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Unusual split as copper smelter activity increases slightly

Global copper smelting activity has increased again, month-on-month, according to the June data from SAVANT, suggesting demand remained robust despite record shutdowns in China.
Unusual split as copper smelter activity increases slightly Unusual split as copper smelter activity increases slightly Unusual split as copper smelter activity increases slightly Unusual split as copper smelter activity increases slightly Unusual split as copper smelter activity increases slightly

Staff reporter

Its new dispersion index put global activity at 50.7 for June, up from 50.6 in May.

China's figures had dropped slightly from 54.6 to 53.9.

Marex Spectron's global head of analytics Dr Guy Wolf said there had been "a record amount of inactive capacity" in China during the month but the shutdowns seemed offset by significant increases in activity at some of the country's larger smelters.

"This bifurcation of the market is very unusual with some sites operating at full capacity whilst others cease production due to margin pressure," he said.

The copper price has risen above US$6,400 per tonne on the London Metal Exchange on a mix of anticipated demand through stimulus measures and supply concerns stemming from COVID-19 and possible strike action in Chile.

Wolf said the pandemic had also led to "unprecedented regional variation" in the readings.

"Whilst Asia looks to be well into a robust recovery phase, Europe and North America have only recently seen the lows in activity levels," he said.

"But the direction firmly appears to have turned globally."

North America had recorded the lowest dispersion activity reading in the history of the product of 34.2, according to the data from SAVANT, which was developed last year by Earth-i and Marex Spectron in partnership with the European Space Agency. 

The platform had previously reported an active capacity index from its monitoring of up to 90% of global smelting capacity.

Further enhancements meant it was now also producing the activity dispersion index, structured like a PMI, where readings above 50 indicated greater activity levels than average, Marex Spectron said.