Satellites spot China slowing copper smelters

Global copper smelters were about a third more idle this year through February than they normally are as leading producer China slowed output, according to a London-based company that uses satellites to monitor emissions.

Capacity at smelters for the wiring metal were inactive 11.5% of the time compared with 8.6% in the year-ago period, Earth-i said this week. It found China’s smelters were down 8.3% this year versus 4.8% in last year’s first two months.

“Production in China is normally elevated during this period as regular maintenance closures tend to take place later in the year,” Earth-i said in a report. “Copper market watchers are tracking Chinese output carefully at the moment, not only because it is the world’s biggest producer, but also because it is the main destination for mined concentrate.”

It wouldn’t take much for smelter activity to resume more usual levels, but the market is considering how China’s copper smelter purchase team may cut production when it meets this week, Earth-i said.

Copper treatment charges per tonne, a key income of custom smelters often located in China, fell to US$12.70 this month from US$48.20 in January and more than US$70 a year ago, according to Fastmarkets. It’s the lowest since the company began tracking the price in 2015.

Inactive smelters

China’s Baotou and Kunming smelters are inactive and the Wuxin plant has been idle since last summer. However, Northern Copper’s revamped Houma smelter has been operating since October, Earth-i said.

“Outside China, there have been no real surprises,” Earth-i founder and director Richard Blain said in the release. “We picked up minor outages in mid-February at Australia’s Olympic Dam and Chile’s Chuquicamata and continue to monitor Adani’s new Kutch smelter in India, which is expected to start activity shortly.”

The Panamanian government’s closure of First Quantum Minerals’ (TSX: FM) Cobre Panama mine will likely be the largest contributor to lower growth in copper mine production this year, Earth-i said. Reduced supplies of concentrate may cut smelter activity, with a knock-on effect on cathode output, the company said.

Earth-i uses artificial intelligence to process Earth observation data such as images, video, infra-red light and radar from sources including satellites, drones and sensors on the ground and above it. It tracks as much as 90% of copper smelting, as well as nickel and steel smelting. They’re monitored through software called Savant with eight years of data.