GLOBAL COPPER SMELTING ACTIVITY UNCHANGED DURING OCTOBER AS CHINA WEAKNESS OFFSET BY EUROPE STRENGTH
19 November 2020 – The SAVANT platform, a unique geo-spatial analytics product launched in October 2019 by Earth-i and Marex Spectron, showed global copper smelting activity was largely unchanged in October after the strong increases seen in the prior two months. This however masks a significant regional divergence, with Global ex-China rebounding strongly, whilst on-shore China smelters, having rebounded much earlier in the year, showing reduced capacity utilisation.
Observations from October include:
- October 2020 global activity dispersion index averaged 50.3, a minor increase on the 50.2 recorded in the prior month.
- The China index however fell to 42.2 from the prior month’s 50.2, despite lower maintenances outages, suggesting capacity utilisation was much lower.
- North America, which had seen a huge rebound in the past two months, fell back to 45.4. This compares with the September reading of 56.5, the second highest in the past 12 months.
- In Europe – where the smelting recovery had been more muted than other parts of the world – October saw a huge jump from 51.7 to 66.5, which is the highest monthly reading in the database for Europe.
- Elsewhere, Asia ex-China was 52.1 (51.9 in September) whilst South America saw a jump to 55.1 from a level of 43.2 in September.
* – Index values go back to March 2016
Dr Guy Wolf, Marex Spectron’s Global Head of Analytics, commented: “Once again, regional variations in smelting activity have been significant, reflecting what appears to be the different stages of the pandemic lockdowns more than regional demand variation. Until now, Europe and South America were the only regions to show a significant recovery from the lows of the year, but no longer. Similarly, regions that had seen smelter activity rebound earlier saw some mean reversion during the month. The overall picture is one of activity levels gradually normalising, although recent months have seen Chinese activity almost perfectly negatively correlated with other regions.”
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.
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.
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About Marex Spectron Group Limited
Marex Spectron is a leading global commodities brokerage, with significant market share of many major Agricultural, Metal and Energy products. Headquartered in London, Marex Spectron’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 Spectron 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.
For more information visit www.marexspectron.com.