPI operations, all of which we believe have been inactive for some time and whose combined capacity is small, are showing as inactive among our expanded coverage of 16 sites. Interestingly, our Activity Dispersion Index for class 1 refined nickel recorded its strongest month since October 2020, in contrast to what was in general a weak series of production reports for the first quarter of the year from the major producers of refined metal.
- Global Dispersion Index rose to 49.1, up from 47.3 in March
- NPI Dispersion Index in China slumped to an average of 40.8 in April
- NPI Inactive Capacity Index in Indonesia fell to 4.7, the lowest reading since July 2021
- The Dispersion Index for Grade 1 nickel hit a 3 year high of 76.0 on April 28th
Dr Guy Wolf, Marex’s Global Head of Analytics, commented: “Metals have drawn attention recently from claims of market dysfunctionality, however SAVANT geospatial data suggests that they are far from broken. In the last month, Covid related lockdowns in China have changed the narrative from one of supply side underperformance and low exchange stocks to demand destruction and weaker purchasing power with the sliding renminbi. Concurrently, months of rising prices now look to be incentivising productivity at smelters so that if logistics challenges can be overcome we might reasonably expect to see excess material soon being delivered into exchange warehouses, exactly as the founders of our terminal market intended.”
* – Index values go back to March 2016
The Activity Dispersion Index is a measure of capacity-weighted activity levels observed at smelter sites where a reading of 50 indicates that current activity levels are at average levels. Readings above or below 50 indicate greater or lesser activity levels than average, respectively. The above chart displays these readings as a weekly rolling average.
The Inactive Capacity Index is derived from binary observations of a smelter’s operational status as being either active or inactive. The capacity weighted global and regional indices show the percentage of smelter capacity that is inactive, with readings displayed in the chart below as a weekly rolling average. A reading of zero would indicate 100% smelting capacity.
The SAVANT platform monitors up to 90% of Copper and 96% of Nickel smelting capacity around the globe. Using daily updated sources, including extensive use of geospatial data collected from satellites, the index reports on the activities at the world’s smelting plants offering subscribers unprecedented levels of coverage, accuracy and reliability. This dataset allows users to make better informed and more timely trading decisions.
To find out more please visit SAVANT, or sign-up for the Free SAVANT service.
About Earth-i
Earth-i is a geospatial intelligence company using machine learning, artificial intelligence and Earth Observation data to provide unique and relevant insights, derived from diverse geospatial data, that deliver clear decision advantage for businesses, governments and other organisations.
Earth-i provides advanced analytics using automated interpretation of a range of geospatial Earth Observation data sources including colour imagery, colour video, infra-red and radar from a range of sources including satellite, drone, aerial and ground-based sensors. This data is fused with additional data sources to extract factual understanding and generate predictive insights across a range of markets such as commodities, supply chain, agriculture, infrastructure and defence.
For more information visit:
- Website: www.earthi.space
- LinkedIn: Earth-i
- Twitter: @Earthi_
To find out more please visit www.earthi.space.
For more information about this press release, please contact: info@earthi.co.uk
About Marex
Marex is a diversified global financial services platform, providing essential liquidity, market access and infrastructure services to clients in the energy, commodities and financial markets.
The Group provides comprehensive breadth and depth of coverage across five core services: Market Making, Execution and Clearing, Hedging and Investment Solutions, Price Discovery and Data & Advisory. It has a leading franchise in many major metals, energy and agricultural products, executing around 38 million trades and clearing over 193 million contracts in 2021. The Group provides access to the world’s major commodity markets, covering a broad range of clients that include some of the largest commodity producers, consumers and traders, banks, hedge funds and asset managers.
Marex was established in 2005 but through its subsidiaries can trace its roots in the commodity markets back almost 100 years. Headquartered in London with 22 offices worldwide, the Group has over 1,100 employees across Europe, Asia and America.
For more information visit www.marex.com.
