Global copper smelting falls slightly in November Nickel activities hit record highs in North America
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November 2021 Copper observations include:
Global smelting activity fell slightly in November as rises in China and North America were more than offset by falls in South America and Europe & Africa. The spot market for concentrates has reportedly been quiet in recent weeks with smelters in China seemingly well stocked and despite the widespread resumption of operations following a busy third quarter maintenance program, treatment and refining charges have come off only marginally from their recent highs in September / October. By the end of the month just the Chuxiong smelter was showing as inactive for a period of longer than five days as it starts a 40 day shut down. In South America the Dispersion Index fell due to lower readings at Southern Copper’s Ilo smelter in Peru and Codelco’s Salvador smelter in Chile’s Atacama region, while activity continued to recover in North America following the resumption of operations at Sudbury.
- Global Dispersion Index fell back to 51.7, down from October’s 52.2
- This was despite the China Dispersion Index rising for the third month in a row to 57.4 – it’s highest reading this year
- North American smelting activity also increased over the month with the Inactive Capacity Index falling to a 10 month low of 28.0, while the region’s Dispersion Index rose above 50 for the first time since February to 51.9
- The South American Dispersion Index fell to a low for 2021 of 37.5
November 2021 Nickel observations include:
With the easing of the power crunch in China, NPI activity recovered in line with the broader rise witnessed recently in industrial production. At the same time the restart of the Sudbury smelter lifted the North American Dispersion Index to a record high of 87.6 on November 8th, while the European Dispersion Index rose to a two year high of 75.1 on November 25th, despite the temporary closure of NewCo Ferronikeli’s smelter in Kosovo as a result of prohibitively high power prices.
- Global Dispersion Index rose back above 50 to 51.4, from 46.0 in October
- The NPI Dispersion Index in China rose for the first time in four months to 42.0 from 33.0 in October
- Both the Americas and Europe & Africa recorded large gains with their Dispersion Indices rising to monthly averages of 73.4 and 64.0 respectively
* – Index values go back to March 2016
Dr Guy Wolf, Marex’s Global Head of Analytics, commented: “Rising levels of smelting activity in China but steady treatment and refining charges corroborate our earlier observations around the market behaviour of ‘custom’ smelters (those reliant on third party feed) leading into negotiations for the annual benchmark. That these smelters are now operating at a high level without inducing a commensurate fall in reference prices is testament to how skillfully they have played the market since the middle of the year, admittedly helped by the delay to the commissioning of Daye’s new double flash smelter.”
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.
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