GLOBAL COPPER SMELTING ACTIVITY REBOUNDS DURING AUGUST
24 September 2020 – The SAVANT platform, a unique geo-spatial analytics product focused on global copper smelting activity, showed a strong improvement in August, as the sector recovered from the July multi-year lows. August also saw North American smelting activity rebound particularly strongly.
August Observations:
- The global activity dispersion index averaged 44.2 during the month, a sequential improvement but still the lowest recording for this period since 2016 (41.5).
- The China Activity Dispersion Index saw a further decline to 39.3, the lowest since Mar 2018 (38.8). This was only the second month this year that the index has recorded a level below 50 (representing average activity levels basis historical observations).
- North America, which had recorded seven consecutive monthly readings below 35, rebounded aggressively to 58.7, the highest reading since Sep 2019 (62.4). This was due to off-line smelters restarting, although overall inactive capacity remains well above historical norms.
* – Index values go back to March 2016
Dr Guy Wolf, Marex Spectron’s Global Head of Analytics, commented: ““This year has been one of extremes and the latest data is no different. China’s August decline appears to be maintenance-related rather than demand-driven, with September data showing numbers are returning to more normal levels. The most striking data in August was the rebound in North American smelter activity, which has been extremely depressed since the first quarter, with a large amount of capacity to still come online – the expectation is for further increases in activity for the remainder of the year. We saw a similar pattern in China during the second quarter. China’s readings this year have largely been negatively correlated with the rest of the world, but from the second half of August they appear to be realigning.”
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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 SAVANT Copper platform monitors up to 90% of the smelting capacity for copper 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.
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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.
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About Marex Spectron Group Limited
Marex Spectron is a leading global commodities specialist providing clients with extensive access to financial and physical markets across Metals, Agriculture and Energy. The firm provides comprehensive breadth and depth of coverage across four core services: Market Making, Commercial Hedging (both on exchange execution and clearing, and OTC derivatives), Price Discovery and Data/Advisory. It has the dominant franchise in many major Metals, Energy and Agricultural products, executing around 31 million trades a year and clearing over 183 million contracts. The firm provides access to every major commodity market in the world, covering a broad range of clients that include the largest commodity producers, consumers and traders, banks, hedge funds and asset managers.
For more information visit www.marexspectron.com.
