CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Global copper smelting activity ticked higher in May as a rebound in China offset declines in Europe and elsewhere, data from satellite surveillance of metal processing plants showed on Wednesday.
Increased raw material shipments to China boosted activity there despite covid-19 restrictions, though European operations were hit by closures, according to a joint statement from commodities broker Marex and SAVANT, the satellite analytics service Marex launched with Earth-i in 2019.
“It was little surprise that activity in Europe fell to a new 12-month low,” the statement said, pointing to extensive shutdowns instigated at the two largest smelters in the region, Atlantic Copper’s Huelva and Aurubis’s Hamburg plant.
Earth-i, which specializes in geospatial data, tracks 94 smelters representing 80-90% of global production. It sells data to fund managers, traders, and miners, and also publishes a free monthly index of global copper smelter activity.
[Click here for an interactive chart of copper prices]
Its global copper dispersion index, a measure of smelter activity, rose to 49.4 in May from 48.7 in April.
Under the dispersion index, 50 points indicate that smelters are operating at the average level of the past 12 months. It also has a second index showing the percentage of active smelters.
Its China dispersion index for copper gained 5 points to 55.5, representing the largest rise since November 2021.
“When the copper arbitrage window opened in the first half of the month following falls in the international price, it was notable how quickly physical markets returned to life, despite the lockdown in Shanghai,” said Marex Global’s head of analytics, Guy Wolf.
In nickel, smelting activity climbed above the two-year average for the first time since December 2021.
Earlier in the year as many as 13 plants in northern China were offline, but the number has since fallen to only six, the statement said.
The global dispersion index for nickel climbed to 53.0 in May, from 49.1 in April, while the Chinese nickel pig iron (NPI) index rebounded to 54.1 in May after dropping to 40.8 last month.
NPI is a lower nickel content substitute for refined nickel.
Production of high-quality refined nickel, or Class 1 nickel registered its strongest month of activity since October 2020.
(By Eric Onstad; Editing by David Goodman)
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