MetalSignals — Tracking the world’s “shadow” metal supply with satellite imagery

Official inventories of aluminum, copper, and zinc are on the decline as global production moves in and out of the “shadows”. MetalSignals by RS Metrics captures these movements through its unique patented process.

RS Metrics
8 min readNov 27, 2018

“Metal is being relentlessly shuffled between the LME and off-market storage and between geographic locations. Reading the game is hard because most of it is taking place in the physical market shadows.” — Andy Home, Reuters Senior Metals Analyst and Columnist

Purchase a MetalSignals subscription here.

Nearly 850,000 tons of aluminum stored “off-warrant” in an Aluminicaste facility in San José Iturbide, Mexico
New smelters come online each year. This copper smelter in Ningde, China started in August 2018.

We often get the question @RSMetrics: “what are you actually measuring with MetalSignals?” The answer lies in the shadows, or at least, in the shadowy off-warrant and unbonded warehouses of the world’s base metal supply chain.

Historically, base metal prices maintained a strong relationship to the change in inventory of metal stocks stored at exchange-approved warehouses used by the London Metals Exchange (LME) or Chicago Mercantile Exchange (CME). These are commonly known as “on-warrant” storage facilities. However, as market participants and volumes have become increasingly global in recent years, growth in “off-warrant” facilities has increased as well, contributing to a distortion of the relationship between metal price and the official on-warrant inventory levels of any single exchange.

The chart below shows the variability in monthly copper inventory volumes by exchange:

China accounts for roughly half of the global demand for copper. Trading activities on SHFE are about that of the combined volumes traded on CME and the LME (Source).

Designed to capture change at “off-warrant” storage facilities, transfer points, and near-real time production of aluminum, copper, and zinc at the smelters themselves, MetalSignals patented satellite-derived data is an indispensable tool for monitoring the base metal supply chain. Satellites capture measurements of outdoor storage of metals and concentrates at approximately 400 global smelters, terminals, and storage facilities. MetalSignals provides global coverage across six continents and includes major countries such as China, Chile, Russia, USA, Australia, and more:

MetalSignals data history goes back to 2013 with increasing coverage at each location and overall through October 2018:

Valuable fundamental insights can be drawn from the data, whether on a global or local level, or by day, week, month, or year:

Aluminum smelter storage by country before and after the Trump Tariffs were introduced.

MetalSignals data includes the following key fields:

  • Metal stockpile area (m2)
  • Concentrates stockpile area (m2)
  • Copper anodes area (m2)
  • Copper cathodes area (m2)
  • Semi-trailers count
  • Cars count
  • Dump trucks / tippers count

And offers multiple sampling, processing, and update frequency options:

  • Aggregated weekly or monthly data is available for out-of-the-box analysis and uses Kalman Smoothing to adjust for missing values.
  • Raw unprocessed location-level data is available for quantitative analysis and integration.
  • Frequency of data collected for each location ranges from every few days to every few months, dependent largely on how remote it is and the historical interest in satellite tasking:
  • Daily dataset: updated on a daily basis with > 90% of all observations processed within 48 hours.
  • Weekly dataset: updated each Wednesday including all observations processed during the prior week.
  • Monthly report: summary of signals, year-over-year and month-over-month measurements and percent change by metal type and region. A sample Aluminum report for August 2018 can be downloaded here.
  • 1-month and 3 month price and inventory forecasts: released at the end of the month.

MetalSignals Web Application:

RS Metrics also offers a MetalSignals web app that derives patented predictive signals that provide weekly and monthly indications of exchange metals price and inventory direction 1, 2, and 3 months out.

The MetalSignals home page consists of a clickable and searchable map of all locations. Users can search locations by name, country or continent.

Current monthly inventories are aggregated “by type” (e.g. global aluminum smelters), and compared to a historical moving average (6 months by default). If the current monthly value is above or below selected standard deviation hurdles (+/- 0.5% by default) then a positive or negative signal is generated. Signal generation can also include an optional time lag.

  • Negative signal: > +0.5 stdevs
  • No signal: > -0.5 and < +0.5 stdevs
  • Positive signal: < -0.5 stdves
Monthly metal inventory measurements with adjustable standard deviation hurdles and historical moving average.
Positive, negative, and neutral signals overlaid on LME price (top) and inventory (bottom). Inventory signals are “reversed” due to the inverse relationship to price.

Forecast Results:

MetalSignals data can be leveraged to derive macro insights and predict changes in the global supply of aluminum, copper, zinc. RS Metrics research has also found the data to have a statistically significant correlation with directional changes in commodity futures, metals-related equities, indices, currencies/FX, and interest rates.

