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China copper and nickel smelting activities rebound in August

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5 September 2023 – 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.

– Global copper smelting sees small decline, while China activity increases-

– RoW inactive copper smelters remain above 20% –

– China copper production “ramps up” ahead of seasonal peak in construction –

– Nickel Global Dispersion Index averages 47.3 in August, up from 40.0 in July –

– Only the Indonesian NPI Dispersion Index registers above 50 –

August 2023 Copper observations include:

The Global Dispersion Index fell to 46.7 in August from 46.8 in July, despite a rebound in activity in China where the country-level index rose to 48.1 after posting its weakest reading since October 2022 in July at 44.8. Although this was still below the two-year average of 50, by the end of the month, only four of the 37 primary smelters that SAVANT monitors were seen as inactive, the largest being Daye’s eponymous 300kt/a smelter in Hubei province and Zijin Mining’s 150kt/a plant at Hunchun in Jilin province.

Activity outside China was weaker, with the RoW combined activity index falling by 2.4 points to 45.8, despite the Asia & Oceania and European regions recording figures above the 2-year average of 50, at 50.9 and 51.3, respectively. Europe is particularly interesting at present – firstly, for the continuing operation of the 250kt/a Ronnskar smelter, despite the fire on June 13 that destroyed a critical part of the refinery, and also for the ramping up of activities at Zijin Mining’s 80kt/a Bor facility in Serbia and Aurubis’ 360kt/a plant in Bulgaria following maintenance closures. Then on the other side of the coin is KGHM’s 190kt/a smelter in Poland, which has been observed as inactive since August 25, which is likely to be related to the installation of upgraded equipment to clean the off gases released from pyrometallurgical processing of mercury and arsenic that began earlier in the year.

  • Global Dispersion Index fell to 46.7 in August from 46.8 in July
  • Smelting activity in China rebounded to an average of 48.1 for the month, finishing with a print of 54.6 on August 31st
  • Meanwhile the RoW inactive capacity index registered its fourth consecutive month above 20% at 21.8%
  • Smelting activity in Europe and Asia & Oceania are above the two year average of 50, with South America the next best at 41.0, followed by Africa at 38.6 and finally North America at only 30.9

Sign-up here for a trial of the SAVANT service or read the Nasdaq report card on Savant here: MGST Report Card.

August 2023 Nickel observations include:

The Global Dispersion Index rose by 7.3 points in August to 47.3, propelled by a rise in NPI activity in both China and Indonesia, so that the global NPI index rose by 9.9 points to 52.3. This is congruous with conditions in the onshore stainless steel market, where prices have been rising for most bar and coil products since late July. However, by the end of the month, activity in China had fallen back sharply, with half of the 28 NPI facilities monitored by SAVANT registered as inactive. This could be a precursor to production cuts expected in the broader steel industry ahead of the upcoming National Day Holidays at the beginning of October.

  • Global Dispersion Index rose to 47.3 in August from 40.0 in July, the first upward move since November 2022
  • The China NPI Dispersion Index rebounded 9.2 points, but at 49.1 still remains below the 2-year average of 50 and fell away sharply in the last week of August
  • Of all of the other regional indices, only the Indonesian NPI Dispersion Index is above 50 at 55.6
  • Activity at producers of class 1 nickel rose strongly to 45.4 from 33.2 in July, with ferronickel now the weakest of the metal grades at 37.4

Sign-up here for a trial of the SAVANT service or read the Nasdaq report card on Savant here: MGST Report Card.

Copper: Activity Dispersion Indices (7-day moving average) all regionsex. China, Aug 2022 – Present

Source: SAVANT by Earth-i

Nickel: map of Northern China operations, September 5th 2023 (blue = inactive, yellow = active, red = permanently closed)

Source: SAVANT by Earth-i

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 the smelting capacity for copper and nickel round 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.

Sign-up here for a trial of the SAVANT service or read the Nasdaq report card on Savant here: MGST Report Card.

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.

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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 1,300 employees across Europe, Asia and America.

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