SMM

As of Monday, December 9, SMM copper inventories in major regions nationwide decreased by 10,600 mt compared to last Thursday, reaching 119,700 mt. However, total inventories were 55,000 mt higher compared to 64,700 mt in the same period last year, with Shanghai up 49,100 mt YoY, Guangdong down 6,900 mt YoY, and Jiangsu up 12,200 mt YoY.

Specifically, Shanghai's inventory decreased by 8,000 mt compared to last Thursday, reaching 91,100 mt. Jiangsu's inventory decreased by 700 mt compared to last Thursday, reaching 14,300 mt. Although there were arrivals of imported copper, the destocking rate was faster. This was due to moderate consumption by downstream enterprises in east China and the significant Shanghai-Guangdong price difference, which led to a shift of some imported copper from Shanghai to the South China market. Guangdong's inventory decreased by 1,700 mt to 7,700 mt, benefiting from moderate downstream consumption (as reflected by the rebound in Guangdong's daily outflows from warehouses) and the lack of a significant increase in domestic copper arrivals. However, close attention should be paid to the speed and volume of southbound arrivals, as a large influx could lead to a continuous increase in Guangdong's inventory in the future.

Looking ahead, we expect that the arrivals of domestic copper will remain relatively low in the short term for various reasons, and the arrivals of imported copper will not increase significantly. Therefore, this week's supply is expected to be similar to last week's. On the demand side, with the year-end approaching, some downstream sectors have a rush to meet deadlines, and overall demand is moderate. According to our survey, the weekly operating rate of copper cathode rod producers is expected to rise to 82.92% this week, up 0.98 percentage points WoW. Therefore, we believe that this week will see a slight growth in supply and demand, and weekly inventories are expected to continue to decline.