ESG

Signs of recovery in copper smelting

The latest SAVANT Global Copper Smelting Index has shown less activity in March but signs of recovery in China towards month-end.

Staff reporter
 The SAVANT Global Copper Smelting Index points to apparent recovery in China

The SAVANT Global Copper Smelting Index points to apparent recovery in China

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The index, which uses satellite data to monitor up to 90% of global copper smelting capacity, put the March average at 86.7, down from February's 91.5.

Marex Spectron global head of analytics Dr Guy Wolf said the index generally saw seasonal weakness in March and April, but the market "may be surprised to see that was not significantly more than normal".

"What we have observed is that activity in China was initially much less impacted in the early stages of the COVID-19 outbreak than expected before weakening significantly in the latter stages of February," he said.

"In March, we have seen global activity levels supported by an apparent recovery in China."

The index showed smelting activity in China had started to recover in the last few days of March and this had continued into early April.

Meanwhile major producers Rio Tinto (LSE: RIO) and Vale (BZ: VALE3) have slashed 2020 copper production guidance in the past week as continuing restrictions and ongoing ramifications of COVID-19 create uncertainty.

However BHP (ASX: BHP) today kept its copper guidance for FY20 "broadly unchanged" but said Antamina's guidance was under review, following the temporary suspension of operations due to COVID-19.

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