Global copper smelting activity was subdued in August as plants mainly extended maintenance shutdowns, while flooding and power restrictions also had an impact, data from satellite surveillance showed on Tuesday.
Copper smelters continued maintenance shutdowns in anticipation of higher treatment and refining charges for concentrates later this year, Satellite service SAVANT and broker Marex said.
Treatment charges for copper concentrate in China AM-CN-CUCONC – which are currently at their highest in about 16 months at $60.50 a tonne – are paid to smelters by miners and are a major source of revenue.
Recent flooding in top copper consumer China caused some plants in the south central region to reduce smelting activity, while Chinese smelters more broadly were impacted by power restrictions, the data showed.
Smelters in South America bucked the trend, with smelting on mine sites rising above the global average to take advantage of higher prices for copper.
Benchmark copper prices CMCU3 on the London Metal Exchange are up about 20% so far this year, having hit a record in May.
Earth-i, which specialises in geospatial data, launched its SAVANT service late last year, tracking more than 100 smelters representing 80% to 90% of global production.
Under SAVANT’s dispersion index, 50 points indicate smelters are operating at the average level of the last 12 months. It also has a second index showing the percentage of active smelters.
Its global dispersion index fell to an average of 45.9 in August from 48.2 a month earlier.
China, the world’s top refined copper producer, declined to 44.6 in August from 46.2 in July. South America rose to 62 from 52.3 a month before while North America dropped to 42.7 from July’s 39.8.
In nickel, disruptions in production was caused by flooding, labour strikes, and civil unrest and SAVANT’s Global Inactivity Index has been rising since late May at a time of strong stainless-steel demand.
With nickel pig iron (NPI) activity in both China and Indonesia decreasing over the month, any change in momentum will be likely to need to come from more muted downstream demand, the statement said.
NPI is a lower-nickel-content substitute for refined nickel.
Source: Reuters (Reporting by Zandi Shabalala, additional reporting by Tom Daly. Editing by Jane Merriman)