CHINESE COPPER SMELTING ACTIVITY DECLINES IN JUNE AS MAINTENANCE SHUTDOWNS INCREASE BUT CHINA NPI ACTIVITY SURGES
02 July 2021 – SAVANT, the unique geo-spatial analytics product launched in October 2019 by Earth-i and Marex, has expanded its global smelting activity coverage beyond copper to include nickel. The product now provides daily updates for global and regional indices, as well as China national and regional indices, accounting for ~90% of copper and ~96% of nickel global smelting capacity. Sign-up here for the Free SAVANT service.
June 2021 Copper observations include:
The strong increase in global copper smelting activity that was seen in May across all regions failed to continue as China entered the seasonal maintenance window. Despite this, global activity levels during the month remained well above the lows seen earlier this year, with small month-on-month increases in North America and Europe, and small decreases in South America and Asia ex China.
- The Copper global activity dispersion index averaged 48.0. for the month, which is a small decline on the 49.4 of last month.
- The China copper index fell to 47.0 from 48.9, as idle capacity rose to the highest level since last June, due to maintenance periods.
- Asia ex-China exhibited a similar profile to China, with activity levels falling to 48.2 from 51.5, again due to higher idle capacity.
- North America has been the slowest region to recover and only registered a relatively weak 38.9 in May, albeit an improvement on prior periods, but this was sustained in June with an average 46.0.
- Europe also continued on the road to normality with activity readings of 49.1 in June, an improvement on May’s 45.7.
- South America had been the standout region in May with a reading of 59.2 but has mean-reverted somewhat in June to a level of 53.9.
June 2021 Nickel observations include:
- June is traditionally a seasonally strong month, yet the Nickel global activity dispersion index was 49.8, which is the lowest reading for the month over the past five years.
- The China Nickel Pig Iron activity index jumped to 62.3 from 47.7, which means that two of the past three months have seen the highest readings in the past five years (the April reading was 64.2). This however was not replicated in Nickel ex-NPI, with no material change to the activity levels (35.8).
- Indonesia did not see a similar effect in either NPI activity (37.7) or ex-NPI activity (33.0).
* – Index values go back to March 2016
Dr Guy Wolf, Marex’s Global Head of Analytics, commented: “The insights of the SAVANT product are now further enhanced with the addition of global Nickel coverage, with NPI activity split out within China and Indonesia. Clients are keenly watching for signs of a production ramp-up in Indonesia but this does not yet appear to be forthcoming. In copper, the narrative remains one of a slow march towards normality with material divergences at a regional level. The Chinese maintenance period appears to be taking place as scheduled this year but the very strong levels of NPI activity in China are striking.”
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 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.
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Marex is a leading global commodities brokerage, with significant market share of many major Agricultural, Metal and Energy products. Headquartered in London, Marex’s extensive international network covers Europe, Asia and North America markets. State-of-the-art electronic and voice broking services facilitates all types of trading strategies. This is backed by decades of experience, with Marex placing great emphasis on intellectual knowledge and insight, alongside access to extensive data sets and the latest analytical tools. Its clients are commodity producers and consumers, banks, hedge funds, asset managers, brokers, commodity trading advisors and professional traders.
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