For example, overlaying the signals from the aluminum smelter chart onto a chart of EUR/USD price change shows outperformance of a long-only signal strategy of +12.9% compared to -13.1% when holding EUR/USD long from Jul 2014 through Aug 2018:

Top: Year-over-year growth in metal stock area, Bottom: Signals overlaid on price chart

In addition, MetalSignals white papers show how this data be used with various models (short vs. long term moving averages, K-Nearest Neighbor) to forecast Exchange metal price and inventory direction 1, 2, and 3 months out with 70%-80% accuracy.

Details on the production process for each metal and what the satellites measure at key steps:


MetalSignals measures the area in square meters of copper anodes and cathodes stored outside using our patented process. These are the finished copper anodes and cathodes described in the LME chart below:

Image courtesy of the London Metals Exchange

Copper satellite measurements may capture finished products like these blister copper anodes at a smelter in Baotou City, Inner Mongolia, China:

“Blister” Copper measurements at Baotou Huading Copper Development Co., Image © 2018 DigitalGlobe.

Satellites cannot measure copper stored indoors, but can capture smelter activity such as vehicles, trucks, and more as a proxy for production. Copper concentrates, which provide the raw materials for smelters, are difficult to measure with satellites but are often referenced as part of overall copper production and supply statistics.


Measuring the area in square meters of “primary aluminum” ingots, bars, sheets, rolls, etc. stored outside. These are the primary aluminum and aluminium alloys described in the LME chart below:

Image courtesy of the London Metals Exchange

Aluminum satellite measurements often look like these aluminum ingots and alloys at the Aluminicaste storage facility in San José Iturbide, Mexico:

Aluminum measurements at Aluminicaste, Mexico, Image © 2018 DigitalGlobe.

RS Metrics is also exploring ways to measure the production or consumption of bauxite, which is refined into alumina, the precursor to finished aluminum. Most of the increase in bauxite production today is coming from the African country of Guinea:

Bauxite bulk storage at Port Kamsar in Guinea


Measuring the area in square meters of zinc concentrates or high grade zinc ingots stored outside. Both are described in the LME chart below:

Image courtesy of the London Metals Exchange

Zinc satellite measurements often look like these zinc concentrate bags (outlined in red) at the Hobart smelter in Hobart, Tasmania:

Real-World Examples:

Tracking off-warrant metal production, delivery, and storage can unlock hidden insight into the commodity cycle. Copper in particular can help paint a clear and early picture of macro trends. For example, the chart below shows monthly satellite measurements of Chinese copper smelter inventory declining from Apr-2018 to Nov-2018:

Likely a reaction to the Trump Tariffs and China’s general economic slowdown, the MetalSignals data picked up the decline prior to official Chinese statistics. The chart below shows a general decline in the monthly output of refined copper products during 2018:

China’s National Bureau of Statistics (Source)

Aluminum has also experienced a volatile ride since the Trump Tariffs were enacted. The chart below shows year-over-year change in Chinese smelter inventories sharply increasing after the end of the winter 2017 production cuts, only to drop sharply after the Trump Tariffs. Also evident in the chart is an uptick in US and Russian aluminum smelter inventories as US industrial production slowly increases and Rusal sanctions continue to be delayed.

Zinc, just like copper and aluminum, has seen inventory levels decline across the board recently, with some analysts calling it a period of “peak tightness”.

LME headline zinc inventory is at its lowest outright level since 2008. (source)

Yet the price of zinc hasn’t bounced back sufficiently as rumors of slow global growth and “shadow” storage hit the market:

“It might even be argued that the warranting of 78,950 tonnes of zinc at New Orleans at the start of March effectively killed the zinc rally by undermining the bullish narrative of a supply shortfall.”

Sure enough, MetalSignals measured massive amounts of zinc stored at Castleton Commodities Braithwaite storage facility near New Orleans:

Large amounts of zinc, copper, and aluminum stored at Braithwaite, LA during Spring 2018.

MetalSignals Client Types:

MetalSignals is ideal for clients with exposure to metals commodity price, and metals-related equities, indices, options, currencies/FX and interest rates. Specific client types include:

  • Base Metals Traders (aluminum, copper, zinc)
  • Systematic Quant Hedge Funds: Medium and Low Frequency
  • Discretionary Hedge Funds: “Quantamental”, Fundamental Long/Short, Macro / FX
  • Corporate Metals Procurement / Supply Chain for Products and Packaging
  • Treasury Management at Corporations and Banks (Commodity, Equities, Currencies, and Rates trading desks)
  • Private Equity for Metals & Mining

To learn more about MetalSignals please visit our overview page or contact us directly at to learn about introductory pricing. You can also follow recent developments on Twitter and LinkedIn and purchase a monthly subscription here.



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